Professor Mark J. Perry's Blog for Economics and Finance
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This must be why President Obama comes up with such innovative economic ideas as the "Jobs Summit".
The most remarkable thing about that graph to me is that it looks so dramatic, yet it actually starts at zero.Normally similar graphs exhibit that effect by having the lower bound start at 30% or so. Frightening.
Wonder how many AEI types have real world experience (does blogging count?).
Hey Buce, why don't you find an answer to that question about AEI?Of course you could be just snarky.30 seconds and here you go:http://www.aeispeakers.com/speakerbio.php?SpeakerID=1661
Looks like the public option without the fussy indoctrination of those entreprenurial private types.
No Real World Experience DESIRED.Fixed it for you.
In the case of Treasury, 2 of the 3 in the GW Bush admin came from the pure private sector and were a bust, and 1 came from Wall Street and got freaked out (see To Big to Fail, when a situation leads one to vomit as it did to Paulson, its fair to say a person is freaked out) In addition the second question is how much do lawyers know about the private sector, as Obama being a lawyer appointed a lot of lawyers. If the article means ran a business as the deciding factor then it should say so. Also I assume it means a majority of a career not some time spent. For example how would you classify Rumsfeld and Cheney? The both were CEO's but primarily politicians.
can someone please explain to me what the graph mean? thanks a lot guys ( I am from Finland)
Noel Barnard said... This must be why President Obama comes up with such innovative economic ideas as the "Jobs Summit".Wait, are you saying that's not going to be the magic bullet? I think admitting he had no clue would be the start of the turnaround.Although the list of invitees makes your point.
Mikka,Nice you could join us. Not sure if you clicked on the link which gives the following explanation:"A friend sends along the following chart from a J.P. Morgan research report. It examines the prior private sector experience of the cabinet officials since 1900 that one might expect a president to turn to in seeking advice about helping the economy. It includes secretaries of State, Commerce, Treasury, Agriculture, Interior, Labor, Transportation, Energy, and Housing & Urban Development, and excludes Postmaster General, Navy, War, Health, Education & Welfare, Veterans Affairs, and Homeland Security—432 cabinet members in all."The poster found the lack of private sector career experience among Obama's cabinet nominees to be quite surprising. Given the severity of the financial crisis, one would have imagined that the president would have chosen appointees with wide cross-functional experience that would come from a mix of private business as well as governmental experience. Hope this is clearer.
The Bush Administration was a train wreck--the biggest banks failed, the biggest insurers, GM failed, the economy and trade were in a free fall etc. Chronic red federal ink the whole show. Stuck in Iraqistan, losing in Afghanistan.What is the lesson?I don't know. Some might say people with private sector experience are biased in favor of their industry or sector. Will a farmer who has enjoyed subsidies as a birthright ever give them up?Maybe Obama will make things worse. Maybe now Detroit, like America's ag sector, will take subsidies for granted, and as necessary for doing business.Another knock-kneed, pink-o industry is born!
What constitutes private sector experience is it being a CEO? Hillary was on the board of Wal-Mart as well as a leading lawyer in Little Rock for example. Gary Locke practiced law for a while between government jobs, as did Ken Salazar. So it appears that being a CEO is real world experience. I suspect with todays environment a CEO would be a fool to go into government with the pay cut needed, the lack of financial privacy involved, and the intense scrutiny of backgrounds required.Given the orientation of the boom generation (the prime age group for such jobs today) of whats in it for me, taking a job in government for a top business man the answer is less than nothing.
"The Bush Administration was a train wreck--the biggest banks failed, the biggest insurers, GM failed, the economy and trade were in a free fall etc"...Hmmm, some sort of inverted time warp or what?"So it appears that being a CEO is real world experience"...Well considering that a CEO supposedly manages large groupings of people to produce a product or a service is I'm guessing is meter of measurement here...None the less Lyle I think your point about the work experiences of the other politicos you named is a good one...Who says a lawyer or a small business person isn't just as capable as a CEO until put to the test?
benny:"The Bush Administration was a train wreck--the biggest banks failed, the biggest insurers, GM failed, the economy and trade were in a free fall etc. Chronic red federal ink the whole show. Stuck in Iraqistan, losing in Afghanistan."i don't always agree with benny, but i think he's 100% correct here. the only apparent effect of having a treasury secretary (paulson) with private sector experience was that he handed over many billions of government $$$ to his former company.
If government was a business, it would've declared bankruptcy long ago.
