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Home Publications Blogs Beat the Press Thomas Friedman Hasn't Heard About the Recession

Thomas Friedman Hasn't Heard About the Recession

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Wednesday, 21 November 2012 05:30

We know that because he writes that in a budget deal it is really important that:

"everyone has to take their castor oil — the rich more, the middle class some — make them feel that it will enable us all to get stronger."

People who know about the recession would likely feel the middle class has taken plenty of castor oil. Many have been without work or involuntarily working part time over the last five years. They have also seen much of their wealth disappear with the collapse of the housing bubble.

Friedman also seems to have a bizarre belief that the country will be better off if more people give up good jobs and use their life savings to start businesses that will fail. Friedman has apparently misunderstood research on start-ups, which shows them to be large net job creators. He thinks that more start-ups will therefore mean more jobs.

This of course does not follow, since the marginal start-up that we can induce through more start-up friendly policy is virtually certain to do worse than the average start-up. If we divert resources from existing businesses to have 50 percent more start-ups, there is no reason to believe that this would increase job growth or improve the economy's performance, since the overwhelming majority of these start-ups will be out of business in less than a decade. 

Comments (5)Add Comment
...
written by Ron Alley, November 21, 2012 7:23
Another op-ed piece today deals with also crony capitalism, but in the airline industry. That piece questions whether the US market should be opened to foreign carriers.

http://www.nytimes.com/2012/11...f=opinion

The bottom line of both pieces is governmental influence on the market for goods and services.
Freudian slip?
written by frankenduf, November 21, 2012 8:15
friedman is also clueless to the irony that castor oil was used by mussolini to punish political dissidents- so there's an equally valid interpretation that the budget deal may cause explosive diarrhea- ... ok, im getting my metaphors confused
RIP Keynes (for good this time)
written by mossmoon, November 21, 2012 6:12
"They have also seen much of their wealth disappear with the collapse of the housing bubble."

This is a contradiction in terms. Real wealth doesn't come from credit bubbles. It comes from the earth. Capital comes from the earth, not the bloody Federal Reserve.
A Laxative for Thomas Friedman
written by Frankly Curious, November 22, 2012 12:41
Just for the record: castor oil is basically only useful as a laxative (Fitting, I know!) and has many side effects. Perhaps Friedman is taking too much castor oil, thus producing too many columns.

Not that he should stop! Dean Baker isn't the only one who gets articles out of Friedman:

http://franklycurious.com/index.php?itemid=2850
Confused by your conclusion here
written by David Joki, November 23, 2012 9:18
Is it true that start ups are still net job creators? Even with their high bankruptcy rate and therefore a good way to go? Also, even if the majority are out of business within ten years, don't they on average-I guess for 5 years or so-have a great positive jobs and economic impact? Many people would love a good job even if it ends in 5 years. I'm not a huge backer of start ups, especially when pay is only in stock. But your explanation of your position doesn't convince me of the strength of your anti-start up argument. You probably have a great argument backed up with great data-you always seem to and I'm a huge fan. But I just don't get it this time. Thanks for your blog.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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