[EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to Educate Him About "Rent Seeking"
Sean Parnell
sean at impactpolicymanagement.com
Wed Aug 26 16:33:13 PDT 2015
Given that "perfectly competitive markets" are a theoretical academic
exercise, useful in their own way of course but with their limitations when
assessing the real world, yes, it probably is best the conversation is over,
before anybody is further traumatized by flashbacks to their college econ
classes.
Sean
From: Chambers, Hank [mailto:hchamber at richmond.edu]
Sent: Wednesday, August 26, 2015 7:24 PM
To: Sean Parnell; 'Rick Hasen'; 'Jonathan Adler'; law-election at uci.edu
Subject: RE: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
It is about deviations from perfectly competitive markets, as my e-mail
noted, not just about barriers to entry. Best to end the conversation now.
-Hank
Henry L. Chambers, Jr.
Professor of Law
University of Richmond School of Law
28 Westhampton Way
Richmond, Va. 23173
(804) 289-8199
hchamber at richmond.edu
_____
From: Sean Parnell [sean at impactpolicymanagement.com]
Sent: Wednesday, August 26, 2015 2:58 PM
To: Chambers, Hank; 'Rick Hasen'; 'Jonathan Adler'; law-election at uci.edu
Subject: RE: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
This seems odd, at least in reference to the current discussion:
Such power can be gained or maintained by lobbying to keep others out of
their market by raising barriers to entry..
I'm not sure how this applies to the Koch brothers, or anyone actually in
the power industry for that matter regarding subsidies for renewable energy.
What keeps (or would keep) renewable energy out of their market, what serves
as a barrier to entry, is/would be the market itself, in which consumers
broadly prefer their electricity delivered at 8 cents per kw/hr as opposed
to 20 cents per kw/hr (not sure what the exact numbers are these days, but
you get the point I assume). It seems that the definition being offered is
that failure to subsidize an economically uncompetitive rival to an
economically competitive industry is, in fact, a granting of a
rent/oligopoly status to the economically competitive industry. If that's
the argument being offered, it's probably time for me to exit this
conversation as we have apparently entered the realm of Bizarro-world
economics.
Best,
Sean Parnell
President, Impact Policy Management, LLC
571-289-1374 (c)
sean at impactpolicymanagement.com
Alexandria, Virginia
From: Chambers, Hank [mailto:hchamber at richmond.edu]
Sent: Wednesday, August 26, 2015 1:32 PM
To: Sean Parnell; 'Rick Hasen'; 'Jonathan Adler'; law-election at uci.edu
Subject: RE: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
Of course, economic rents have been around since well before Tullock and
relate to money gained by those exercising some form of oligopoly power
above what they would gain through perfectly competitive markets. Such
power can be gained or maintained by lobbying to keep others out of their
market by raising barriers to entry or in many other ways. Folks can debate
the accuracy of President Obama's assertions, but the claim that he is not
talking about rent-seeking or does not understand what it is is not
convincing.
-Hank
Henry L. Chambers, Jr.
Professor of Law
University of Richmond School of Law
28 Westhampton Way
Richmond, Va. 23173
(804) 289-8199
hchamber at richmond.edu
From: Sean Parnell [mailto:sean at impactpolicymanagement.com]
Sent: Wednesday, August 26, 2015 1:08 PM
To: Chambers, Hank; 'Rick Hasen'; 'Jonathan Adler'; law-election at uci.edu
Subject: RE: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
Sigh. Of course I know Tullock developed the theory, but there is a pretty
standard definition of "economic rents" that is generally accepted by most
people who managed to stay awake through their college economics classes.
And Obama's isn't even close to it, again judging by his comments in Vegas.
Sean
From: Chambers, Hank [mailto:hchamber at richmond.edu]
Sent: Wednesday, August 26, 2015 12:59 PM
To: Sean Parnell; 'Rick Hasen'; 'Jonathan Adler'; law-election at uci.edu
Subject: RE: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
Tullock essentially invented the theory behind what is now called
"rent-seeking." Any claim that President Obama is using the term completely
inappropriately would seem to depend on how the term was defined at its
inception.
-Hank
Henry L. Chambers, Jr.