Here's what a British entreprenuer said:"The Nordic Countries "success story" economies are a joke. I've been living here the last couple of years after being dragged here by my wife, and trying to run your business here is tough. It just isn't a business friendly place at all. Taxes in Denmark are 60-odd% as soon as you have the cheek to earn more than £35,000 a year! My guess is that 50-70% of the population are in government jobs, and they rely heavily on exports of oil, timber and fish in order to generate the foreign earnings to pay for it all."
Interesting - given the economic track record of the Bush and Reagan administrations prior private sector experience at worst correlates negatively or at best not at all with economic success?That said, I'd also stipulate that experience as a CEO (ie 3 year stint telling your directs to do the right thing quickly while maintaining total quality across the board) doesn't necessarily imply any solid economic reasoning skills. I've seen high-level management meddling make situations worse more often than better. Typically huge companies succeed despite their CEOs than because of them (Apple being a notable exception).
Lets look at the issue of someone from the private sector going into government. You will have your taxes investigated and published. Your background will be checked and since the current generation did not do facebook, youthful indiscretions will be revealed that you want to hide. You will have to put your assets in a blind trust and trust someone to manage them. The pay is lousy compared to CEO pay, you don't really have a lot of power, and better be an excellent salesman, for that is the essence of a government job. Further the connections made won't add that much to your post job career, as you probably have excellent connections. All in all why would any top businessman want a government job its not worth it.
It would be interesting to see a graph like this on our Congress.
Anon, Mark Twain may have said it best:"The trouble with the world is not that people know too little, but that they know so many things that aren't true."There are hundreds of major forces pushing and pulling a large economy. Some are positive and some are negative, and sometimes it takes years or decades to see the net result of too many poor policies.What worries me is Obama wants to focus on jobs again, after a health care bill is passed, because Obama has almost a perfect record on poor economic policies.
I'm a "Reagan Repub" and I agree - Bush was a train wreck and barely qualified as conservative.So far Obama is a train wreck.A trend perhaps?
If you liked Reagan, you loved Bush. It was the same game plan, i.e. cut taxes and expand American power. Of course, Bush didn't get much help from Fed Chairmen and couldn't put together a complete sentence.
Lyle,You raise an excellent point. Why would anyone take a pay cut in exchange for a "kick-me" sign on their back. Personally, I can't think of a reason in the world. Agree that incentives are not there, additionally, there is a tremendous damned if you do-damned if you don't anti-business mentality..along with one other consideration. A successful businessman considers where he can maximize performance...in the gridlock that is Washington, no sane individual would imagine that he could accomplish anything.
Peak,At least, GWB did not grant the constitutional rights of a U.S. citizen to the mastermind of 9-11. It is difficult to argue the value of rhetoric over substance...i'll grant that some prefer sizzle..personally, i like steak.
to QT:thanks a lot, I appreciate!!!It is clear to me now.
QT, I agree. Obama must be a magician, because the steak disappears after some sizzle. People "misunderestimate" the Bush Administration. The Paulson Treasury did well in the financial crisis, with the exception of Lehman, which of course was a disaster. I'm sorry to say, Obama would've likely spent more time on a solution and then pick the worst one, given his past performance. Obama's best economic policy so far seems to be raising the minimum wage.Also, I think, the Middle East is much more complicated than the Soviet Union. History is rewritten almost as fast as it's made. Americans didn't complain too much about bases and troops in Europe (NATO), Japan, Korea, etc. during the Cold War. Yet, they've been complaining a lot about combating a much greater mortal threat. I guess, some people now believe protection is too expensive.
Over 90% of the cabinet has no Private Sector Experience. Hmmm.Experience in the real world of the Private Sector is very valuable as the real world works much differently than textbooks. In a nut shell, in the real world you can not hold X or Y variable constant, all the variables flow and cascade at once, and those nasty exceptions to the rule crop up daily.Public Sector experience is the experience of working within a Monopolistic Environment. None of those pesky competitive pressures to cause you concerns. It’s the world of Milton Friedman’s fourth category of spending.The graph may have an alternate interpretation. The +90% of the Obama Administration with no Private Sector experience, those +90% with Public Sector and/or Academic Experience; are the outcomes we see their Ideology in conjunction with lack of experience? In other words, what about the Ideology aspect of the +90% group along with the aspect that the group lacks real world experience.Ideologists want to change the world, but due to lack of experience in the Real World, have no clue on what change requires or entails. Ideologists want to repaint the world in their image. They want to paint a picture on a new fresh blank canvass. They believe they can see their picture, but have no idea of how to paint. Without experience in artist bushes and paint, the canvass ends up with stick men chasing straw men and a final product no one can recognize.When you fill a room with Ideologist s (+90% of the Obama Administration), each participant wants to paint the world in their own image. Hence we have multiple unrecognizable paintings. Ideologists are not a very compromising bunch as they only see their particular world’s image. You end up with a scrap of canvass from each unrecognizable painting pasted together as a collage. A collage the audience rejects as art while simultaneously the many and varied artists argue the interpretation of the unrecognizable art.
