Conservatives, Simply

Business, or government, or anything else, is not always bad, or always good. We need a richer analysis, taking into account a wider range of evidence and then trying to make sense of it.
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The world is a complex place. And the solutions to our problems -- very real problems -- will require complex answers. But many conservatives, including those with elite pedigrees, are not contributing useful solutions or analysis.

Let me explain what I am looking for, and what I am railing against. On my class exams, I reject simple answers. In over twenty years of university teaching, I have never given a multiple choice exam. Instead, I emphasize essays.

Even these can be minimized, by asking straightforward questions, like, "Name five important New Deal measures". I prefer open-ended queries that force students to use plenty of facts, but in service of their own ideas.

An example of this would be (actual exam question): "The period between 1900 and 1940 clearly shows a nation trying to come to grips with modern business. Put another way, many of the debates during this time were about what role business should play in American life. You too, can enter this fascinating and provocative argument! Your question, therefore is: What role did business play in American life during the period 1900-1940, how did it change and how do we assess its (i.e. businesses') impact on the country in this era? As always you have to have a thesis, and then exhaustive amounts of specific evidence covering the entire span of time, that would convince even a blind history professor of the wisdom and truth of your answer."

To get an "A" on exams like this your answer has to be smart, original, and backed by lots of evidence. If all a student does is say "yes" or "no", rather than providing their own thesis, then parrot back material from my lectures, they get graded down. I have given top marks both to papers I have profoundly disagreed with, and those I shared values with. The common factor was not my politics, but the ability of the student to think in fresh and innovative ways, and to support their thesis with data.

But some conservatives, no matter their status in life, wouldn't do well on my exams. These individuals have developed a simplistic mantra: Government is bad. Other than defense. Taxes are bad. Even if they pay for programs that help people. Business is good. Period.

Now some of this is true. Some of the time. Some taxes are detrimental, a lot of things business does are good. But taxes also pay for important, beneficial programs, and business at times breaks the law. My problem with the statements in the previous paragraph is that they are too simplistic, too absolute.

Case in point of someone guilty of this kind of flawed analysis may be John H. Cochrane, the AQR Capital Management Professor of Finance at the University of Chicago. This is someone with a much more prestigious position than I have, at a much more prestigious institution than I'm employed at.

Yet, in a New York Times article this Sunday, he is quoted as follows: "Growth doesn't come from big federal programs. The government didn't tell us" to set up the businesses on the Internet, but "it did tell us to buy houses and look where it got us."

Huh!? I hope Professor Cochrane was kidding about that last part, but I doubt it. It was business, not government who wrote all those smarmy contracts, packaged all those bogus loans that led to economic disaster and so many families in foreclosure. I don't recall companies using government lawyers to create all those new and disastrous packages, or selling them to hapless Americans who are now screwed.

Yes, at times government was the handmaiden in this process, facilitating matters. But that was because pro business Congresspeople and Senators passed bills weakening our financial laws and the oversight function, leading to the debacle. I doubt that many big government liberals voted for those measures. Throw in the efforts of the security industry's lobbyists, and you have a pretty clear causational chain.

But not to Cochrane. Business good. Government bad. End of analysis.

I once got into an interesting discussion with three finance professors from our business school. I was making the argument that at certain times, the greatest enemy of the free market was the business community. My point was that as big business reaches monopoly status, these firms often seek to limit the market, to close out potential competitors.

There were several different reactions. One individual simply looked at me like I had grown a second and third head, each as dysfunctional as the first one. How could business ever oppose the free market? Ever!?

The other two were much more thoughtful. They understood how both monopolies and oligopolies worked, and their detrimental effects on the market. But they then argued that the reason these firms could do these nasty things were that they were all sanctioned by a set of rules set up and enforced by -- drum roll here -- the government. Forget who was writing those laws and paying representatives to vote for them. Take away government, and nirvana and the free market would break out.

My point is not that business, or government, or anything else, is always bad, or good. Rather, it is in favor of richer analysis, taking into account a wider range of evidence and then trying to make sense of it. Some conservatives do this magnificently -- read: David Frum, or David Brooks in the New York Times. But many don't. And that kind of simplistic analysis doesn't move us forward,

Business good. Government bad.

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