Governing and Creative Destruction

January 12, 2012
Posted by Jay Livingston

Mitt Romney’s work at Bain was basically “creative destruction” – capitalism, rational and ruthless, making money by reforming or trashing businesses.* No Bain, no gain.  Romney emphasizes the creative part; his critics emphasize the destruction.  But is any of this relevant to the Presidency? 

Nearly a year ago, I expressed my skepticism (here) about business executives’ claims that their business skills would transfer to their government work.  I contrasted these claims with this more realistic self-assessment by a former pimp, who, in an interview with Sudhir Vankatesh,  was asked how his skills in that job might transfer to legitimate work.
You learn one thing [as a pimp]:  For a good blow job, a man will do just about anything. What can I do with that knowledge? I have no idea.
 Will Wilkinson at The Economist blog asks the skills-transfer question about Romney.
Even if Mr Romney's firm did in the end create more jobs than it killed by increasing the allocative efficiency of the market, what does this have to do with the tasks facing a president?
Wilkinson’s answer is Yes.  He quotes Pascal-Emmanuel Gobry**  to the effect that what a president does “is also very similar to what a private equity investor does in a buyout: analyze the business, decide on a strategy and hire, retain (and fire) managers.”

This seems a bit of a stretch.  Look at Obama’s difficulties in putting his policies (analyses and strategies) into effect.  Even in his hiring of managers (i.e., making appointments), Congress has thwarted him.

George W. Bush ran for president touting his own business credentials and, once in office, styled himself “the CEO president.” Unlike Obama today, Bush had the benefit of a co-operative Congress.  But the outcomes of the CEO presidency don’t seem to have been so wonderful.   The last president before Bush to have been successful in business was the wealthy peanut farmer Jimmy Carter.

*Those corporations, presumably, were people too, my friend.  But capitalist efficiency and profits required that friends be fired and businesses bankrupted, while Bain made out like bandits.

** Gobry is not exactly Romney’s biggest fan – “a fundamentally dishonest liar with obvious contempt for his fellow citizens.”

UPDATE Jan. 13.  Paul Krugman in today’s Times (here) draws a conclusion similar to mine though for a different reason:  business strategies that are good for company profits are far different from economic policies that will be good for a country.  :
Making good economic policy isn’t at all like maximizing corporate profits. And businessmen — even great businessmen — do not, in general, have any special insights into what it takes to achieve economic recovery. 
Krugman also skips over Bush and Carter as businessman-presidents.  
the last businessman to live in the White House was a guy named Herbert Hoover.


January 11, 2012
Posted by Jay Livingston

One of these signs is what I typically see in New York.  The other is what I saw in Cabo San Lucas, Mexico, where I’m spending a brief vacation (and not spending much time on the Internet).

The Mexican sign is the one on the right.

Cabo seems to exist only for the sake of American tourists.  When I travel, I usually like to to get a sense of how life is lived in another country.  That’s not what you get in Cabo.  All livelihoods here are related to the tourist trade – the restaurants and gift shops, the time share complexes, the pharmacias selling Viagra and Cipro.  It feels like being in some amalgam of a theme park and a colonial enclave.

See What Turns Up in an Ad for Glue

January 6, 2012
Posted by Jay Livingston 
This is a wonderful glue commercial, and it dates back 20 years.  But I doubt that you will ever see it on ar anything similar on American television.  It runs 1:20, and ads here are only thirty seconds.

(HT: S.A Livingston)

Myths That Move Us (and That Bus)

January 3, 2012
Posted by Jay Livingston

The Supportive Community is one of America’s most cherished myths.  By “myth,” I don’t mean that Community is some Gorgon or unicorn, a beast with no existence in reality.  Observers of the US going back to de Tocqueville have been impressed by our community spirit.
Americans of all ages, all conditions, and all dispositions constantly form associations . . . . The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society.  (DIA, II, 5)

The supportive community  is a myth in the sense that it represents an ideal – it is a story that we love to tell ourselves about ourselves.  When the story is true, so much the better.

Last week, David Brooks devoted his column  to such a story. A woman from a small town in Louisiana was diagnosed with cancer, and “the entire town rallied around her,” with fund-raising cookouts and concerts to pay for her medical care.  It’s all very touching and genuine, and Brooks uses it as an appeal to “communitarian conservatism.”

A much better known version of the myth is the television show “Extreme Makeover Home Edition.”  Each week brings us a needy but deserving family, usually in a suburb or small town, almost never a city.  Often, the family has been stricken by death, disease, or disability, but not despair.  Always their house, despite their best efforts, is a shambles.  The TV team comes in, sends the family on vacation (usually to Disney World – it’s an ABC show), and begins work on the centerpiece of its largesse, a new home. 

It’s the modern counterpart of the 1950s “Queen For a Day,” but with two important differences.  First, the sad story is always a family, not an individual. And second, the story always involves the community. Neighbors, co-workers, and others tell the camera what wonderful people the family are and how much they’ve given to the community. During the construction of the new house hundreds of people – a sort of town team wearing identical t-shirts and hard hats – turn up to help.

The show’s signature moment comes when the family is brought back from vacation.  With the hundreds of neighbors (we assume that they are neighbors and not ringers brought in by ABC) in their matching t-shirts and hard hats, the family stands opposite the new house, but their view is blocked by a large bus. “Move that bus! Move that bus!” everyone chants. 

The bus moves, the family runs to the house and goes through it room by room gasping “Oh my God.”

The stories David Brooks and ABC tell are heart-warming indeed. They show us at our best. They are our myth. But there are other stories.

On Sunday, “This American Life” reran a story about a woman who believed the myth.  She has lived in the same town, on the same block, for forty years, but she is approaching seventy, and she turned to the community seeking people who would help in caring for her autistic son, now 39, after she has died or become unable to look out for him. The short answer is that nobody volunteered. But take two minutes and listen to the entire excerpt, especially if you’re not familiar with  “Extreme Makeover Home Edition.”

The point is that myth is not a substitute for policy.  Not everybody who gets cancer is beloved by others in their town.*  Not every needy family, not even every virtuous and deserving needy family, is beloved by ABC  – and besides, the show has been cancelled.   These stories are one-offs, and we do ourselves a disservice to think that the myth represents workable solutions to our large-scale problems – problems like the millions of people without health care or affordable housing or jobs.**


* To quote my own tweet, only in America do we need fund-raisers for people who become ill. I recall one “Extreme Makeover Home Edition” family which  had been impoverished by medical costs and needed treatment they could no longer afford.  Both parents were employed as public school teachers.  In no other wealthy country would these people not be able to afford health care.

** Wrong thinking is a frequent theme on “This American Life.” (See this earlier SocioBlog post for another example.) A few years ago, NPR began a series called “This I Believe,” short essays by hundreds of different people stating their “core values.”  (The archive now has over 100,000 such essays.)   That prompted “This American Life” to run an episode called “This I Used to Believe.”
Here's host Ira Glass in an interview.
But the fact is, a lot of great stories hinge on people being wrong. In fact, we've talked as a staff about how the crypto-theme of every one of our shows is: “I thought it would work out this way, but then it worked out that way.”