David Brooks on Different Economic Points of View

David Brooks of the New York Times is one of my very  favorite thinkers – he’s a calm and intellectual conservative who manages to maintain a great deal of respect for the reality of the sweeping political changes before us, but Brooks is wisely very cautious about the many pitfalls that come with the overwhelming power Americans have granted to the President Obama and the Democratic Party.

In my view Brooks, unlike “conservative” blowhards and political/media buffoons like Rush Limbaugh, Sarah Palin, and Sean Hannity,  articulates the kind of vision the founders of our American experiment would have appreciated very much.     They understood how important it was to debate, discuss, consider and reconsider and then use democracy within a constitutional framework as the key tool to resolve disputes.

On Charlie Rose Brooks made a several of observations I thought were really, really interesting.    The first is that Obama  – so sharp and confident as President and chief  manager – is at risk for overextending himself based on that level of self-confidence.   Brooks seemed to suggest (and I’d certainly agree) that this overconfidence is reflected in the governmental and budget optimism that is used to support what I’d call our massively irresponsible spending plans for the post-recession economy.    Almost every economist and politician now agrees that a large deficit is appropriate for a few years in an effort to stimulate the global economy, but there are huge differences of opinion about what to do after that stimulus … stimulates.

To me the answer is probably that we should return as soon as possible to the free marketeering mechanisms that got us to the incredible levels of prosperity we now enjoy, and should seek to reduce government … dramatically.    However this “small government” view has become so unpopular now that I’m going to avoid the stress and just sit back and watch as the huge government view now so prevalent is tested on the grandest scale in all of human history.     I still think we are pushing debts forward at massively unsustainable levels, but luckily we should have a good sense of how unsustainable within a few years as the projected benefits of massive spending fail to materialize.

Another point Brooks made was that Obama’s vision is that of a technocratic and effective government, bringing resources and people to bear on the host of regulatory, security, military, and economic problems Obama inherited from the past.    Brooks agrees that unbridled Capitalism needs to be kept in check but worries about the government as the mechanism for that balance.       Brooks prefers the ideas of UK Moderate Conservative party leader David Cameron who he suggested is trying to embed the necessary checks on capitalism’s potential for excess in non-governmental institutions such as competing sectors of the market, family, and community.

This “small governments, empowered communities” idea  is very provocative and I’d guess very much in line with what the founders would have liked to see, though I think it will take some time to catch on as we’ve spawned a generation of voters who will simply assume that massive government is the status quo.

Capitalism did what  it does so well and said  “damn the torpedos full speed ahead”.     From 1945 until 2008 the global economy dodged most of those torpedos and many – especially in the USA and Europe but also much of the developing world – enjoyed levels of prosperity unparalleled in all of human history.      In 2008 the global economy suffered direct hits from a *lot* of the torpedos we’d been dodging so well.      Governments failed to see them coming and I doubt they’ll succeed in restoring prosperity without torpedos (I’d argue that’s not even possible – the risks *created* much of all those rewards), but we’ll know soon enough.

In the meantime when you tuck your children into bed be sure to tell them “thank you”.   “Thank you for taking on our families share of the USA debt of $473,000 … while you slept” . Source for 473,000 is USA Today.

David Brooks on Charlie Rose:

Acumen Fund’s Novogratz on Charlie Rose. Fighting Poverty with Profits.

Charlie Rose was rocking today with two superb interviews that enhance and challenge our perceptions of how to think about the world’s most pressing problems of poverty and health in the developing world.  [yes, I realize the global economy is part of this massive problem equation and agree that fixing it is of primary importance to developing world as well as to those of us who live higher on the hog].

Jacqueline Novogratz, a former Wall Street Banker turned Venture Capital Do-Gooder, on her book “The Blue Sweater” and her personal and business adventures using microfinance and entrepreneurial innovations.   Brilliant:   http://www.charlierose.com/view/content/10176

Connecting poor and wealthy to solve pressing problems in developing world: Acumen invests in innovative projects around the world, using the power of entrepreneurial capitalism to solve pressing problems of human need.

These approaches to development and poverty reduction are *so powerful* and *so effective* that it’s painful to watch how many people get bogged down fretting about issues like privitization of water and corporations as evil. We must focus on what *works*, regardless of our ideology.  The best representatives of that approach are folks like Novogratz, Gates, Yunis, and many others who bring their business brilliancies to the challenges of international development.

