The End of American Super Hegemony

America will remain the world’s most important country during all our lifetimes, but our position as THE important country is weakening for some reasons that we should welcome. The rest of the world is adopting many of the things that made America prosperous and special.

We are becoming a world of market-based democracies and that is making everyone better off in the absolute sense, but since most other countries started from lower bases they are also improving relatative to us; they are catching up.

This is a welcome trend. Prosperous and stable countries make better partners than poor and benighted ones. Our trade benefits from doing business in a flourishing world. It is a myth – at least in the long run - that you can make more money through exploitation. As our trade figures clearly show, a rich country like Norway is “worth” a lot more to American business than a poor country like Malawi. Rich countries are productive ones and productivity produces wealth everyone can use.

Unbelievable as it sounds today, up until the late 1960s (even longer on some university campuses), many experts believed that communist or central planning socialist systems could actually produce more than market economies. When Nikita Khrushchev famously said, “We’ll bury you,” he meant economically. Academic theory of the times confirmed that a centrally planned economy, where resources were logically allocated by wise officials, would outperform the chaos of the marketplace. I am not sure if theory even today has caught up to reality.

Although many do not live up to it, In the last 25-50 years, much of the world has embraced the concept of the free-market democracy. Even retrogrades pretend to hold elections and when we discuss differences among prosperous countries, we are talking about different species of market economies. There are a few places like North Korea, Zimbabwe, Cuba or Burma that have tried to maintain centralized control. There are even a few going backward like Venezuela and Bolivia, but for the most part markets have triumphed around the world (even if democracy sometimes has not followed closely enough, cf China), even if sometimes the old fashioned rhetoric remains.

A couple generations ago, the U.S. was THE market economy. Our regulations were less onerous; our tax rates were lower and our respect for private business firmer than almost anywhere else. But this is changing. We used to have the lowest corporate income tax in the developed world. Today we are the second highest. Our rate didn’t change. Others improved theirs. The same goes for regulation. London is displacing New York as world’s premier financial capital because our regulations are now relatively more onerous. It is not that ours got worse (except maybe SOX) but theirs imroved.

The U.S. is still among the most competitive nations in the world, but we are no longer alone at the top. Investors and business people now have options. If you believe choice is positive, this is a positive development. It also limits the scope of government policymakers. Depending on your point of view, this may be a good thing too. International markets and potential competition reign in policy makers in ways that would have been astonishing a generation or even a decade ago.

This hallelujah chorus of good news is tempered by a few things I hope to discuss in subsequent posts.

Overall, however, the new world order looks to be a positive development. It may hurt the American ego, but if we become a world of market-based democracies, we will all be better off. Imagine a world were most places have governments and market-economies like the U.S., Europe & Japan. Consider the analogy of early America. The State of Virginia was once the dominant U.S. state. Most of our early presidents were Virginians. As the U.S. grew and developed, Virginia’s relative place declined rapidly, but certainly its people are much better off today than they were in 1812 and they are certainly much better off than if the rest of the U.S. had remained undeveloped or had been retarded by some sort of poor predatory government, as we found in many other post colonial situations.

Personally, I welcome the change. It is about time the rest of the world pulled it own weight and stopped blaming us for all their screw ups.

Posted by Jack at May 9, 2008 4:45 AM
Comments
Comment #252507

Jack, what you say in your introductory paragraphs, may become true, but, it is presumptuous in the extreme to state that this unprecedented condition of humankind and nations will prove to be a net positive.

There is much that is new to human history taking place. The advent of nuclear weapons proliferation for example. The greatest concentration of human beings on the earth’s surface ever. The mass conversion of earth’s natural state resources to artificial state consumables and waste byproducts. And these are just a few.

There is much that can and may fail in this haphazard development of humanity and civilization around the globe. Inauspicious failures at the wrong time, could spell massive human population declines, and even a reversal of the path on which we, as a biological species, are embarked upon.

I want your rosy scenario to become true for the future. However, I would venture to say that to insure that it does, the people’s, governments, and economics of our species will have to far better balance opportunistic behavior with deliberate, rational, and ongoing tested courses of action if we are to insure such an outcome.

There is much hope in the admission of mankind’s intellects that our species is now globally interdependent, and that much more care and united common interest vigilance is now required of our nations, our peoples, and our institutions. Free enterprise however, as it is developing today in the form of oligopolies with ever growing political influence, is now one of the greatest threats humanity faces going forward.

The reason is that such oligopolies have but one master. And it is a short term, short sighted master, for which profit, regardless of the consequences to the planet, the species, or long term survival requirements, is the only governing interest and guide to action. This is as true of development in Communist China as it is in the U.S. These oligopolies are strategically making inroads to accessing the power of governments and mass communications to further their own short sighted ends.

If these oligopolies succeed in becoming themselves the power within governments, our species’ future on this planet is anything but assured as safer, more prosperous, and more inextinguishable.

Revelations are unfolding this week in the Congress about how the EPA became the instrument of the oligopolies under the Bush administration and how the consequences reveal an agenda that made children and adults expendable in the name of profitability. This is the battle being waged around the world, and democracy so far has not proven to be a very effective defense against in this battle between a deliberative future for humankind vs. one determined by the shortest route to next quarter’s profits by the oligopolies. This includes the industrial military complexes in the large nations which Pres. Dwight D. Eisenhower warned about so emphatically and prophetically.

Posted by: David R. Remer at May 9, 2008 6:12 AM
Comment #252508

I guess this article is inspired by the book by Fareed Zakaria
, The Post-American World, but I wonder when we will actually become a market-based democracy, without the central planning of the District of Columbia, and Arlington, that makes Virginia prosperous, instead of a rural backwater. Democracy sounds so nice, much better than this coporate oligarchy crap with their overpaid commisars, that we have here.

Exactly when was the “couple generations ago” that we were “THE market economy”? I guess you are talking about a short period during the 1920s, when we were prosperous because we stayed out WW1 until the very end of it. That is obviously not a set of circumstances that could easily be duplicated again.

Posted by: ohrealy at May 9, 2008 9:18 AM
Comment #252515

The problem with your scenario Jack is that a small group of super wealthy are being allowed to choreograph how this all plays out. They have the means to manipulate the process to benefit their greed induced wants. This small committee of global financial wizards are regulating the world to ensure a continuance of compounding wealth for a select few. They are doing everything they can to ensure that they control how we spend our money and guarantee that they will get a large percentage of all we earn. As David says this process is driven by profits. It has been obvious for some time now that where corporate needs are concerned profits trump human suffering. The global market may distribute opportunity and products more evenly around the world, but at what cost to the masses of working class people if not properly regulated.

Should us common folks simply sit back and allow this process to continue until eventually the corporate powers of this world will have molded a society in which they dictate circumstances? Is there really any valid reason to believe that an evolution of corporate global control is not happening right now? Is a ruling class of global financial commissars with the influence to control how we live really any different than socialism?

I would love to be optimistic here. I can imagine nothing better than a world in which everyone is treated fairly and has available all the good things in life. But I must admit to being pessimistic here. But it is a cautious pessimism. I do not like the idea of a few being allowed to determine how a global society will play out. It seems to me that there is a bit too much room for error and greed to trump human rights.

