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Posts Tagged ‘Free Trade’

When you look at the various policies that have contributed to America’s current crisis, it’s evident that a series of bipartisan, popular-with-elites, and thoroughly short-sighted policies have done much to bring us to where we are.   These policies are largely sacrosanct, particularly among elites, in spite of where we find ourselves as a country.  These include the following:

  • Free trade orthodoxy that eschews any “industrial policy” and has sent a great number of American jobs and much of America’s manufacturing capacity to the Third World, particularly China.
  • A related lack of criticism of our low wage, high consumption economic regime.  Americans’ wages have stagnated and credit–including housing based credit and refinance loans–did much to mask that wealth and wage decline over the last 15 years.
  • Support for multiculturalism, diversity, and mass immigration, which has left America disunited, with a lower wage and lower IQ workforce, and problems of Third World violence and terrorist acts that were formerly unknown to America.
  • A belief that home ownership is something attainable for all and that public policy should support the housing sector with various subsidies for the uncreditworthy.
  • A belief that a college degree is something attainable for all and that it should be subsidized by government grants and loans, which has left many Americans with worthless pseudo-degrees in subjects like “packaging” or “communications” along with mountains of (nondischargable) debt.
  • Indifference to unsustainable government pensions, transfer payments and welfare policies, including Medicare and Social Security, which will be insolvent in short order and will ultimately bankrupt the country.
  • Indifference to high rates of illegitimacy, which is subsidized by various government policies like Section 8 housing vouchers, food stamps, AFDC, and the like.
  • Support for global crusading, interventionism, and other activities that cost a great deal of money, employ our military in thankless and impossible ventures like Iraq and Kosovo, and that create enemies with long memories, while winning us few friends.

The thread that unites these phenomena to me is that they are all mutually enforcing, rooted in cosmopolitanism and sentimentality, and all are far from being solved.  Indeed, some of these problems are being made worse, as in the ram-through of Obamacare.  Elites have offshored jobs and imported cheap labor, which has pushed down wages and reduced productivity-per-worker, as well as the mean IQ, which in turn is masked by easy credit, worthless degrees, welfare policies, deficit spending, and denial regarding America’s various fiscal crises.  The foreign policy problem is mostly sui generis, except insofar as our elites believe so highly in themselves and consider the interests of random Third Worlders equally valuable as those of their countrymen.

In all of these areas, the elites have dissipated the country’s wealth, especially its human capital.  Whether Republican or Democrat, anyone who believes these things does not deserve to govern.

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Bush was never a real believer in Free Markets. He instead believed in preserving the power and privilege of people like him. He sold it as a new kind of middle way, so-called “compassionate conservatism.”

Bush did not work hard to get where he was, instead inheriting his name, his network, and most of his money from his family. My experience with these “fortunate sons” is that they have a certain blindness about their own and others’ economic fortunes. Not having attained their success through their own efforts, they either feel guilty about it and indulge in various guilt-driven flirtations with leftism, or, alternately, don’t care about the structures that allowed their enterprising ancestors to attain wealth, aiming instead to preserve what they have at the expense of the economy as a whole.  Consider Bush’s perception that a woman who needed three jobs to support herself and her family was “uniquely American” rather than a tragic consequence of a low wage, screwed up economy.

Bush has been willing to sell out American workers and manufacturers out for many years to China and Mexico in the name of a cockeyed notion of fairness.  Now, worried about his legacy, he’s willing to kick the auto manufacturing can down the road by giving away TARP money to the Big 3 automakers.  There is no rhyme or reason to it, and his selective involvement in the economy is an invitation to chaos and politically chosen winners and losers.  Instead of setting the rules of the road, under Bush, the government has chosen very distinct winners and losers in the economy.

Consider Bush’s numerous deviations from free market principles and basic fair play:

  • The giveaway to MBNA and other credit card companies in the ex post facto bankruptcy reforms of 2005;
  • The giveaway to the pharmaceutical industry in the form of the prescription drug Medicare benefit of 2006;
  • The rescue of Bear Sterns earlier this year coupled with the rejection of a Lehman Brothers bailout;
  • The $190B farm subsidy bill of 2002;
  • The cheap-money, high deficit imposition of various costs on future generations in order to create the present day illusion of prosperity.

Bush has repeatedly put a particular social class–corporate America, its multinational managerial elite, and the wealthy in general–above the good of the country as a whole.  Unlike Reagan and the long traditions of the Republican party, Bush has shown indifference to American workers and businesses most threatened by globalization. Obviously the Big 3 have problems largely of their own making, caused not least by the short-sighted greediness of their unions.  But they did not create the last decade’s unbalanced trade with China, our overly leveraged and under-regulated financial sector,  the slow money-suck of constant inflation, nor the immigration-driven wage gap with the rest of the “blue collar” economy.  They should not be bailed out now, not least because they have a tool in bankruptcy to reform themselves.  But the trade and monetary conditions of the last 10-20 years should never have come to pass.  Now terrible decisions are being made under crisis conditions by an ideologically unmoored failure.

Unfortunately, Obama and the Democrats promise more of the same whether in the form of spending on make-work infrastructure programs, appointing an “auto czar,” or “investing” in new technologies.  Their policies, an exagerrated version of Bush’s with even less regard for the national interest, will perpetuate the legacy of cronyism and failure with slightly different winners and losers, i.e., giveaways to minorities, the unproductive, and politically correct Third World supplicants.  Whenever the government gets involved in these matters and insulates participants in the market from the usual requirements of profit, loss, and competition, then political considerations come into play, just as they do in a smaller way in the realm of government contracts, such as the practice of affirmative action set asides and other forms of patronage.

Bush did not embrace free markets tempered by some consideration of the necessity of a strong, vibrant, and diversified national economy.  Unfortunately, his term went down in the recent history books as “extreme conservatism” rather than the nonideological jumble that it was, the reflection of a man with a peculiar past and a worldview formed by lifelong associations with preservation-minded elites in the world’s most corrupt nations.

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