August 12, 2013
1. Overpay to Play
2. Juvenile Paternalism
1. Overpay to Play
Virginia's gubernatorial politics are shaping up as a contest of corruption. I recently looked at the suspect cronyism of Democratic candidate Anthony McAuliffe's short career as an "entrepreneur" fronting for Chinese green car hucksters, which I described as an example of the new style of corruption that happens when big government is intertwined with private business.
But incumbent Governor Bob McDonnell has been making quite a display of good old-fashioned corruption, as the recipient of about $145,000 in gifts and interest-free loans to himself and his family from Jonnie Williams, CEO of Star Scientific, a Virginia-based manufacturer of electronic cigarettes and nutritional supplements. Williams is supposedly a "friend of the family," but that's how it works, isn't it? We're all friends here.
This has been described as bribery, which is what it sure looks like. But what I found odd is that it's not all that clear what Williams and Star Scientific actually got for all that money.
"While the governor has stated that Star Financial has received no government contracts, economic incentives, or grants, the company was able to use the governor's mansion to hold a luncheon at the unveiling of a new product in August 2011. Maureen McDonnell [the governor's sister] also helped arrange meetings between Williams, a top state official, and Virginia Secretary of Health Bill Hazel on separate occasions in order for Williams to pitch his new product Antabloc. While Hazel said he was confident Williams received no benefits from his part, Williams was still able to get these opportunities through the advantages of the governor and his wife." It's all pretty vague. I don't know about you, but I would think if I was going to bribe the governor, I would want something substantial in return.
McDonnell's corruption story has only indirectly tarnished the campaign of his would-be Republican successor, Ken Cuccinelli, who received a substantially smaller number of gifts from Mr. Williams, who seems to be everybody's "friend." It probably won't hurt Cuccinelli that badly—at least not compared to McAuliffe's growing scandal over his involvement with GreenTech.
The depth of that scandal was confirmed by new revelations reported in the New York Times.
"Frustrated by government red tape slowing his electric car company, Terry McAuliffe repeatedly sought a meeting at the Department of Homeland Security. "He and his lawyers sent a stream of e-mails to a senior official in charge of approving foreign investments that Mr. McAuliffe sought, and he went up the chain of command to Janet Napolitano, the secretary of homeland security, documents show. McAuliffe has apparently been billing his campaign as a test run for Hillary Clinton's 2016 campaign network. If so, this story—and particularly the role of Hillary Clinton's younger brother—are not auspicious.
"When a meeting finally took place in 2011, the official seemed to burn with resentment that Mr. McAuliffe went over his head, recalled Charles Wang, the president of the car company. In his first interview since Mr. McAuliffe began his campaign for Virginia governor, Mr. Wang spoke about his former partner's use of his political connections. He also discussed the role of a brother of Hillary Rodham Clinton, whom Mr. McAuliffe, 56, a Democratic fund-raiser close to the Clintons, brought to the company."
But what really struck me was the regret GreenTech's actual founder, Charles Wang, expressed about picking up all of these politically connected hangers-on.
"[T]here are days when Mr. Wang says he wishes he had never gone into business with a politically connected partner. 'I learned a lot of things,' he said. 'Politicians or people with political backgrounds are dangerous to business.'... "f GreenTech thought the Clinton connection would help with financing, Mr. Rodham, according to current and former GreenTech executives, did not play a key role. Company lawyers have been known to write his important e-mails. A former senior employee said Mr. Rodham was almost never in the office, a glass tower next to the Tysons Galleria mall here in Northern Virginia. When Mr. Wang took Mr. Rodham on a road trip to attract investors in China, the source of most GreenTech financing, the trip backfired. Those with a "libertarian populist" bent have talked about the benefit politically connected businessmen get from government policies that favor them. Maybe so. Or maybe a lot of it is flim-flam, and businessmen who think they are buying the magic of government influence are badly overpaying.
"It turned out, Mr. Wang said, that the Chinese resent the Clintons for a series of perceived diplomatic offenses, including the 1999 NATO bombing of the Chinese Embassy in Belgrade, Yugoslavia. The former president's brother-in-law was toxic, Mr. Wang said he was told. 'They said, "Don't bring Tony to China."'...
"He said the negative publicity had given investors cold feet."
2. Juvenile Paternalism
The Obama administration has embraced Cass Sunstein's theories about a supposed "libertarian paternalism"—"libertarian," you see, because it doesn't rely on heavy handed dictates but instead uses indirect incentives and small manipulations to "nudge" people into doing what their intellectual superiors in Washington, DC, think is good for them.
But as a general rule, if the government is doing something, it's not "libertarian."
The drawbacks of this whole approach are highlighted by the fact that the administration has just hired a special advisor to head up its team in charge of "nudge" paternalism—and by the fact that our new "paternalist" is 27 years old.
As Kyle Smith explains:
"Washington has just brought in a new behavior sheriff. She's rounding up an encouragement posse to get you to live your life better. She's 27. Her name is Maya Shankar. "According to her LinkedIn profile, Shankar went on to Yale (where she studied cognitive science), Oxford and Stanford. It would appear that she has never had an actual job unless you count 'post-doctoral fellow.' The key piece of information here is Shankar's degree in "cognitive science," which supposedly studies the "cognitive biases" that cause the benighted masses to make bad decisions. The idea is that government bureaucrats, who never make bad decisions, can engage in small, targeted, subtle manipulations that will correct our wayward cognitive biases for us.
"Shankar is not without accomplishments, though. She is a Rhodes scholar with a killer sense for publicity. She's been featured on NPR three times and in Glamour and USA Today roundups of the nation's most promising college students. In Glamour, in 2006, she said her dream job would be presidential science adviser. So it has come to pass: For her first job, she is now 'senior policy advisor at the White House Office of Science and Technology Policy.'
"That's right. Senior. This person was a senior at Yale as of 2007, but now she gets to tell you how to live your life. Sorry: encourage you to make choices that will make you happier."
But I have to wonder: has anyone ever done a study on the cognitive bias of 27-year-old Ivy League graduates to think they know what's best for the rest of us? Because there is an awful lot of anecdotal evidence to support this theory. From eugenics, to the "food pyramid," to the employer mandate in ObamaCare, DC's technocrats have a long history of overestimating their own expertise and their qualifications to manage everyone else's behavior.
This is, of course, the basic absurdity of the whole school of "cognitive bias" paternalism. It assumes that errors of thinking are something that only the unwashed masses do—but from which academic "social scientists," technocratic administrators, and their political masters are somehow immune. It reeks of the hubris of the newly minted college graduates who think that a whole lot of book-learning puts them a cut above everyone else and entitles them to make confident pronouncements about how the world should be organized—before a little life experience instills some humility about how much they still have left to learn.
Which is a pretty juvenile error for would-be paternalists to make.
There is a crisis in the teaching of entrepreneurship in the universities—which strikes me as kind of like putting monasteries in charge of sex education. Let's just put it this way: if the guy teaching you about how to be an entrepreneur has tenure, be skeptical.
Russian writer and liberal activist Masha Gessen is fleeing Russia's neo-fascist anti-gay pogrom. And no, that is not hyperbole.
Russia may be taking a turn toward fascism, but that's not incompatible with an anti-business strain left over from Communism, which is why Russian businessmen are protesting because "in Russia, the government can do anything. There is nobody who is protected against anything."
David Brooks exults that audiences are supposedly returning to the "authority" of the old media. Did he really just say "authority"?