Rose’s next guest was ethics professor Peter Singer on the ideas from his book “The Life You Can Save: Acting Now to End World Poverty”.   Singer notes the major success of the Gates Foundation and also the fact that  while most Americans tend to say they think “too much” tax money goes to international Aid yet fail to understand how small our contributions are to international development projects, and actually suggest we should send “about 5%” when the real amount is about 1%.     Also makes the case that international development is actually in our own selfish best interest, but for many is not in our *perceived* self interest.   http://www.charlierose.com/view/interview/10174

Marissa Mayer on Charlie Rose

Marissa Mayer on Charlie Rose. Two of my favorite people at the same time!

Mayer is one of a handful of people who drive many key online innovations as a result of her role at Google. Mayer’s background at Stanford is in AI, and it is very clear that she will remain a key player for many years in the technological changes now sweeping over the legacy industrial landscape.

Mike Arrington, Chris Anderson on Charlie Rose

TechCrunch’s Mike Arrington is on my favorite show tonight talking about the future of technology along with Chris Anderson of Wired.   (not to be confused with TED conference coordinator Chris Anderson).

Here are the videos

Ha – just got a Tweet from Mike that he hasn’t even seen himself yet since it’s not on in CA yet.    

Chris Anderson:
On sharing his next book before it is even out:   “Open Source” the idea, leading to a flood of more ideas, which in turn enrich everybody.   “Google doesn’t show up on your credit card bill”. 

Anderson’s provocative points are about how “free” is becoming a key concept in the digital economy, and may trump

Where does the some $360,000,000 that Craigslist saves the economy go?    Back to us, says Chris.   Hey thanks for the fish Craig Newmark!

Commodity information “needs to be free” vs unique information which may need to be expensive.

Radiohead as using digital economics for what it’s good at, and stimulate demand for the scarce thing – seeing the band in person, endorsements, and T shirts.

You cannot erase yourself from the web.    Shifting from privacy to self-promotion. 

Anderson:  Yes, MS will get Yahoo.    

Google as algorithms, Yahoo as a people business.   Google and the “machines first” culture are winning.    Microsoft, a pre-web culture, believes in software.   Their success kept them from being hungry, but now they are.  

Tech Bubble of 2000 was different.   Softer landing this time?

Facebook:  We’ll see narrowing of social networks (a GREAT point!).    NING model may prevail.  e.g. Chris’ own  www.DIYdrones.com    What is the right level of granularity? 

Chris: “Everything I believe is written on the back of an iPhone”: 
Designed in California, Made in China

Mike Arrington
Big issues:
* Net neutrality.
* China.   Sites are filtered and slowed rather than outright deleted from the network.   Companies are not happy with the policies, but reluctant to leave 187,000,000 internet users to the competition.
* Mobile space.   Fundamentals are changing such that USA can compete now with other countries in the mobile space.
* Identity theft.   US has done too little to fight this.  Even Sen John McCain had his ID stolen a few years back.
* Education, computers, and internet access for schools.    Government weak in this area, but also true that computers are often an educational distraction rather than enhancement. 
* Economic implications: TV ads suck (great point Mike!), so internet ad share will increase.  However also we’ll see TV and internet increasingly converge.

Mike’s online “about 100% of the time I’m awake”.     TechCrunch startup database is one key focus.    “We’re not worth 100MM”.   (for more on TC valuation issues see the excellent Yahoo Tech TV interview with Mike).

Microsoft won’t back down and be embarrassed by the Yahoo deal.    MS failed in search and fell off the online map.    All the major search engines are roughly equivalent (great point Mike!).  But Google has lots of publishers and lots of action at their own pages.

Amazon – transitioning to a services model.    Renting services in the cloud is eliminating yet another high cost business barrier by providing high level infrastructure at low cost. 

Startups and entrepreneurs:    Modern day pirates.   Gamblers.  They value risk cf risk averse folks.  YouTube’s 1.65 Billion sale as a surprise.

Can Facebook have their “Google Moment”, which for Google was figuring out pay per click advertising.     Facebook as more innovative than Myspace.   Can they invent something to generate a LOT of revenue?   If yes, another Google is born. 

Facebook’s friend based advertising model may be illegal because it’s implying an endorsement without the consent of the person. 

BBC as a great site to review the condition of the world.   Blogs as taking page views from the ‘big guys’.    Comments as important.    Blogs following Silicon Valley as a “trainwreck”, but blogs in general on the rise.

Is privacy an illusion?   Harder to get email address than SSN (hmmm – I don’t think so…).

Obama fan.   Tech potentially will make our lives much better.  3rd world education as exciting.    Worrying about Virtual Reality.   What happens when people want to spend all their time in VR?