Paul's Here

The New New Deal

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Who will protect us from our protectors?

House Financial Services Chairman Rep. Barney Frank (D., Mass.) predicted that 2009 will be the "best year" for public policy since the New Deal.

Speaking before the Consumer Federation of America Thursday, Mr. Frank said Congress would pass a regulatory overhaul comparable to the antitrust laws of the late 19th century and the creation of the Securities and Exchange Commission in 1934.

Democrats will tighten consumer protections for credit cards, put "very tough rules in" to govern subprime lending and give "appropriate liability" to the institutions that securitize mortgage loans, he said.

Mr. Frank said the economic crisis has run counter to the philosophy first espoused by President Ronald Reagan that "government is part of the problem." He said the goal would be to diminish excessive risk-taking within the context of investor and consumer protections.

"This has not become an anti-capitalist society," Mr. Frank said. "I think we can make the argument, as the New Deal did, that in fact we are being very pro-market."

He said that securitization -- used to repackage mortgage loans and sell them to investors as bonds -- has "good aspects" when done right but can also lead to abuses.

Mr. Frank predicted that legislation to tighten consumer protections in the credit card market and to crack down on mortgage lending abuses would become law. He also said bank regulators would adopt a code to prevent unfair and deceptive practices.

(my bold)

Frank Foresees Sweeping Regulatory Overhaul

I sure am glad we kicked those religious fanatical Republicans out of office.

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And if you thought the above was a conspiracy of power-lusting politicians, Bill Gates wants Obama to increase spending.

The world's richest technology entrepreneur -- and leading philanthropist -- came to Washington yesterday with a simple message for President-elect Barack Obama: Increase spending.

Against the backdrop of a recession, Microsoft founder Bill Gates said the federal government must increase deficit spending to stimulate the economy and help the country's most vulnerable residents. Gates said new investments are critical to building on recent improvements in U.S. public education and fighting disease abroad, which he said could be reversed if spending dries up.

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"In a crisis, there is always a risk that you take your eyes off the future and you sacrifice long-term investments for short-term gains," Gates said in a speech at George Washington University. "You have to seek both. . . . We should have a bigger goal than getting the economy growing again. I think we should expand the number of people who are contributing to the economy and benefiting from it."

Gates described the financial crisis as an opportunity for innovation, likening it to the economic woes of the 1970s, which gave rise to America's information technology boom, during which Microsoft was born. "Difficult times can launch great ideas," he said.

Apparently Gates is unable to integrate facts into a coherent principle:

Later, in a broad interview with The Washington Post, Gates also lamented the state of the District's struggling public schools, which have received hundreds of millions of dollars from his foundation, but had high praise for efforts by Chancellor Michelle A. Rhee.

Gates's foundation funds charter schools, scholarships and other programs for the city's poorest students.

"It's a very hard job, and whether it's the facilities or the personnel issues, somebody had to come in and really point out that the students are not getting what they deserve," he said of Rhee. "The irony [is] that it's almost the highest spending per pupil in the country, and it's almost the worst set of outcomes of students in the country -- and this is the nation's capital. You'd think that in terms of effective spending of dollars and outcomes, that D.C. would be a model city, and, in fact, it has been the exact opposite."

(my bold)

Bill Gates Urges Obama to Increase Spending

Never let it be said that Gates is an intellectual with the ability to integrate a wide range of facts. It is truly a shame to see such a man throw his money away like this on failures. How big would Microsoft have grown using those principles, Bill?

This is what he thinks it takes to solve society's problems:

"How do you find the smartest people, and how do you create teams around them where they've got the right set of skills? How do you take on things where you're going to have failures and learn from those failures, be willing to do things that are risky, some of which will end up being a complete dead end, and have a set of outcomes: lives saved."

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The foundation is akin to a start-up. "It's like a large company with a big vision and a determination to grow rapidly," said Duke University professor Joel L. Fleishman, who studies philanthropy. "But in this case, it's not growing to make money. It's growing to figure out how to give away money in an orderly and effective fashion."

How anyone cannot see the contradiction here is beyond me. Consumption = production to such a person.
Asked what his legacy may be in 15 years, Gates said he hopes it would be as a catalyst for "dramatic improvement in global health. . . . I expect that we would have played a role in a dramatic reduction in disease in many of the top areas: malaria, tuberculosis, AIDS, childhood diseases."
I'm sorry, Bill. That is not how it's going to turn out for you. If you want global health, you should be advocating establishing free societies with limited governmental powers that protect individual rights and property. You should advocate a government that allows people to trade for mutual benefit.