Posted by: RickIL at May 9, 2008 10:33 AM
Comment #252516

One of the reasons a planned economy is so attractive is because what people want is not always what people want. Because a free market is based on consumers demands, we get huge entertainment and luxury sector of the economy. In fact entertainment is the USs’ main export.

Do we really need 1 million units of fake vomit? NO. Is there some factory in China that is producing some as we speak? Yes.

There is a demand for coral necklaces, and aquariums filled with exotic fish. Are these demands wreaking havoc on our fragile environment? YES.

I am not saying people are stupid. I’m not saying I know what is best for anybody. I do know that these two examples are a waste of TIME LIFE AND RESOURCES. These things are undervalued in our current economy.

I am saying that people are selfish. I am saying that we are masochists.

We have turned away from the harsh struggle of life and it spread across the universe and have chosen a warm cozy burning bed.

We also have seen that the market does not plan well for the future, and as I have said in the past often takes a “if it ain’t broke” attitude.

Posted by: Jason Ziegler at May 9, 2008 10:45 AM
Comment #252518

*what people want is not always what people need

also, well stated RickIl

Posted by: Jason Ziegler at May 9, 2008 10:55 AM
Comment #252519
The reason is that such oligopolies have but one master. And it is a short term, short sighted master, for which profit, regardless of the consequences to the planet, the species, or long term survival requirements, is the only governing interest and guide to action.

This is an interesting characterization of corporations. Do any human beings work at these oligopolies???

Posted by: Mr. Haney at May 9, 2008 11:39 AM
Comment #252520

I witnessed the beginnings of the free market movement in China in 1989 when I visited a province in China (can’t remember the name, but it adjoins Macau, just across the bay from Hong Kong) in which the farmers were allowed to keep a share of the crops they produced above what the centralized government demanded from them.

Our Chinese guide explained that he and most of those he knew were not communists, but merely paid lip service to those in command.

We visited a couple of rural farming communities and their lives, while in no way comparable to Western lives, were substantially better than in the other provinces. They were breathing the first whiffs of a free market and loved it. With the profits from their share of their labor some even had sewing machines and other conveniences we take for granted.

I have watched China over the years since 1989 and this small beginning has spread throughout the country and has lifted the life of millions who have benefited. The change from centralized planning and pervasive heavy-handed government rules and planning to an ever-expanding free market economy is astonishing to watch. As China’s vast population gains power thru free markets I believe they will some day throw off the shackles of communist socialism.

Posted by: Jim M at May 9, 2008 12:18 PM
Comment #252522

Jim M

It is interesting that you praise the emerging free market in China. Here we can truly see the hideous realities.

People sell sawdust as baby food. (resulting in brain swelling and death)

People sell Dvds of American movies for barely above the cost of production. (5-10 rmb) ($.67-$1.25)

Advertisements for forged diplomas and certifications literally line the streets..

Why, because there is a demand, and there is very little enforced regulation.

Intellectual Property rights is a form of regulation. Food and drug safety acts are regulation.

How is a business supposed to enfore these regulations on a society or a competitor?

The market will never, never be truly free. Thank a higher power for that.

Posted by: Jason Ziegler at May 9, 2008 12:51 PM
Comment #252523

“We have turned away from the harsh struggle of life and it spread across the universe and have chosen a warm cozy burning bed. “

I would like to recant the above statement, as it is obviously ridiculous, and reflects my comfortable position in life, as well as my disconnect from people that do struggle to merely survive.

Posted by: Jason Ziegler at May 9, 2008 1:11 PM
Comment #252524

Jim,

I have to echo some of Jason’s comments above.
I was in China in ‘95 and ‘97, though admittedly I haven’t been back since.
Wages were $2.00 a day.
You could buy Adobe Suite, and Microsoft Office Suite for $10.00 American each.

Perhaps China is going through the development stage that Japan went through in the ’50s, and Korea went through in the ’80s, and ’90s.

The Chinese seem to be great imitators, but not great inovators.
Surely the reason they are kicking our ass right now is that most of our major corporations have moved their manufacturing to China.

I can only assume that China’s days as the major supplier of rubber dog poop are numbered.

Posted by: Rocky at May 9, 2008 1:29 PM
Comment #252525
One of the reasons a planned economy is so attractive is because what people want is not always what people need.

But who presumes to know and define needs of the citizenry and, therefore, direct capital to meet those needs? To paraphrase Adam Smith, any man or group of men presumptuous enough to claim that knowledge is unfit to exercise it.

Posted by: Mr. Haney at May 9, 2008 1:31 PM
Comment #252533

Jason and Rocky, I apologize for not making it more clear that many problems still exist in China, those called “hideous realities” by Jason.

My point is that an emerging free market in China has benefited millions of their people and is a step in the right direction.

Too often those of both the liberal and conservative position believe one is black and the other is white.

In reality, liberals have served as the accelerator and conservatives as the brake. No one wants the car to spin off the cliff for going to fast, or be rear-ended for going to slow; realizing that at times, we have done both.

I’ll continue to apply the brake and you will continue to hit the accelerator and we’ll be just fine as long as the fool at the steering wheel doesn’t fall asleep or isn’t on drugs.

Posted by: Jim M at May 9, 2008 2:40 PM
Comment #252548

Fake vomit and rubber dog poop could be a metaphor for the contents of a WalMart. When they first opened up, I thought, wow, look at all these nifty cheap little things. Later on, I looked at the same stuff and realized it was all just useless crap.

The thing that bugs me most are the shoe companies. You find a brand of shoe that fits and is comfortable, but the next time you buy the same brand, it’s not the same, even if it looks the same. They are all racing to the bottom of the labor market, and can’t even provide a consisently reliable product.

Posted by: ohrealy at May 9, 2008 5:42 PM
Comment #252555

Mr Haney said: “This is an interesting characterization of corporations.”

My characterization was of oligopolies, not corporations. Amongst corporations there are examples of finely run operations which take life, liberty, and environment very much into their considerations and operations.

Oligopolies on the other hand, are monopolies made of more than one party in the industry. OPEC is one such oligopoly. The Pharmaceutical industry is another. These industries have squeezed competitiveness out of their industries and replaced it with mutual benefit and cooperation dedicated to increasing their primary investor’s wealth above all other interests and everyone else. The military industrial players are another example.

Posted by: David R. Remer at May 9, 2008 6:19 PM
Comment #252567

Jack:

There you go being optimistic again.

A couple of points.

1. Democracy usually grows inversely related to the price of oil. There for as one article I recently read stated Democracy and Market based economics is in a bit of a slump as of recent.

2. I came across another statistic. In 1940 England, France and Germany combined had a GDP slightly less than USA. Today they are about half. If someone wants to talk about the demise of our country, they should look at Europe first. The “big three” of Europe have slipped from 20% of world GDP to about 10% where as America is about the same a percentage of GDP.

3. A much larger story that what happens to the USA seems to me to be the decline of Japan, Germany, France, Italy etc. Socialism is about to take a big fall as they start to drop off the planet. America’s GDP grows about 70% faster than old Europe and Japan.

4. I look for China and USA to pretty much be running things in 20 years.

5. I am curious about Brazil’s oil production. Wow what a difference in world politics if we do not need middle east oil anymore.

