Higgenbotham wrote:OLD1953 wrote:The FED has certainly grown in size and status, but it's a private bank, not part of the government. The US federal govt is shrinking in terms of number of employees (opposed to retirees or pensioners, which are different books and aren't bureaucrats - and yes I've seen attempts to count them as the same thing), the military is being reduced, etc. The FED may be getting bigger, but the bureaucracy is not.
OLD, if I understand it right, you work in the military. When John talks about the "crusty old bureaucracy" he is referring to the large private corporations that were founded or grew mostly out of the bottom of the last cycle. For example, GE, founded by Edison, I think, was once an innovative and self-sustaining company that has become a crusty old bureaucracy dependent on government handouts, favors, and contracts.
My theory on where people best innovate is that it hasn't changed. It does not occur inside large bureaucracies like GE despite a wider recognition of what innovation is and how it is done, because innovation is closely tied with the human spirit and the conditions of necessity and freedom (maybe not the exact right words) from which all of history's progress has come. Necessity is maximized under tough economic conditions, but so is freedom. People innovate best in small unstructured environments like garages, basements, or small companies. The way the maximum number of bright people get into innovative environments is for the crusty old bureaucracies to collapse and for costs to come down. In the case, as like today, when the societal structure of the US has become flawed so as to disallow innovation, people will probably go outside those boundaries to innovate. The US economy will not receive the benefit.aedens wrote: Small business is being systematically destroyed by tax and regulatory provisions. They will just leave here taking every last cent and setup elsewhere and it is ongoing before your very eyes.
Another way of stating that innovation is disallowed. Reward a parasitic monster like GE but pick on the little companies from which most progress comes.
A very astute and accurate analysis. Curious, have you read "The Innovator's Dilemma"? It's interesting to see that even companies go through their own versions of Generational Dynamics. I guess that's natural, but within some industries, the generational changes seem to occur more rapidly than they do in society.