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Obviously Gates is now so thoroughly corrupt that he is beyond redemption. He knows nothing about economics, claiming that "deficit spending" is the key to prosperity and that "economic woes" in the 1970s caused the computer revolution and its "great ideas". His overt statism and collectivism speaks for itself.

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Obviously Gates is now so thoroughly corrupt that he is beyond redemption. He knows nothing about economics, claiming that "deficit spending" is the key to prosperity and that "economic woes" in the 1970s caused the computer revolution and its "great ideas". His overt statism and collectivism speaks for itself.

I guess we should not expect much from a man that comes from a town that has a statue of Lenin.

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Not to sound melodramatic or paranoid, but I half expect some sort of Ellsworth Toohey to be behind this. Just think, if Barney Frank calls massive bailouts being "Pro-Capitalist" then when they fail can he then move on to more "Anti-Capitalist" measures ?

How can Republicans justify themselves if they support the Auto Bailout? The failure of the auto bailout to rescue the industry will "prove" to the gullible that capitalism and Republicans are bad - paving the way to create bailouts aimed at putting money and jobs directly in the hands of 'working Joes'. If liberals are successful in tying the bailout failures to Republicans, they can move on to more powerful socialist measures like direct nationalization. The media is playing right into this.

Who will protect us from our protectors?
House Financial Services Chairman Rep. Barney Frank (D., Mass.) predicted that 2009 will be the "best year" for public policy since the New Deal.

Speaking before the Consumer Federation of America Thursday, Mr. Frank said Congress would pass a regulatory overhaul comparable to the antitrust laws of the late 19th century and the creation of the Securities and Exchange Commission in 1934.

Democrats will tighten consumer protections for credit cards, put "very tough rules in" to govern subprime lending and give "appropriate liability" to the institutions that securitize mortgage loans, he said.

Mr. Frank said the economic crisis has run counter to the philosophy first espoused by President Ronald Reagan that "government is part of the problem." He said the goal would be to diminish excessive risk-taking within the context of investor and consumer protections.

"This has not become an anti-capitalist society," Mr. Frank said. "I think we can make the argument, as the New Deal did, that in fact we are being very pro-market."

He said that securitization -- used to repackage mortgage loans and sell them to investors as bonds -- has "good aspects" when done right but can also lead to abuses.

Mr. Frank predicted that legislation to tighten consumer protections in the credit card market and to crack down on mortgage lending abuses would become law. He also said bank regulators would adopt a code to prevent unfair and deceptive practices.

(my bold)

Frank Foresees Sweeping Regulatory Overhaul

I sure am glad we kicked those religious fanatical Republicans out of office.

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Obviously Gates is now so thoroughly corrupt that he is beyond redemption.[...]

Are there indications he did not always believe it was incumbent upon him and any achiever to apologize for their existence in one way or another? I have not read any (auto)biographical material about him and am curious.

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Obviously Gates is now so thoroughly corrupt that he is beyond redemption.[...]

Are there indications he did not always believe it was incumbent upon him and any achiever to apologize for their existence in one way or another? I have not read any (auto)biographical material about him and am curious.

I have actually read (auto)biographical material on him along with many other great wealth creators and they all seem to fall into the same trap in their later years. The trap is altruism and guilt.

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I have actually read (auto)biographical material on him along with many other great wealth creators and they all seem to fall into the same trap in their later years. The trap is altruism and guilt.

Correction, almost all.

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Obviously Gates is now so thoroughly corrupt that he is beyond redemption.[...]

Are there indications he did not always believe it was incumbent upon him and any achiever to apologize for their existence in one way or another? I have not read any (auto)biographical material about him and am curious.

I haven't either, but observe in his public statements that he has become increasingly more strident to the point where his whole life is now obsessed by it. If he had been this way when he was building usoft there would have been no usoft. One suspects that he always held such beliefs in some vague form the same way most people do because that is what is grilled into them, and had he finished his degree at Harvard instead of dropping out to start usoft, he would have been worse sooner. I don't know how objective an account his autobiographical writings (which seem to date from the early 90's and later) could be on these matters.

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Obviously Gates is now so thoroughly corrupt that he is beyond redemption.[...]

Are there indications he did not always believe it was incumbent upon him and any achiever to apologize for their existence in one way or another? I have not read any (auto)biographical material about him and am curious.

I have actually read (auto)biographical material on him along with many other great wealth creators and they all seem to fall into the same trap in their later years. The trap is altruism and guilt.