Posted by: Craig Holmes at May 9, 2008 9:46 PM
Comment #252574

Jim,

“My point is that an emerging free market in China has benefited millions of their people and is a step in the right direction.”

Point taken, however, one of Jasonn’s “hideous realities” is that because of an unbridled “free market” the air in Eastern China is nearly toxic.

11 of the 20 most polluted cities in the world are in China, and most of the major cities in China that didn’t make the list aren’t far behind.

I grew up outside LA in the ’50s and ’60s. I know from air pollution, and the LA of then doesn’t hold a candle to what is going on in China right now.

Posted by: Rocky at May 10, 2008 1:15 AM
Comment #252576

Mr. Haney said: “But who presumes to know and define needs of the citizenry and, therefore, direct capital to meet those needs? To paraphrase Adam Smith, any man or group of men presumptuous enough to claim that knowledge is unfit to exercise it.”

Then you are opposed to supply side economics in which a very few at the top of management decided on product lines and diversity, instead of letting demand and competition do that? General Motors was such a supply side run corporation, refusing to anticipate and listen to customer demands, all the while losing market share to companies that would, like Toyota, Honda, and Kia.

Regulation is absolutely necessary to prevent monopolism and oligopolism which, as you say, constitutes a handful of persons dictating what the market shall have, in what amounts, and when. The natural end state of investor driven corporations is monopoly. You do realize that, right? Adam Smith has very much to say on that matter. Adam Smith has even more to say on what is prerequisite of a people in terms of moral and ethical sentiment if they are to constrain the invisible hand of competition from reaching its ultimate conclusion without regulation. See Theory of Moral Sentiments, the work Adam Smith first wrote as the foundation for Wealth of Nations. For wealth alone is insufficient a motive to create and maintain quality of life and humanity towards and between people, especially amongst those with both wealth and power whose wealth and power become self-sustaining against all other considerations and pressures without an immersion in the moral sentiments of common working folk of good moral and ethical character.

Here is a passage from Adam Smith worth noting:

As the violation of justice is what men will never submit to from one another, the public magistrate is under a necessity of employing the power of the commonwealth to enforce the practice of this virtue. Without this precaution, civil society would become a scene of bloodshed and disorder, every man revenging himself at his own hand whenever he fancied he was injured. To prevent the confusion which would attend upon every man’s doing justice to himself, the magistrate, in all governments that have acquired any considerable authority, undertakes to do justice to all, and promises to hear and to redress every complaint of injury.

In all well-governed states too, not only judges are appointed for determining the controversies of individuals, but rules are prescribed for regulating the decisions of those judges; and these rules are, in general, intended to coincide
with those of natural justice. It does not, indeed, always happen that they do so in every instance. Sometimes what is called the constitution of the state, that is, the interest of the government; sometimes the interest of particular orders of men who tyrannize the government, warp the positive laws of the country from what natural justice would prescribe.

[Section IV -Of the Manner in which different Authors have treated of the practical Rules of Morality - Theory of Moral Sentiments.]

Clearly, Adam Smith in the passage above concedes the need for Government regulation in order to insure justice need not be taken into the hands of the population’s individuals injured by the hand of a neighbor or a corporation.

I would caution against paraphrasing Adam Smith carelessly, especially without context. Adam Smith deals with very different topics in his writings and states other’s cases in detail before offering up his own conclusions regarding them.

When Adam Smith says: “But who presumes to know and define needs of the citizenry…”, he is clearly drawing the distinction between dictatorship or monarchism as opposed to democracy in which the citizens decide for themselves how to direct some capital in the form of tax revenues to meet those needs, which the market place cannot or will not.

Posted by: David R. Remer at May 10, 2008 2:53 AM
Comment #252587

There was a time when the worlds factories laid in ruin. Burned and bombed out. America became the worlds factory. Life was good. But as the rest of the world plays catch up and perhaps passes us, things could even get better.

Hate mongers who want to pander disaster to force political change they desire will not admit that we become even more prosperous and great….but “yes we can”.

Posted by: StephenL at May 10, 2008 9:30 AM
Comment #252598

David,

I will concede that OPEC is a cartel, but I have trouble seeing how the pharmaceutical industry and military industry are immune from competition. There are dozens of major companies and hundreds of minor players in the development of pharmaceuticals and military supplies. What am I missing? Isn’t it government regulation run wild that stifles competition and allows oligopolies? Legislative protection via the the unhealthy marriage between corporate lobbyists and lawmakers is very dangerous to the public. Some protectionist legislation does exists for the above industries, but my judgment is that competitiveness has only been constricted and not replaced “with mutual benefit and cooperation.”

Now let me give Adam Smith’s statement in the original context,

What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him. The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.

So my interpretation of this is that government economic planning is a bad idea because a government can’t presume to know what consumers want or need. To be clear, I have no problem with supply side economics. As you made clear with your example of GM, corporations which think they know better than their customers will cause their corporation to lose market share. Thus, the consumer and investors act as the correcting mechanism by withdrawing their capital. I don’t see an equivalent correcting mechanism when government planning and regulation run a muck.

Regulation is absolutely necessary to prevent monopolism and oligopolism which, as you say, constitutes a handful of persons dictating what the market shall have, in what amounts, and when. The natural end state of investor driven corporations is monopoly. You do realize that, right?

No, regulation is not necessary to prevent a monopoly. More often regulation allows these entities to arise. This is illustrated and explained here.

When Adam Smith says: “But who presumes to know and define needs of the citizenry…”…

Correction: I said that. Obviously, my sentiments are similar to his in at least one respect.

…he is clearly drawing the distinction between dictatorship or monarchism as opposed to democracy in which the citizens decide for themselves how to direct some capital in the form of tax revenues to meet those needs, which the market place cannot or will not.

In the full context of the quote above, I don’t believe he is speaking about directing tax revenues. Any confusion on this point is my fault. I didn’t provide the appropriate context for my original statement.

Admittedly, I have only an elementary knowledge of Adam Smith’s writings. I’m twenty-five. I have time to read up and understand the moral underpinnings of his economic theories. However, what I gather from the remainder of your post is that Adam Smith advocated for government regulation. Still, what kind of government regulation? I don’t think he intends the government to regulate the allocation of capital or grant some form of legal protection to a company. Instead, the government’s role is to regulate the interactions between individuals and/or corporations. Without further reading, I am unsure what he intends these regulations to cover beyond a legal framework for the honoring of contracts and the protection of life, liberty, and property.

Posted by: Mr. Haney at May 10, 2008 2:22 PM
Comment #252617

Mr Haney said: “There are dozens of major companies and hundreds of minor players in the development of pharmaceuticals and military supplies.”

This comment demonstrates you have an opinion but NO research on the matter. Try googling “military contracts no competitive”, and “monopoly pharmaceutical”. You will get ample education on the matter and your comments will be much better informed on this topic.

As for A. Smith, first read his very first sentence you quoted through the eyes of the late 1700’s America. “What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him.”

