– September 23, 2019
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Even though the hit television show Seinfeld has been off the air twice as long as it was on, revenues from this globally popular comedy continue to grow. Between 1998 and 2014, Seinfeld generated syndication fees and advertising revenues to the tune of $3.1 billion. In 2015, Hulu purchased streaming rights to the show for $160 million. What’s amazing, at least in retrospect, is how few (including the show’s creators) saw this bonanza coming.

This isn’t to say that Jerry Seinfeld wasn’t always funny. He was. Seinfeld realized during childhood that he had a gift for comedy, at which point he decided to make a career out of his comedic skills. But despite seemingly being born with the ability to make people laugh, Seinfeld was similarly well aware of just how difficult it was to be funny, even for the talented.  So he worked.

In his early days of stand-up, Seinfeld went as long as 18 months without a single night off.  Ahead of his first appearance on The Tonight Show Starring Johnny Carson in 1981, a show the then-fledgling comedian viewed as “the Olympics, the Super Bowl, and the World Series all rolled into one,” Seinfeld repeated his five-minute monologue over two hundred times. He even played videos of Superman to get his mind right before appearing in front of his hero.

But even after appearing on Carson, Seinfeld still hadn’t exactly “made it.” He’d already been fired by the hit ABC television show Benson in 1980, and then in 1988 ABC passed on him in favor of Howie Mandel for a sitcom pilot titled Past Imperfect. Even some critics weren’t terribly impressed with the comedic skills he’d developed over many years and many nights.  The same year that ABC turned him down in favor of Mandel, Lawrence Christon of the Los Angeles Times observed about Seinfeld that “He’s expressive.  He’s clear. And he’s completely empty.” Christon spoke too soon, or did he?

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Around the time of his ABC rejection, Seinfeld and Larry David were putting together a sitcom idea that was called The Seinfeld Chronicles. But the questions remained. While NBC executives laughed throughout the pilot, entertainment chief Brandon Tartikoff asked, “Who will want to see Jews wandering New York acting neurotic?” NBC ultimately passed on The Seinfeld Chronicles for its upcoming fall lineup in favor of a show starring Cloris Leachman as “the oversexed head of housekeeping at a family-owned New York City hotel.” The Seinfeld Chronicles pilot would instead air as a one-time summer “special.” Back then, networks viewed the summer as a graveyard for shows they felt lacked promise.

Even Larry David felt the “show about nothing” was going nowhere. When NBC ultimately ordered 13 episodes for a mid-season launch in January of 1991, David told a friend, “I’m going to get a Lexus.  I’ll never be able to afford one again.”

And while Seinfeld started slowly, it gradually developed an audience, and eventually became a global phenomenon. It turns out many millions wanted to tune in to a show about neurotic Jewish people wandering New York’s Upper West Side. Seinfeld brought “can’t miss” to “must-see” TV, particularly in the days before broad DVR ownership.  What’s notable here is that when crooner Frank Sinatra fell ill (and ultimately died) the night of the show’s finale, ambulances were able to rush him to the hospital with great speed since the roads of Los Angeles were largely empty. Readers can imagine where they were as the finale unspooled.

As may be a frequent refrain at this point, what could Seinfeld possibly tell us about liberals and industrial policy?  The answer is very little, but also quite a lot.

To see why, it’s worth pivoting to a 2010 op-ed by New York Times columnist Thomas Friedman. Friedman is plainly of the view that global warming isn’t just a threat, but an existential threat to the earth as we know it. Given his stridency on the subject, he thinks a pursuit of the green energy that presently accounts for a microscopic fraction of total energy usage is essential for the future of the planet. And he thinks that inaction on the part of the U.S. political class in terms of green subsidies represents the downfall of the U.S. as we know it. Writing from Hong Kong in 2010, Friedman observed:

“Being in China right now I am more convinced than ever that when historians look back at the end of the first decade of the 21st century, they will say that the most important thing to happen was not the Great Recession, but China’s Green Leap Forward. The Beijing leadership clearly understands that the E.T. — Energy Technology — revolution is both a necessity and an opportunity, and they do not intend to miss it.

We, by contrast, intend to fix Afghanistan. Have a nice day.”

What’s notable about Friedman is that his views haven’t changed on the matter. In a January 2019 column for the Times, Friedman asked “[W]ho believes that America can remain a great country and not lead the next great global industry? Not me. A Green New Deal, in other words, is a strategy for American national security, national resilience, natural security and economic leadership in the 21st century.”

What’s perhaps more interesting about Friedman’s unyielding stance is that he views the pursuit of green energy as something that’s as crucial to the U.S.’s economic future as it is America’s environmental future.  In Friedman’s words,

“We are either going to put in place a price on carbon and the right regulatory incentives to ensure that America is China’s main competitor/partner in the E.T. revolution, or we are going to gradually cede this industry to Beijing and the good jobs and energy security that would go with it.”

Friedman’s belief that the green energy story is an economic one explains this chapter’s introduction. That Seinfeld was seen by top NBC executives as less-than-promising, only for it to become a multi-billion dollar blockbuster is a simple reminder that when it comes to the future of commerce, predictions aren’t worth the paper they’re printed on. As former CBS entertainment chief Jeff Sagansky once put it, “All hits are flukes.” If those who produce television shows for a living struggle to divine what will appeal to the viewing public, why should we believe a pundit like Friedman would possess an otherworldly sense about how energy will be consumed in the future?