It is a common view that wealth is a zero sum game, so for them to be rich, that others 'lost out' hence the huge focus on equalising the losses they believe they caused others by getting rich.

I have sometimes wondered if it reflects a lack of pride in their products, that they don't realise they earnt their money by trade, by making billions of lives that little bit better already.

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Some of the posts on this thread have been split into a separate topic: "Republicans, Religion, and the Constitution" (link).

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Obviously Gates is now so thoroughly corrupt that he is beyond redemption.[...]

Are there indications he did not always believe it was incumbent upon him and any achiever to apologize for their existence in one way or another? I have not read any (auto)biographical material about him and am curious.

Here is some of the points Gates stated back in 1998 when the Justice Dept. was pursuing its antitrust case.

In less than two decades, America's software industry-indeed, the entire PC industry-has become the most vibrant, innovative and competitive industry in the world. Without government regulators restricting or managing its creativity, it has grown to generate one-quarter of America's real economic growth and 8% of its national output. One element of this success is the availability of a software platform that runs on all PCs, with a common interface and numerous applications. Microsoft's Windows operating system is the most popular software platform today precisely because of its openness to developers.

Consumers, too, tell us they value our open software standard and the hugely beneficial effect it has had on the cost of computing, which has fallen by a factor of 10m since the microprocessor was invented in the early 1970s. They tell us they appreciate the fact that, thanks to the common Windows interface, they can choose from thousands of makes and models of PC, yet will always know how to use the one they opt for. And thanks to the common Windows programming environment, consumers know that virtually any PC from any manufacturer will run literally thousands of applications.

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The current popularity of Windows does not mean that its market position is unassailable. The potential financial reward for building the "next Windows" is so great that there will never be a shortage of new technologies seeking to challenge it. Powerful competitors such as IBM, Sun Microsystems and Oracle are spending hundreds of millions of dollars annually to develop new software aimed squarely at replacing Windows. That is one reason why we price Windows so low. If we increased prices, failed to innovate, or stopped incorporating the features consumers want (such as support for the Internet), we would rapidly lose market share.

It is often argued that Microsoft should be deemed a regulated "essential facility". This too is weak. Essential-facility law primarily applies to a physical asset or facility (such as a bridge) that a company (or companies) denies to competitors, and which cannot be duplicated by those rivals. By contrast, Windows is a piece of intellectual property whose "facilities" are totally open to partners and competitors alike. Windows' programming interfaces are published free of charge, so millions of independent software developers can make use of its built-in facilities (eg, the user interface) in the applications they design. Those same interfaces are also provided freely to manufacturers of computer peripherals, who take similar advantage of them. And we license Windows cheaply to any PC maker that wants to use it, a strategy which has allowed computer makers such as Compaq and Dell to focus on improving their products.

Windows became a de facto standard because from the outset we adopted a low-price, high-volume business model.

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Ironically, the government's lawsuit on behalf of Netscape is attacking one of the fundamental principles that has fuelled the rapid improvement in PCs-that every company should be free to innovate and continuously improve its products on behalf of consumers, adding new features and functionality. The regulators' case centres on the claim that we integrated our Internet Explorer browsing technology into Windows in an attempt, in your words, "illegally to counter Netscape's Navigator browser". The central flaw in this allegation is that there are absolutely no laws against innovating. In fact, the law says that every company-from the smallest start-up to the largest multinational-should always work to improve its products for consumers.

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This goes to the heart of Microsoft's disagreement with the Justice Department: we are defending the legal right of every company to decide which features go into its own products.

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Consumers tell us they want more innovation and real choice-not less innovation and choice restricted by regulators. It is free and fierce competition in the computer industry that has created innovation and choice-and consumers will continue to benefit only as long as this vibrant industry remains unfettered. It is consumers who have convinced us we are doing the right thing.

Compete, Don't Delete

So it is very clear that Gates understands market forces, what dictates what products producers produce, why they produce it, and the dedication it takes to produce it. Nowhere does he ask the government to spend more money to help innovation in the computer industry.

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So it is very clear that Gates understands market forces, what dictates what products producers produce, why they produce it, and the dedication it takes to produce it. Nowhere does he ask the government to spend more money to help innovation in the computer industry.