Here he is referring to an individual with something to invest in production, and a very, very, local marketplace. Not directly applicable to today’s corporations nor even, many small businesses who do not serve the local marketplace, but, a global marketplace in primarily services, not products. Be that as it may, government interference in business today is of two general kinds, prohibitory in order to protect the state or society (nuclear arms) or subsidiary, providing incentives to alter business choices to fulfill unmet demands of necessities for the well being of the nation’s people. In the area of subsidies, our government has a very mixed record of aiding society (stockpiling of immunological defenses for pandemic flue for example on the positive side), and causing havoc and enormous waste in the marketplace (ethanol subsidies to get votes in the HeartLand for example.)


Now, let’s take the second part of that first paragraph: “The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”

Here he refers to statesmen directing where individuals must direct their capital asset, time, energy, or money investment in other’s time and energy in the production of a service or product. Guess what? He is right, and in America our government does not engage in such direction in the for profit marketplace, save some prohibitions in the national or social interest like nuclear arms, addictive drugs, or protections of the public assets as in ANWR or Yellowstone Nat’l. Park, for example.

You said: “So my interpretation of this is that government economic planning is a bad idea because a government can’t presume to know what consumers want or need.”

It is not that a politician can’t anticipate the need of the marketplace as well as a business person. The folly of doing so is that politicians make decisions of a lasting nature, and business marketplaces are highly fluid and changing. In a business, if the management alters their business and the immediate feedback of that alteration is negative, that management can, without hindrance or incumbrance, reverse the decision. Our government is incapable by design, of making these kinds of timely decisions. Government’s Ethanol production mandate is having very negative consequences, but, the Congress is not now capable of reversing the decision without jeopardizing their reelections. Hence we are stuck with a bad decision over time, compounding its negative consequences, rather than reversing the decision that produced the unintended consequences.

Mitt Romney was a business person in government. His business acumen does not diminish just because he becomes a governor of Mass. But, his agility as a decision maker is gravely diminished as governor by the fact that his decisions must carry the weight the public opinion and the Congress along. Which means his ability to micromanage and adjust the decision’s parameters over time to fit the needs and consequences as a business person in the private sector can, are seriously compromised and diminished.

We are in perfect agreement on this, since you said: “I don’t see an equivalent correcting mechanism when government planning and regulation run a muck.”

But then you say: “No, regulation is not necessary to prevent a monopoly.” Which is utter nonsense. Reality demonstrates the free markets propensity toward monopoly all the time and every modern democracy on the face of the earth has anti-monopolistic regulations in place, to minimize monopolistic behavior.

Your comment is nonsensical too when saying: “More often regulation allows these entities to arise.”

That is a broad general statement which does not hold up. Regulation can promote or hinder monopolization, obviously. Just because Republicans favored monopolies, or just because Congress persons of all political parties barter with potential monopolistic interests for campaign support, does not in anyway imply that there is something inherent in the concept or action of regulation that promotes monopolies and oligopolies.

You said: “In the full context of the quote above, I don’t believe he is speaking about directing tax revenues. Any confusion on this point is my fault. I didn’t provide the appropriate context for my original statement.”

Hence my caution about paraphrasing Adam Smith. It can be done and quite well, but, not without being well versed in all his writings, since he builds new writings on the settled conclusions and demonstrations of previous writings.

And yes, the dialogue between us is now confused by mixing your quote with his. Right, in the actual quote of A. Smith, he is not speaking of taxation spending priorities. Government and private industry are two entirely different enterprises with entirely different methodologies and ends. Adam Smith was not capable of addressing today’s oligopolies established through the nick and nod consent of pro-corporate politicians to corporate lobbyists and pressure groups dealing in reelection options and support.

In his day, such tactics were far less sophisticated and complex, and simply deemed blackmail and bribery. Nor could he address the multi-national corporations whose entities take on quasi-governmental roles of civil servants, and upon whom our economy, citizens, and politicians grow ever more dependent upon for maintaining the status quo of their particular station on the financial ladder as net debtor or investor.

Adam Smith does however address avarice and greed which do injustice to the common good and welfare in Theory of Moral Sentiments, and thereby provides excellent commentary on the injustice of the incestuous relationship between politicians in ever greater need of money to remain in office, insider political marketplace trading, and professional lobbyists of corporations whose job it is to redirect governmental intent from its ends of national, state, and local welfare for all, toward the profit ends of the corporations which factor individual and social welfare losses as a result of their enterprise as nothing more than the cost of doing business and making a profit.

Adam Smith is NOT opposed to government regulation of industry in general. He is opposed to government management of the private sector, which, as he and I and you point out, it is incapable of doing efficiently. He is not opposed to regulation that prohibits private sector ends which undermine individual or social welfare of the citizens of the state. In fact, in Theory of Moral Sentiments, he clearly makes the argument that the people, through their democracy, have every right to restrict and defend against those who would reap profit or gains from injustice perpetrated upon others or who would violate the rights of others in the pursuit of profit.

Your understanding is then, very much on target when you say, “I don’t think he intends the government to regulate the allocation of capital or grant some form of legal protection to a company. Instead, the government’s role is to regulate the interactions between individuals and/or corporations.”

I would append to your quote: “toward the end of insuring justice and addressing injustices committed”. Regulating private interactions only becomes the government’s business when redress of injustice is presented to it for review, or, when action comes to light as having such egregious negative impact upon the common good and public welfare as to demand corrective action be taken (VIOXX and Ford’s Pinto).

Posted by: David R. Remer at May 11, 2008 3:35 AM
Comment #252623

David

I like Adam Smith. But as a proponent of free market I understand that Adam Smith does not have the last word on anything. That is the big difference between free market/pragmatists and virtually every other ideology.

If you were a Marxist and I could convince you that what you are doing is contradicted by Marxist theory, you would be chagrined. If you were a free market guy and I showed a contradiction with Adam Smith, the proper response is “so what?”

The general proposition is that individuals and firms make better decisions about those things that concern them than government bureaucrats and that when agreements are entered into voluntarily they increase the total good of all parties involved. The market mechanism coordinates and aggregates all these decisions and allows the system to tap into the intelligence, knowledge and innovation of all the people. Adam Smith did not understand this mechanism and used the “hidden hand” metaphor. We now have a better understanding of how this works, but we still cannot harness or closely manage it.

Within the general proposition, a free market guy can do whatever works and can keep on doing it until it doesn’t work or something else works better.

You agreed re the rigidity of government. That is why we need to keep government to a minimum and not ask it to micromanage our society. Government almost always accepts the invitation and in the extreme cases we get communism/fascism.

I think Mr. Haney is correct that in the long run monopoly cannot exist w/o government collusion or even mandate. If people are free to innovate, they will find ways around or substitutes for the products controlled by a monopoly, unless a government makes that impossible or very difficult. Government regulation limits competition in many industries. Some regulation is required, but we always have to keep in mind that we are playing with fire.

Anyway, I don’t think we disagree in the general directions. You have a little more faith in government than I do. I believe there are lots of things government really CANNOT do and we get trouble when we try to extend its reach.

Posted by: Jack at May 11, 2008 11:13 AM
Comment #252625

I think you are wrong, Jack. Monopolies can certainly exist without government collusion and/or mandate. The key for the monopoly is to not abuse it’s monopolistic market. If they don’t raise the price above minimum profit, don’t misuse their service to their customers, etc, then there is no motive for an alternative to crop up. Being a monoply in and of itself is not ‘bad’, it is what people do once they obtain a monopoly and the reasons for creating one in the first place that ends up being an issue.