More to the point, if Friedman had even a small clue about what will prove commercially viable in the coming years and decades in the energy sector, he most assuredly wouldn’t be toiling for the Times. Nothing against the Paper of Record, but investors would pay Friedman many billions to come work for them if his instincts about the future of power carried any weight. With those billions Friedman could invest in green energy to his everlasting delight!

As for green energy itself, it’s presently near-irrelevant as a global power source as Chapter Three made clear, and projections going out many decades indicate that it won’t be terribly relevant even then. Still, and in fairness to Friedman, Bjorn Lomborg likely has as much knowledge about the power sources of the future as Friedman does. Leaving aside the very real or very overstated implications of a global failure to pursue green energy, basic economic and market logic dictate that our energy future is plainly unknown to Friedman and Lomborg alike.

Okay, but what if Friedman is correct? What if China’s “Green Leap Forward” proves thoroughly prescient such that China winds up the world leader in the green-energy space? If so, wonderful.  At present China’s businesses direct 18 percent of their exports to the United States, and if demand for green energy proves abundant, China’s energy companies will direct a lot more of their production our way.

But what if China’s “Green Leap Forward” proves as financially disastrous as its horrific Great Leap Forward was for humanity? In thinking about this, it’s worth returning to the oft-repeated truth stated in this book that nine out of ten startups in Silicon Valley go bankrupt. The previous statistic is a reminder that whatever the confidence of China’s government officials and the businesses they’re subsidizing, what’s ahead is rather unknowable. Assuming the energy future is green, odds are it’s not going to look anything like what Friedman presumes. In short, the U.S. political class would be wise to not only cease trying to fix Afghanistan, but also avoid directing precious resources created by others into a sector about which they likely know less than Friedman does. Contrary to Friedman’s overdone pretense that he can see around corners, in the real world investment is very hard.  In that case, it’s more than reasonable for the U.S. to sit back and let China expend enormous resources on something that private investors – at least for now – see as unworthy.

The main thing here is that if China’s correct, we in the U.S. will be able to access its green energy innovations as though they’d been crafted right here.  Such is the genius of imports, and free trade more broadly. That the U.S. imports shoes from Italy, bananas from Guatemala, smartphones from China, and cars from Japan isn’t a sign of weakness as much as it signals extraordinary economic strength stateside. That is so owing to the basic economic truth that we can only import more than any other country insofar as we’re producing enormous abundance right here. Green energy is no different from “dirty oil;” it’s ours at the market price so long as our domestic production rates imports.

What’s crucial about all this is that so long as we focus on the production most commensurate with the skills of people right here in the U.S., as in we pursue our comparative advantage, we’ll logically have much greater means to import that which doesn’t most animate our talents, or that which we could apparently be “late” to. For now, and with it still true that green sources of energy can’t walk without government support, logic dictates that we sit out what has Friedman so hysterical.

And while it’s more than silly to waste ink on, what if China, having “beaten” us to green energy, decides to withhold it from us? The very idea is absurd considering what a great market American consumers represent for Chinese producers. It’s a similarly ridiculous presumption in light of the fact that Friedman thinks green energy is the “next big thing.” If so, why would Chinese producers miss out on the windfall that would come from exporting its genius to the U.S.? Friedman has no answers. But assuming they want to keep their energy innovations from us we can simply buy it from those they sell to.

What about if we’re at war with China? What if China’s government decides to go to war with the best market for its biggest companies; something that would harm them, along with the country’s citizens who, according to Friedman are “in the midst of the biggest migration of people from the countryside to urban centers in the history of mankind?” If so, we’ll still be able to consume China’s green energy as though it had been produced right here. Indeed, going back to 1810 when England was at war with almost every European power, it was still able to import 1,491,000 quarters of wheat, including half a million from frequent battlefield foe France.

Whatever the long-term truth about the implications of “global warming,” and whatever market actors decide to produce in order to mitigate what remains a speculation, readers need never worry about Americans going without. So long as we’re productive here, we’ll be showered with imports from around the world in return for our production.

This includes goods and services of the green kind. When liberals promote industrial policy based on how they see the future unfolding, they’re not just revealing their naivete about just how difficult it is to predict the future. They’re also revealing a misunderstanding concerning why people produce. They produce in order to “get.” This includes “green energy,” assuming it ever becomes what its most ardent cheerleaders claim it will become.

And while a future chapter will address the odd worship conservatives have for oil, for now we’ll turn to the subject of repatriation of global earnings. On this subject, conservatives reveal a misunderstanding similar to Friedman’s whereby they’ve forgotten that the only closed economy is the world economy.

Excerpted from They’re Both Wrong: A Policy Guide for America’s Frustrated Independent Thinkers, published by AIER in 2019.

 

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John Tamny

John-Tamny

John Tamny, research fellow of AIER, is editor of RealClearMarkets. His book on current ideological trends is: They Are Both Wrong (AIER, 2019)

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