Well first and foremost anyone who thought George W Bush was/is a conservative needs some basic schooling in what conservative thought really is..."i don't always agree with benny, but i think he's 100% correct here"...Hmmm, so recent history is a real stumbling block for you too, eh bobble?Maybe a look at labor statistics during the Bush administration is in order for you to remind yourself of one of the major differences...Regarding deficit spending I suggesst you peruse Brian M. Riedl writtings...You may also want to consider looking at the YouTube clip featuring Nancy Pelosi, Barney Frank, and Democrats...
Yeah. Private sector POLITICIANS who made significant contributions either directly or indirectly. Was the Bush Administration a model of free market capitalism, deregulation, conservative principles and tax a tax policy that provided for a healthy economic expansion?
Imagine the damage cabinet members with "real world experience" have inflicted on the country.
PIXIE DUSTNo conflict of Interest here.How do you spell INDEPENDENT?AEI is an independent non-profit organization supported primarily by grants and contributions from foundations, corporations, and individuals. It is headquartered in Washington.AEI scholars are considered to be some of the leading architects of the second Bush administration's public policy.
Jaundos=Just read the federal budget sometime. Your federal income taxes are largely eaten up by defense spending (read ossified lard and patronage) ag spending (read farm lobby), VA spending (necessary) and Homeland Security and Civilian Defense (a bunch of sissies overreacting to one attack).Of federal income taxes, those categories eat up more than one-half.The gigantic fat entitlement programs are financed by payroll taxes. You want to balance the budget, and cut your federal income taxes? Well, start cutting away--the R-Party will block the door though.The R-party has done a snow job on the American right. Sadly, the right-wing actually believes that the R-party can balance the budget, or adheres to some sort of conservative principles. Baloney. Name the last US R-Party prezzy with a balanced budget. The Dems might be worse, although Clinton brought us federal surpluses and avoided foreign entanglements. I was hoping Obama would be Clinton No. 2, but maybe not. He is getting us in deeper into Iraqistan, a really, really stupid idea (and another reason to go back to a volunteer military, as suggested by our Constitution. No way Americans would volunteer to fight in Afghanie. We have to hire mercenaries. Geaorge Mason, founding father, actually wanted an explicit provision in the Constitution against a permanent military. Now, we have a permanently mobilized, mercenary military, that cannot put a soldier on the ground for less than $1 million a year.Waste, fat, lard, corruption!
This is from this site: http://timpanogos.wordpress.com/2009/11/26/obamas-well-qualified-cabinet-conservatives-hoaxed-by-j-p-morgan-chart-that-verifies-prejudices/#comment-94265On my own blog, the daily mush — I rip apart the rest of what Tim says. It’s laughable, it’s mush, it’s divine mush, really, for no novelist could make it up.Now, this man, Tim Panogos, says this in response to “The “J. P. Morgan” chart from AEI” chart which is going around the internet. The left claims it purports to show business world experience for our current cabinet as compared to past cabinets. I have no idea as to the veracity of previous cabinet rankings. Nor do I really know much about the real resumes of any of the people listed below. I only have what Tim Panogos says. And he says the chart “is a hoax.”OK, so let’s look at what Tim says is the business world experience of the cabinet we have. Tim provides: “ Here’s the cabinet, listed in succession order, with their private sector experience; members were listed from the White House website; biographical data were taken from Wikipedia, supplemented by official departmental biographies:” I trust Tim! Heh, heh. And the percentages are his, too, Tim: "Vice President Joe Biden – Private experience: Yes. 4.5% of the cabinet. Biden’s father worked in the private sector his entire life — unsuccessfully for a critical period." Me: What on earth does his father’s resume have to do with Joe’s? When does anyone put on their resume what their father did? Tim: "Biden attended a private university’s law school (Syracuse) Every university is vastly funded by tax dollars in one way or the other, and few, if any, are wholly funded by students paying a tuition which covers 100% of the operating costs of the university. Me: To call a university “private” when it survives on public dollars is a bit of a stretch. Tim: "… and operated a successful-because-of-property-management law practice for three years before winning election to the U.S. Senate. What on earth is a “because-of-property-management law practice” — never heard the term, never saw it written before. But still, three years in a law practice is his sole “private” experience making and selling things – oh no, that’s right, he was a lawyer, reading books and arguing issues. Tim, parens his: (I regard a campaign as a private business, too — and Biden’s first campaign was masterful entrepreneurship.) Me: Tim thinks convincing people to put you in a position to tax their money is a job? Thus, by logic, a panhandler is gainfully employed. And what was he making? Words. And what was he selling? Himself. And what was his product? Himself. My, what an entrepreneur indeed, to sell oneself into the lap of luxury on other people’s money. Indeed, he had to rely on campaign donations – and donations are not prices which are set by costs and a reasonable profit. And what profit did Joe earn? That’s what private businesses do, they earn a profit. What was Joe’s profit? 40 years living off the public. It’s just a higher form of welfare, really.And such is the mush in the Obamatron circle. But I took apart every one of the cabinet folks that this guy Tim defends -- but really, not a one is qualified for much.
