Only a Harvard professor could be surprised that when government grows, private enterprise shrinks. Well, OK, that’s not fair. Lots of schools could have professors who would be shocked at that. And at least the business school professor finds it concerning.
15 thoughts on “Shocked”
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Is that Corner post still up? I got a blank template with no title or content.
Hmmmm… I don’t see it. It seems to have disappeared for some reason. It was by Veronique de Rugy.
I followed the link fine.
Do you think surprise would lead to enlightenment? Not likely.
Well, why would government spending cause private spending to shrink? I mean, it’s not as if there is a fixed amount of investment money per state, and what government spends isn’t available for private enterprise.
Chris, it’s a bit more complicated than that. Investment money is not fixed. It’s not exactly so much about government spending either.
It’s about two other things. An employee choosing government (no real incentive to increase productivity) is less productive than one choosing free enterprise (lot’s of incentive.)
Second, the productivity of government employees itself makes it harder for free enterprise to be productive (adding fees and regulations they could do without.)
why would government spending cause private spending to shrink?
You must not be following the other discussions about NASA funding and its effect on commercial endeavors. That’s just one example, but it is a pretty obvious one on this blog.
Leland – Well, not really, since NASA and commercial space is such a small proportion of the economy.
Well Gerrib, that was just one example. What is your example?
such a small proportion of the economy
Any example is a small proportion. Can you answer Leland’s question?
Leland – most “porkbarrel” spending is things like road and building construction. Why would government spending on construction reduce private spending on construction? Is there some fixed pool of dollars per state to spend on construction? Would private firms not build something for their use because government built something for it’s use? Would a private firm not buy equipment for its use because government bought equipment for their use?
I’ve got a novel idea, Chris. Why don’t you follow the links and actually read the report, so you’ll understand what you’re arguing about, and stop looking foolish?
Yeah, I did too, just now. Sometimes I think my ISP screws up the packets because often my browser will tell me a website can’t be found, and less often it finds the site but I get a 404 anyway. Guess that’s what happened to me yesterday.
No, it really did disappear temporarily, then came back. It was gone from The Corner for a while, but then was restored.
Is there some fixed pool of dollars per state to spend on construction?
There is a fixed pool of dollars. I thought you were a banker, so I didn’t think I would need to explain monetary policy to you. But then, you did support TARP and the bailout, so that is a big clue that you really believe their is no fixed pool.
IF the relationship they found is true, then government spending on commercial crew should result in a reduction in R&D spending on private human space launch and a retrenchment of firms spending on private human space launch – just the opposite New Space advocates are claiming will result from the policy. Which is what I have been saying regarding the new policy all along.
And it makes sense. Given limited resources, aerospace firms that are designing to meet the needs of assured funding of NASA’s commercial crew are less likely to spend those limited resources on the more speculative development of systems to serve Bigelow’s needs.