However, the existence of a monoply, IMO, removes the ability to have a free market. How can a market be ‘free’ if the laws of supply and demand are hampered or violated because of the existence of a monopoly? That is one area of disagreement I have with the Libertarian Party that are calling for the end of anti-trust laws. Those laws need to be in place to prevent the elimination of the free market.

Posted by: Rhinehold at May 11, 2008 11:26 AM
Comment #252642

Jack said: “The general proposition is that individuals and firms make better decisions about those things that concern them than government bureaucrats and that when agreements are entered into voluntarily they increase the total good of all parties involved.”

As a general proposition this is true, up to the point that the free marketplace players take advantage of the nation, the society, or members of it, utilizing their vastly superior wealth and political power to protect their injustices from redress. Adam Smith was not, and is not, wrong in describing the concept of democracy as the people having the power and right to assert defense against the unjust practices of the marketplace.

Rhinehold is exactly correct. Oversight of the marketplace is necessary in order for the people to become aware of, and defend against, those in the marketplace who would injure or commit unjust acts against the nation, the society, and its individuals. And the power to regulate is required to defend against such injury or injustices.

I will go further and state that the people through their democracy have the power and right to provide for themselves that which the marketplace can’t or won’t, and that which the people agree is necessary for the fulfillment of the ends outlined in the Declaration of Independence.

Having said that, the conservative principle of government leaving alone the marketplace players in the absence of superordinate national or social need and in the absence of injurious or unjust acts by market place players, is an eminently sound principle. One which virtually all American philosophers and economists agree with from Adam Smith to Keynes and Friedman.

Where Democrats and Republicans so often err is in failing to recognize that market interference requires micro surveillance and micro management to insure government interference for good purposes does not result in unintended negative outcomes. And you and I both know that our government is not structured to accommodate that requirement for intervention.

But, this reality does not negate the people’s right to protect themselves from unjust and injurious market players. Therefore, in this less than perfect world, government should generally stay out of competition with private markets, while retaining and exercising authority to punish or prohibit injurious or unjust market player practices, like monopolization or deceptive practices. Nor does this less than perfect reality negate a democratic people’s right to provide themselves with services or products which the private marketplace can’t or won’t provide.

Thus, the government of the people has the right to provide health care accommodation when the private marketplace won’t for 45 million people, or roughly 18% of the nation’s population, and bankrupt another 18% with private health insurance premiums and lack of coverage, if that be the will of the majority of the people. To argue against the people’s will on such a matter is to argue against the democratic republic concept, something Republicans and Libertarians too often find themselves doing without realizing it.

Posted by: David R. Remer at May 11, 2008 8:27 PM
Comment #252647

David R Remer said,

This comment demonstrates you have an opinion but NO research on the matter. Try googling “military contracts no competitive”, and “monopoly pharmaceutical”. You will get ample education on the matter and your comments will be much better informed on this topic.

I am doing biopharmaceutical research on a grant from NIH, and I’m not informed about the pharma industry??? Please be careful about your presumptions about what I do or do not know.

The major complaint of the “pharmaceutical monopoly” discussion is that patent protection gives someone a “monopoly” for 20 years. Frankly, the premise is absurd. I understand the frustration of wanting the latest and greatest medication to be cheap and widely available. The problem is that you can’t claim the right to someone’s intellectual property for whatever price you wish to pay.

However, I agree that the FDA has a few unnecessary standards which make it more difficult to enter the pharmaceutical market. While I acknowledge your viewpoint that a oligopoly has been created, I disagree. I believe the regulations in place have yet to create an such a situation.

In regards to the military contractors, I can understand the occasional need for a no bid contract, but the high number of no bid contracts occurring today is unacceptable. Still, I don’t understand how no bid contracts are of mutual benefit to the companies not awarded the contract. Clearly, it may benefit companies and politicians for this to carry on, but I have trouble with the claim that entire military contractor industry is for “mutual benefit and cooperation” based on this evidence. It’s effectively guilt by participation, and I find the idea logically unpalatable.

Here he refers to statesmen directing where individuals must direct their capital asset, time, energy, or money investment in other’s time and energy in the production of a service or product. Guess what? He is right, and in America our government does not engage in such direction in the for profit marketplace, save some prohibitions in the national or social interest like nuclear arms, addictive drugs, or protections of the public assets as in ANWR or Yellowstone Nat’l. Park, for example.

David, let’s be clear. There is no must in that quotation. Our wonderful politicians thought there ought to be more ethanol produced, so they created a subsidy. This is a clear example of our government changing the direction of capital in the for profit marketplace. Subsidies change investor and consumer behavior, and this is precisely why they are so dangerous. As you agreed, government planning and regulation run a muck does not have an effective correcting mechanism. This is why I am against almost all subsidies. They have too many unintended consequences. In general if a company can’t survive without the government helping it, it should be allowed to go bankrupt.

Posted by: Mr. Haney at May 11, 2008 9:19 PM
Comment #252655

Rhinehold

I suppose if the monopoly is so benign and the product so unchanging a monopoly is possible. I would guess that something like salt or borax is probably at least local monopolies.

But you have to look at the need and not just the product. Take our favorite current example - gasoline. The competition for gas companies is not only other gas companies. The competition includes other forms of energy, bicycles, walking, conservation, telecommuting etc. It is impossible for a monopolist to cover all these bases w/o government limiting choices.

David

You know the government and the people are not the same thing. The government creates a constituency of its own and the government always represents the status quo, since nobody knows what the future can be and the government represents the current constituents.

As I have said many times, I understand that we need government and that it sometimes has to act decisively, but it should be small. And it has no mandate to act just because somebody is suffering… or thinks he is suffering. Government is by nature political. It tends to overreact and sometimes take the wrong action. What is popular is not always what is right.

I think the biggest problems for any government is sorting out responsibility. Decision making should be done by the people most familiar with the problem as close as possible to the problem being solved. This is almost never government. We also need to take into account the amount of involvement. A thousand people might have a vague, ill informed opinion about something, while the one guy actually working on the problem may have the right answer. All that points to the proper role of government as a general rule maker and a small player in average lives.

Finally, behavior matters. A good example is this mortgage mess. There are some “innocent victims” but there are a lot more active perpetrators, people who took out more house than they could afford and just are interested in avoiding their debts. Shocking as it sounds, there are a significant number of dishonest people. They get themselves in a extreme condition and then cry for help. It looks terrible for them teetering on the edge, but they often walked right out there themselves and if you save them this time they will do it again. … and again. The market, since it is impersonal, can discipline these sorts of people in ways not “compassionate government” can do. We need that.

Posted by: Jack at May 11, 2008 11:13 PM
Comment #252669

“Finally, behavior matters. A good example is this mortgage mess. There are some “innocent victims” but there are a lot more active perpetrators, people who took out more house than they could afford and just are interested in avoiding their debts. Shocking as it sounds, there are a significant number of dishonest people. They get themselves in a extreme condition and then cry for help. It looks terrible for them teetering on the edge, but they often walked right out there themselves and if you save them this time they will do it again. … and again.”