Professor of Law
University of Richmond School of Law
28 Westhampton Way
Richmond, Va. 23173
(804) 289-8199
hchamber at richmond.edu
From: Sean Parnell [mailto:sean at impactpolicymanagement.com]
Sent: Wednesday, August 26, 2015 12:44 PM
To: Chambers, Hank; 'Rick Hasen'; 'Jonathan Adler'; law-election at uci.edu
Subject: RE: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
Can't say I know much about how Tullock used the term, but I'm fascinated to
know which rents Koch industries currently receives. They're refiners, so
perhaps the domestic manufacturing tax credit? But I've seen no indication
that Obama or any of his political allies are interested in undoing this
little bit of corporate welfare. What rents to they receive?
This is far afield from the subject of this listserve (although given the
frequent allegations that campaign donations purchase rents, perhaps not),
but it's plainly obvious that the entire renewable energy market is propped
up with massive rents, while the fossil fuel industry has relatively few. If
you took away those handful of subsidies from the oil, natural gas and coal
industries (about $4 billion a year by most estimates), the industry would
continue to function pretty much the way it does today, with perhaps a few
marginal operations shuttering their doors. Take away the solar and wind
subsidies, the loans to renewable energy companies (loans which the private
sector wouldn't make, hence Solyndra), the tax credits for purchasing
electric cars, and everything else, and the industry would cease to exist in
about 2 days. The fact that all of these rents MAY, at some point down the
road, lead to a "more competitive energy market" does not change that they
are rents, and massive in scale.
So, let's assume for a moment that you and Rick are correct, that the
President does have a good grasp of what an economic rent is. Isn't he then
simply arguing, not against economic rents, but that they're going to the
wrong people? Shouldn't he have said something more along the lines of "The
Koch brothers are protecting their own economic rents by opposing the
economic rents of the renewable energy industry?"
But then that would probably entail some discussion of just how massively
the renewable energy industry is subsidized, which in turn might demonstrate
the falsity of claims the industry is becoming economically competitive.
Oh well. The president is either ignorant of what an economic rent is, or
deceitful. What a terrific set of options.
Sean Parnell
President, Impact Policy Management, LLC
571-289-1374 (c)
<mailto:sean at impactpolicymanagement.com> sean at impactpolicymanagement.com
Alexandria, Virginia
From: Chambers, Hank [ <mailto:hchamber at richmond.edu>
mailto:hchamber at richmond.edu]
Sent: Wednesday, August 26, 2015 12:27 PM
To: Sean Parnell; 'Rick Hasen'; 'Jonathan Adler';
<mailto:law-election at uci.edu> law-election at uci.edu
Subject: RE: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
I suspect President Obama meant that the Koch brothers were seeking to
maintain their own economic rents by lobbying to oppose various industries
that would help bring a fuller and more competitive energy market. That
seems to fit comfortably within how the term is currently used, and even
with how Gordon Tullock used it.
-Hank
Henry L. Chambers, Jr.
Professor of Law
University of Richmond School of Law
28 Westhampton Way
Richmond, Va. 23173
(804) 289-8199
<mailto:hchamber at richmond.edu> hchamber at richmond.edu
From: <mailto:law-election-bounces at department-lists.uci.edu>
law-election-bounces at department-lists.uci.edu [
<mailto:law-election-bounces at department-lists.uci.edu>
mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Sean
Parnell
Sent: Wednesday, August 26, 2015 11:25 AM
To: 'Rick Hasen'; 'Jonathan Adler'; <mailto:law-election at uci.edu>
law-election at uci.edu
Subject: Re: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
I'd like to see some evidence of that then, because his comments in Vegas
point in the other direction (although Professor Adler does provide a
reasonable explanation of what happened as well).
Sean Parnell
President, Impact Policy Management, LLC
571-289-1374 (c)
<mailto:sean at impactpolicymanagement.com> sean at impactpolicymanagement.com
Alexandria, Virginia
From: Rick Hasen [ <mailto:rhasen at law.uci.edu> mailto:rhasen at law.uci.edu]
Sent: Wednesday, August 26, 2015 11:21 AM
To: Jonathan Adler; Sean Parnell; <mailto:law-election at uci.edu>
law-election at uci.edu
Subject: Re: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
Of course the president knows what rent seeking is.