Mikka,My pleasure. It is nice to welcome a visitor from Finland. Look forward to hearing your ideas.This blog gets a little rough & tumble at times however, all of us share a passion for economics...is there anything else. Peak,I agree that the Paulson Treasury did extremely well with the exception of Lehman. Most experts did not predict the crisis and few could offer solutions because the nature of the crisis was very complex and intractable.
juandos:"Maybe a look at labor statistics during the Bush administration is in order for you to remind yourself of one of the major differences..."ok, i looked, here's what i found:". . President Bush, once taking account how long he’s been in office, shows the worst track record for job creation since the government began keeping records." wsj
Thanks for the chuckle pseudo Benny that your factless, delusional rant brought to me...What are, 'Private sector POLITICIANS'?"Was the Bush Administration a model of free market capitalism, deregulation, conservative principles and tax a tax policy that provided for a healthy economic expansion?"...Relatively speaking yes... How sad is that?Then again was Reagan?
Playing with your juandos can lead to brain damage“What are private sector politicians?”Try Henry Paulson. http://www.commondreams.org/headlines06/0820-06.htmTry a miriad of ambassador appointmentshttp://scholarsandrogues.wordpress.com/2007/06/25/bushs-patronage-appointments-to-ambassador-exceed-fathers-clintons/Stellar political appointments atEPA, FEMA (remember Katrina response?), FDA, NSA etc“staggering gross incompetence”http://184.108.40.206/News/2007/005281.aspNo bid contracts Iraq warhttp://www.halliburtonwatch.org/
"Try Henry Paulson"...Hmmm, registered R.I.N.O..."Try a miriad of ambassador appointments"...ROFLMAO! "During the presidency of George W. Bush, nearly four out of every 10 of his nominees for ambassador have been “non-career appointees” — or what many would consider “political” appointees. Neither his father nor President Clinton had such a high percentage"...Oh yeah! Two really great examples to go by...Maybe you've heard of Eric Holder?"Stellar political appointments at EPA, FEMA (remember Katrina response?), FDA, NSA etc"...Hmmm, so you're a socialist and need big government to hold YOUR hand but maybe you can explain the NSA part...Why is there still a Bureau of Indian Affairs in the first place?Note the following: The Jerome Commission met with the tribes in 1891 and found them opposed to the allotment. The Cheyenne and Arapaho were impoverished, having lost their cattle herds due to Bureau of Indian Affairs incompetentence...So what's new?Regarding Halliburton Watch, yeah I'm going to believe those ever so competent folks at Essential Information.... ROFLMAO...Thanks for playing Chuck...
A country is not a company
I was willing to accept the comments of the person below until he got to the Apple thing at the end. Has this person ever seen the movie "Pirates of Silcon Valley". You should cite a more noteworthy example. " At 11/26/2009 6:02 PM, Anonymous said... Interesting - given the economic track record of the Bush and Reagan administrations prior private sector experience at worst correlates negatively or at best not at all with economic success?That said, I'd also stipulate that experience as a CEO (ie 3 year stint telling your directs to do the right thing quickly while maintaining total quality across the board) doesn't necessarily imply any solid economic reasoning skills. I've seen high-level management meddling make situations worse more often than better. Typically huge companies succeed despite their CEOs than because of them (Apple being a notable exception)."
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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