Jack is this a result of the conservative approach to life and governing? Stagnant wages and inflated housing costs worked together to turn good people into desperate people. Desperate people do desperate things. Hardly “perps” or dishonest, more realistically the majority are desperate and honest just trying to secure their future in a time of conservative rule in this country.
The mindset that people are bad and corporations are good is as conservative a thought as there is. The mindset that people need to be thrashed as we bail the moneyed class out is also as conservative a thought as there is. Perhaps its time to face these misconceptions and realize the problem is the mindset that caused the real predators to reign supreme in the marketplace.

Posted by: j2t2 at May 12, 2008 9:23 AM
Comment #252671

When hippies say, ” Communism man…it’s radical, every one is equal and happy…pass the doobie.” Most people say STFU, while communism looks good on paper, it is not practical, or it does not work in reality.

When I hear people tout the free market as the Holy Grail or the cure all for our economic woes, I can’t help but think they are being as foolish and naive as the hippies.

Here we have a continuum between an absolute free market and absolute government regulation.

Obviously we need moderation, and we probably fall somewhere in the middle anyway. We have been making rules and regulations for the past few centuries to improve the relationship between the government and the economy, not to benefit the government, or business, but to make this country better for the people.

Wiping the slate clean and piting business in a free for all is just as big of a mistake as taking all control of their production.

What is good for business is not always good for people. ie child labor, dumping waste into rivers, using cheap or toxic materials.

Posted by: Jason Ziegler at May 12, 2008 9:54 AM
Comment #252677

Jason

There is not now nor has there ever been anything like pure capitalism. The free market REQUIRES rule of law and reasonable regulation. W/.o the rule of law, a free market simply cannot function. Rule of law necessarily applies equally to everybody. When regulation begins to choose winners and losers among particular individuals or groups it becomes pernicious both to the market mechanism and to liberty.

The government can make whatever rules it wants. Those rules should be consistent and applicable to everybody.

When you say a middle way, you mean middle between what? Communism/fascism is a type of tyranny where the state determines the outcome of the individual. Lots of people get killed in these situations. A free market helps prevent the abuses of the state by limiting its power over the people. We don’t want to be in the middle between communism/fascism and free market. The free market already lies in the some middle ground between theoretical capitalism (which nobody really wants) and communism/fascism (which nobody should want).

J2t2

We should not bail out anybody if we don’t have to. Some “bailouts” are necessary, unfortunately, to maintain the general integrity of the system. This allows some bad actors to benefit, but it is a lot like putting out the fire in a neighbor’s house, even though he started it himself, so that it doesn’t burn down the whole neighborhood.

Some innocent people got in trouble with their mortgages, but most reasonably prudent people did not. If you bought a house last year with a mortgage you could afford back then, the price of your house, whether it went up or down, does not need affect you. Only if you made a speculative investment, or are taking equity out of your house, would you run into trouble.

Both individual people and corporations can be good or bad actors. What matters is behavior, not status. We need to discourage bad behaviors. People have a right to speculate, but the risk should be on them. We cannot socialize risk. It is bad for everybody, except the crooks.

Posted by: Jack at May 12, 2008 1:08 PM
Comment #252679

Jack said: “The free market REQUIRES rule of law and reasonable regulation.”

Then it is not a free market of which you speak, but a regulated market. This is what causes conservatives like Bush et. al. so much conflict bteween word and deed. They campaign on free markets and when they get power they DEregulate markets, causing all kinds of hell and monopolistic oligopolistic consequences. They believe their own words, even when they are entirely wrong for America.

Americans don’t want a free market where power can take advantage of consumers, injuring them and unjustly and deceptively dealing with them, without consequence or repercussions. Yet, that is what they got when Republicans obtained power in Congress and the White House in 2001.

You are right, intelligent, educated conservatives want free dealings in the marketplace circumscribed by regulations designed to insure fairness, competition, and full disclosure. Too many Republicans however erroneously and uneducatedly translate the word Free in free enterprise as without bounds or oversight or rules asserted from without the players in a contract.

This is one of those areas I harp on constantly regarding how America must invest in education, the kind of objective real world education that teaches that Free Enterprise does not mean Anything Goes enterprise, nor transactions which are not reviewed for fairness and full disclosure, or players who are immune from regulatory consequences for violating rules of fairness, competition, and full disclosure.

The kind of education that ALSO teaches that regulated enterprise does not mean government should be the first party to any and every private transaction. The kind of education that teaches that government is a very inefficient provider of goods and services, except where the private sector won’t or can’t provide the good or service needed by the nation’s people in a more efficient manner (military, policing, and now health care for example).

This is also why I insist that those who learn from the book, Wealth of Nations but, never read its foundational precursor, Theory of Moral Sentiments, will invariably screw up economics if given positions of power or advice over it. Wealth of Nations covers the flexibility and efficiencies of enterprise while Theory of Moral Sentiments covers the regulation and disciplined boundaries within which enterprise can conduct itself in a healthy and maximally productive fashion for all within a nation.

Teaching one without the other is like teaching a child how to pull a trigger on a firearm and believing that qualifies the child to carry a loaded weapon. Teaching one without the other is like teaching how to build a stone foundation for a building without teaching what kinds of soils and earths can support it. Doing so leads to stone foundations built in marshes and flood plains and thus result in the greatest of inefficiencies and catastrophic results, regardless of how meticulously the stones of the foundation are laid and cemented.

Your thinking on this topic is very appropriate and its direction conforms with Adam Smith’s seminal works. But, you are not the President’s economic advisor, and that is why Republicans are getting the boot on the economy.

And private education when all is said and done, only leads to a perpetuating of miseducation according to the boutique prejudices and biases of the parents seeking to perpetuate their own myths and miseducation in their children. Public education which helps insure against the perpetuating of outdated misinformation and misunderstanding of previous generations is essential to a democratic society’s growth and advancement. Some Islamic nations like Afghanistan or Amazonian tribal societies without public education are extreme examples of what happens with private at home education. They perpetuate a traditional values system but also inabilities to adapt and adjust to a changing and more informed external world about them.

If America is to advance socially, politically, and economically, its education system must become a hybrid of national educational standards for empirical education while retaining local control of traditional moral and ethics education. A great many Republicans fear this direction mightily. But when those fears are researched, they point back to ideas of human bondage and ownership of parents over their children which seeks to insulate their children from exposure to outside influences and differences in experience from those of the parents. That parochial view stands between America and the greater perfections of her ideals. The Grand Old Party continues to provide sanctuary for such parochial views along side the Libertarian Party and Constitution Party.

But the realities of this changing world with its vast sea of human species washing over the planet require accommodation between such parochial protective views and the overbearing demands of the present and future to innovate, change, and adapt to our own numbers upon the earth, if values of humanity and respect for our own kind are to prevail. This is the most dire and fundamental philosophical issue facing our species in the 21st century. We must answer it appropriately or lose our humanity and respect for members of our own species, which is a loss which al-Queda represents and manifests.

Posted by: David R. Remer at May 12, 2008 2:15 PM
Comment #252683

Jack said: “You know the government and the people are not the same thing.”