On 8/26/15 8:15 AM, Jonathan Adler wrote:
There is an alternative explanation: The President is fully aware of what
"rent-seeking" means, and just chose to use the term improperly or
dishonestly. Is that what Rick is suggesting? I think the suggestion that
Obama (or his speechwriter) does not fully understand the meaning of the
term (and what it means to seek economic rents) is the more charitable of
the two, but YMMV.
------
Jonathan H. Adler
Johan Verheij Memorial Professor of Law
Director, Center for Business Law & Regulation
Case Western Reserve University School of Law
11075 East Boulevard
Cleveland, OH 44106
ph) 216-368-2535
fax) 216-368-2086
cell) 202-255-3012
<mailto:jha5 at case.edu> jha5 at case.edu
SSRN: <http://ssrn.com/author=183995> http://ssrn.com/author=183995
<http://www.washingtonpost.com/news/volokh-conspiracy/wp/author/adlerj/>
http://www.washingtonpost.com/news/volokh-conspiracy/wp/author/adlerj/
From: <mailto:law-election-bounces at department-lists.uci.edu>
law-election-bounces at department-lists.uci.edu [mailto:
<mailto:law-election-bounces at department-lists.uci.edu>
law-election-bounces at department-lists.uci.edu] On Behalf Of Sean Parnell
Sent: Wednesday, August 26, 2015 10:56 AM
To: 'Rick Hasen'; <mailto:law-election at uci.edu> law-election at uci.edu
Subject: [EL] Charles Koch "Flabbergasted" by Obama Criticism, Wants to
Educate Him About "Rent Seeking"
Rick, based on his comments in Vegas, I can assure you that Obama has no
clue what "rent seeking" is. There are cases to be made (mostly bad cases
IMHO, but cases nonetheless) for giving subsidies, guaranteed market share,
protection from foreign competition, and other goodies to the renewable
energy industry. But there's no case at all, at least from an economic
perspective, for arguing that opposing those policies amounts to rent
seeking. None.
Sean Parnell
President, Impact Policy Management, LLC
571-289-1374 (c)
<mailto:sean at impactpolicymanagement.com> sean at impactpolicymanagement.com
Alexandria, Virginia
Posted in <http://electionlawblog.org/?cat=10> campaign finance,
<http://electionlawblog.org/?cat=59> campaigns
<http://electionlawblog.org/?p=75594> Charles Koch "Flabbergasted" by Obama
Criticism, Wants to Educate Him About "Rent Seeking"
Posted on <http://electionlawblog.org/?p=75594> August 25, 2015 7:58 pm by
<http://electionlawblog.org/?author=3> Rick Hasen
<http://www.politico.com/story/2015/08/charles-koch-blasts-obama-121746.html
> Mike Allen:
Charles Koch hit back at criticism of "the Koch brothers" during President
Barack Obama's energy speech in Las Vegas earlier this week, saying he was
"flabbergasted" by the attack and charging that Obama made the dig as a
favor to Senate Minority Leader Harry Reid (D-Nev.), who appeared with him.
"It's beneath the president, the dignity of the president, to be doing
that," Koch said during a phone interview Tuesday.
That's not the American way. That's not progress. That's not innovation.
That's rent seeking, and trying to protect old ways of doing business and
standing in the way of the future."
Obama continued: "I mean, think about this. Ordinarily, these are groups
that tout themselves as champions of the free market. If you start talking
to them about providing health care for folks who don't have health
insurance, they're going crazy: 'This is socialism, this is going to destroy
America.' But in this situation, they're trying to undermine competition in
the marketplace, and choke off consumer choice, and threaten an industry
that's churning out new jobs at a fast pace."
Koch shot back: "I don't know whether he knows what that phrase means, but
'rent seeking,' of course, is, in economic terms, is getting the government
to rig the system in your favor. And that's exactly what these so-called
'renewable energy' proponents are doing."
I'm guessing that Obama, who taught at the University of Chicago, is
familiar with the term "rent-seeking."
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bama%20Criticism%2C%20Wants%20to%20Educate%20Him%20About%20%E2%80%9CRent%20S
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--
Rick Hasen
Chancellor's Professor of Law and Political Science
UC Irvine School of Law
401 E. Peltason Dr., Suite 1000
Irvine, CA 92697-8000
949.824.3072 - office
949.824.0495 - fax
rhasen at law.uci.edu
http://www.law.uci.edu/faculty/full-time/hasen/
http://electionlawblog.org
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