Gates understood the particulars of how his own business operated, and didn't want the government interfering with him, but it does not follow from his frozen abstraction that he understands economics, and of course he does not mention moral rights. In fact his argument above smacks of making an exception for himself under "special circumstances" when he argues why usoft should not be a "regulated utility", as if that is ok for other businesses. He also equivocates on the meaning of "open software". usoft does not have "open software" available to competitors; it publishes the programming interface to its own highly proprietary and well-guarded software so others can use it in programming connections without knowing or having to know what is inside the usoft code. He knows this very well, but apparently decided for reasons of strategic PR to cash in on the popular term "open software" through equivocation, ignoring his moral right to his own property. I see nothing in his arguments from 1998 that would preclude him from begging for a bailout if usoft had been in trouble financially. At the time it was in trouble politically because of the savages among his competitors who seek to use the government to control others.

About all Gates got right in the above 1998 quote was the history of how the computer industry developed rapidly and creatively without the traditional burdens of government regulation, which development and freedom he observed first hand. Historically, this amounts to the fact that a brand new technology developed and quickly evolved when bureaucrats didn't understand it and recognize what was happening and therefore didn't think to regulate it until much later when even they couldn't miss the fact of how important it has been. Such was their great "discovery". Had computers been regulated from the beginning, with permission required for every algorithm, interface and line of code, most of what we have now would not exist. Even today, Gates, has not endorsed detailed regulation of what has stared him in the face for decades, but instead advocates collectivism and statism across the board in intervention in the economy through bailouts and taxes for redistribution.

It remains to be seen if Gates is endorsing the Democrat's "Industrial Policy" in which government agencies decide on and fund what new technologies should be developed. There was a big push for this under Clinton-Gore, with a lot of support from high tech industrial leaders seeking socialism for business -- fascism -- especially in the semiconductor business. Democrats today are now reviving that after eight years in which under Bush they knew it was going nowhere. It does make a difference who is in the White House.

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I observed years ago that Gates (and by implication Microsoft) seemed to start declining away from a focus on his business to sundry altruistic endeavors after he got married. There were a few clues that he let Melinda Gates push him in an altruistic direction, which is now reinforced by this news article I just googled:

http://money.cnn.com/2008/01/04/news/newsm...rtune/index.htm The article is a little dated; Gates has basically retired from Microsoft.

Today, at 43, Melinda Gates is ready to reveal her full self - to go public, so to speak. "I had always thought that when my youngest child started full-day school I'd step up," she says, sitting down with Fortune for her first-ever profile. Although she admits she would prefer to stay out of public view forever, her older daughter got her thinking. "I really want her to have a voice, whatever she chooses to do," she says. "I need to role-model that for her." She is spending more time on foundation work, up to 30 hours a week. "As I thought about strong women of history, I realized that they stepped out in some way."

She is stepping up also because her husband is doing the same. Beginning in July, Bill, who is nine years older than Melinda, plans to spend more than 40 hours a week on philanthropy, leaving 15 or so for his duties as chairman of Microsoft. Friends of the couple say that he wouldn't be shifting gears if it weren't for Melinda. Moreover, they say, she has helped Bill become more open, patient, and compassionate. "Bulls**t!" he bellows. Nicer, perhaps? "No way!" he shouts, grinning because he knows it's true. One thing he admits readily: Thanks to Melinda, he is easing comfortably into his new role. About the philanthropic work he says, "I don't think it would be fun to do on my own, and I don't think I'd do as much of it."

This is not exactly a marriage of equals. Melinda is better educated than Bill, having graduated from Duke University with a BA (a double major in computer science and economics) and an MBA.

My interpretation, consistent with past surmises, is that her college-bred altruism became a source to wheedle Gates into "helping society" (not that that excuses it.)

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It remains to be seen if Gates is endorsing the Democrat's "Industrial Policy" in which government agencies decide on and fund what new technologies should be developed. There was a big push for this under Clinton-Gore, with a lot of support from high tech industrial leaders seeking socialism for business -- fascism -- especially in the semiconductor business. Democrats today are now reviving that after eight years in which under Bush they knew it was going nowhere. It does make a difference who is in the White House.

Oh god, then we could learn to enjoy the industry equivalents of years of pointless research into String or Big Bang Theory.

A similarly scary thing I heard on the news was the leaders of The Big 3 automakers were interested in an offer where the government bails them out, but then the government must be given a regulatory or advisory position to help "restructure" the companies.

I guess The Big 3 was looking for someone to help them with crippling internal inefficiency, wasteful spending, and corruption, and the US Congress is their logical choice... :)

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Gates' current philosophy seems consistent with that of his father, so I suspect it's not a new development. It simply was kept in check by his focus on the business previously.

Remember that Microsoft called for the government to block the Google / Yahoo deal. Most businessmen are not committed free marketers.

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