No. Now you are projecting your own views on me. I believe in this democratic republic which means the government and the people are the same. Republicans believe they aren’t, and further, that the people are sheep to be led in ANY direction politicians dictate. We have just experienced 8 years of this thinking, and guess what? The People are kicking Republican Ass from one end of this nation to the other.

Your party lost control of the Congress in 2006 because of your belief that the people and government are separate entities. And your party will lose the White House in November for the same reason. The people are the government, when their representatives fail the people, the people will find new and different representatives.

Government of, by, and for the people, apparently is viewed by you and many other Republicans as a Fairy Tale like Santa Clause or the tooth fairy. But, the real myth is the one so many Republicans hold that they know better than the people what government should be.

Posted by: David R. Remer at May 12, 2008 3:15 PM
Comment #252687

Mr. Haney replied to my request that he Google “monopoly pharmaceutical” with:

I am doing biopharmaceutical research on a grant from NIH, and I’m not informed about the pharma industry??? Please be careful about your presumptions about what I do or do not know.

I read your reply as a no, you didn’t google “monopoly pharmaceutical”. I understand. My education is in psychology and I understand the cognitive dissonance that asserts one need not become informed if such information would cause doubt in what one thinks one knows. Thank you for playing.

Your reply reminds me of the Staff Sergeant in a medical supply depot who said he doesn’t need to read newspapers about what’s going on in the world to know we don’t have it under our control yet. Sometimes the greatest ignorance comes from those who are immersed in the discipline and lost the big picture of what they are a part of.

Posted by: David R. Remer at May 12, 2008 4:04 PM
Comment #252688

“Mr. Haney replied to my request that he Google “monopoly pharmaceutical” with:

I am doing biopharmaceutical research on a grant from NIH, and I’m not informed about the pharma industry??? Please be careful about your presumptions about what I do or do not know.

I read your reply as a no, you didn’t google “monopoly pharmaceutical”. I understand. My education is in psychology and I understand the cognitive dissonance that asserts one need not become informed if such information would cause doubt in what one thinks one knows. Thank you for playing.”

Or maybe he is an expert in the field.

Posted by: BOHICA at May 12, 2008 4:30 PM
Comment #252689

Mr. Haney replied to my request that he Google “monopoly pharmaceutical” with:

I am doing biopharmaceutical research on a grant from NIH, and I’m not informed about the pharma industry??? Please be careful about your presumptions about what I do or do not know.

I read your reply as a no, you didn’t google “monopoly pharmaceutical”. I understand. My education is in psychology and I understand the cognitive dissonance that asserts one need not become informed if such information would cause doubt in what one thinks one knows. Thank you for playing.

Your reply reminds me of the Staff Sergeant in a medical supply depot who said he doesn’t need to read newspapers about what’s going on in the world to know we don’t have it under our control yet. Sometimes the greatest ignorance comes from those who are immersed in the discipline and lost the big picture of what they are a part of.

Posted by: David R. Remer at May 12, 2008 4:38 PM
Comment #252699

David Remer, your comment #252679 contains some of the scariest stuff I’ve read recently as pertains to education.

Thinking of parents as, “perpetuating of miseducation according to the boutique prejudices and biases of the parents seeking to perpetuate their own myths and miseducation in their children.” sounds like a thinly veiled slap at religious beliefs and love of God and country.

You write great prose but appear to lack any understanding of normal parental love and caring, casting aside the family in favor of governmental control over the minds and morals of our nations youth to achieve some kind of “global man”.

Combine your theory of education with genetic engineering and in a few generations we will all look, act, and think alike…mere robots with flesh, devoid of humanity.

Posted by: Jim M at May 12, 2008 7:15 PM
Comment #252710

“Some “bailouts” are necessary, unfortunately, to maintain the general integrity of the system. This allows some bad actors to benefit, but it is a lot like putting out the fire in a neighbor’s house, even though he started it himself, so that it doesn’t burn down the whole neighborhood.”

Selective bailing just doesnt sound right Jack. Why should the investors of the corporations who knew the risk and wanted to participate as a means of getting the rewards be bailed out when it was this investing frenzy by the very same corporations that caused the problem. This is a “reward the guilty and punishment of the innocent” approach that gives government a bad name. Deregulation and the free market failed us and is bailed out at our expense, yet the homeowner is to be thrown into the street, and forced to pay taxes to fund the guilty.

“Some innocent people got in trouble with their mortgages, but most reasonably prudent people did not. If you bought a house last year with a mortgage you could afford back then, the price of your house, whether it went up or down, does not need affect you. Only if you made a speculative investment, or are taking equity out of your house, would you run into trouble”

Jack it was much longer than a year and the speculators are not being bailed unless the proposed bail out plan has changed. If wages had not stagnated but had kept up with the housing prices this would not be an issue. People saw what they thought was an opportunity to get into their own home and had the rug snatched out from under them by mortgage brokers with the standard line ” your income will go up and you will be able to aford the increase in rates”. Most could not sell to get out from under the mortgage and couldnt afford to pay the mortgage after the 2 to 5% or more jump per year in interest rates. All they were trying to do is accomplish the American dream of homeownership. Yet we bail the unscrupulous investors and corporations out after fleecing these young people out of their money and home and destroying their credit. Your “only if you made a speculative investment” line is incorrect, that boat dont float.

Our economy would have tanked earlier without these consumers taking equity out of their homes to keep the economy going yet we want to throw them out of their homes and bail out the investment class and their corporate buddies so the economy wont tank. I just dont see the logic here Jack.

“What matters is behavior, not status.”
I agree Jack but unfortunatley status is being rewarded irregardless of behavior.

“We need to discourage bad behaviors.”
Couldnt agree more Jack in fact I believe the name for that is regulation. The problem seems to be this deregulation frenzy we have seen since the Reagan revolution. Deregulation has made a fool out of those beating the free market drum yet it continues to be espoused as the solution to the Countries problems, well that and lower taxes. Go figure

“People have a right to speculate, but the risk should be on them.”

I agree but then the investors and corporations have managed to threaten to take down the whole economy so we have given in to them. It seems you would give the real speculators a free ride in the free market yet penalize the young homeowner by associating the homeowner with the speculator tag. Some people bought multiple houses and these people are actually investors that should bear the brunt of the mistakes much like the corporations that bundled these mortgages and profitted form them. Yet we bail these corporations out.


“We cannot socialize risk. It is bad for everybody, except the crooks.”

Tell me , yet that is what has happened since the deregulation of the industry. In fact by now even the most ardent of free market supporters should have noticed the pattern of deregulation, boom and bust that threatens to ruin the economy each time it happens. You would think that one day they would question what is being deregulated and why wouldnt you?

Posted by: j2t2 at May 12, 2008 10:49 PM
Comment #252722

Jim M, interpret the facts how you will. But, miseducation and misinformation are transferred from generation to generation. There is overwhelming evidence for this in Middle Eastern nations and in the Appalachian Mountain peoples of the 1920’s and 30’s. These people were brought out of the 18th century into the 20th century from 1940 to the 1970’s with the advent of electricity provided by the Tennessee Valley Authority and the proliferation of quality public schools. The days of the Hatfield and McCoy wars over hunting turf, arranged marriages for dowries (sale of daughters), and clan superiority ended with public education conforming to more national standards.

If you want to read conspiracy into national educational standards to remove parents from their role as moral and spiritual guides for their children, go ahead. But, that of course, is not what is proposed at all. What is proposed is that the empirically observable and provably effective disciplines of math, science, literature, language, world and American history and current events studies be taught in non-partisan secular public schools for the benefit of the nation and its future. Which leaves moral and ethical teaching largely, but, not completely, to the parents and family. One cannot learn world and American history without being exposed to some moral and ethical issues and views which may not be shared by one or both parents who never graduated from high school. One cannot be exposed to math and science without acquiring some rational thinking skills which may be lacking in one of both parents at home.

But, let’s be realistic. If American children were all educated at home by their parents from the 17th century forward, the 20th century would have seen America compete for third world status with Afghanistan or Liberia or Colombia where home schooling were the norm right into the 20th century.

Public education made America the great leader nation it became. Now, a minority of Americans want to take us back to homeschooling and where parents can limit the growth and exposure of their children to only what the parent learned or was exposed to. That’s fine for Amazonian Rain Forest tribes wanting no part of the global international village. But, its a prescription for disaster for America in the 21st century if this minority movement championed by GW Bush and Ray Moore were to grow.

Home Schooling is not an inherently negative concept. It becomes so ONLY if home schoolers are free to design their own curricula which delete from student’s experience the disciplines necessary for the development of rational, critical, and evaluative thought processes and common fact and data bases readily available to the rest of society as integral components of communication and productive cooperation.

The separation of Sunday School and Public School and the public school’s focus on predominantly objective and empirical employment oriented and humanities education fostered the great American 20th century which led the world in almost every area of human enterprise.

The continued absence of separation of public education and religious education is what you find in Afghanistan, Pakistan, and Iran. I don’t think the contrast could be clearer or the point made more pointedly.

America has championed freedom of religious education along side but separate from secular education. It is a proven system that created the greatest nation on earth. It is not a system Americans should permit a minority to undo, because they feel less powerful in this society as a minority.

There is no question that far too many American public schools are in fact, worse experiences for some of their students than home schooling could ever be. But, that is a national issue that needs to be remedied beginning with a massive infusion of law enforcement within our schools that witness lawless behavior and criminal activity on an ongoing basis.

I empathize with and understand and even agree with many Home schooling proponents who feel compelled to home school out of sheer safety concerns for their children, let alone quality of education concerns. And there is no question, that the home schooling minority movement is a direct result of the failure of too many of our public schools to provide a safe and objective learning environment for students.

But, home schooling does not solve the problems in public schools. In fact, with the battle and competition for resources, it potentially reduces the resources needed to improve public schools. And in our society of diminishing real wages and both parents working, home schooling is not a national answer. Restoration of safe and objective oriented public schools is essential to our nation’s future.

And lastly, while Home Schooling is a natural reaction to failing public schools, it is being exploited by those who desire to deprive their children of the essential skills needed for their children to surpass their parents in knowledge, skills, and choices. These minority leaders in the Home Schooling crusade, are seeking power and wealth for themselves and cohorts by exploiting parent’s concerns over the failures in public schools and society at large in the areas of ethics and morality. They are selling religious home schooling as an answer for the nation and preparation of children to function in that nation.

That is a PT Barnum sham with very dangerous potential consequences for the society at large and the children indoctrinated to a society that does not, and will not exist. The Texas LDS community in the headlines is an example of where such a movement for homeschooling and segregation from society can lead. Or the Jim Jones community a few decades ago who left this nation to commit mass suicide and murder of innocent children in Africa.

The Humanities teach a secular ethics and morality that millions of American students are being short changed on in public schools. Our public education system is so entrenched in vocational education and chaos management of the school social system, that they no longer even expect or require students to read and comprehend works by Orwell, Dickens, Thoreau, or David McCullough (author of John Adams now an HBO historical mini-series). Our colleges and universities are fast tracking programs to vocational curricula cutting out the humanities electives that broaden one’s historical and contextual national and world knowledge and provide a basis for wisdom that comes from the synthesis of experience and knowledge of differing disciplines.

In short, there is no greater investment the American people can make in their future than a safe, secure, and demanding public secular education system which treads not upon, nor diminishes our separate and equally valuable religious education system in our homes, synagogues, temples, and churches.

And to anticipate the dialogue, the way to teach evolution in public schools without treading upon religious education is actually quite simple. The public school acknowledges there is not one way of viewing and explaining the events in the world. Evolution is a tool and way of viewing the life sciences which affords predictability and verifiability in the study of life sciences. It is useful in understanding biological systems and animal and plant cultivation for food groups and many other practical applications. Evolution does not seek to explain the origin of the universe nor original spark of life within it.

That’s it. Simple, straight forward, and for all intents and purposes, not competitive with religious education. Let’s get on with it.

Posted by: David R. Remer at May 13, 2008 3:42 AM
Comment #252726

David,
I still don’t understand why I should sift through all the garbage in a Google search to find reliable resources. You seem to have found some resources to inform your views. Please provide me with a few of your reliable resources, I will gladly look through them. This will aid the clarity of our discussion.

That said, your last post implies that I chose to remain blissfully ignorant. I don’t appreciate this characterization in the least. I did Google “pharmaceutical monopoly”. From perusing through a few links, my response to the arguments therein was that you can’t disregard someone’s rights to their intellectual property. You must uphold the rule of law. Now are the laws just? I think we are in agreement that some of these laws are unjust because they allow too much corporate protectionism. Furthermore, we can debate what to call the results of protectionist legislation/regulation, but it adds nothing to discussion about what needs to be changed.

In my search, I found an interesting economic discussion of patents. Chapter 9 deals specifically with the pharmaceutical industry. The authors raise the question of whether companies should be able to patent individual chemical compounds. Overall, the question they ask appears to be, what should patent protection cover? I think this is an interesting and important question to ask and answer before entering a discussion of the changes to be made in pharmaceutical industry regulations.

Posted by: Mr. Haney at May 13, 2008 4:32 AM
Comment #252733

David

David, you believe that even less than I do. For example, George Bush was elected in a fair election by a majority of the voters. How closely does he represent you? Maybe the people changed their minds, but how closely did he represent you in January 2004, when a majority of the voters backed him?

This point to the fundamental reason why the people and the government are not the same. Even the most popular presidents, such as Ronald Reagan, do not have more than even 60% of the people on their side. Nobody since then has done nearly as well. No Democrat has even won more than 50% of the vote since Jimmy Carter in 1976.


Even in the best scenario, the government represents the people, but it is not the same as the people. The government is made up of individuals, each with his/her own ideas. In addition, to make it work they have to hire millions of civil servants, who also have their own personalities and as a group differ from the average American in many ways (most are college graduates and all have secure jobs, for example).

Even if you assume people in government are perfect, the lack the information needed to make detailed decisions about all aspects of society. That is why we need to limit their power and aspirations.

Like most Republicans, I am very certain that the government does NOT know best. That is why I want to limit it. Belief in government omniscience is a liberal failing.

Government by and for the people is what we indeed have in the U.S. That does not mean that all, or even most of the people will ever be a happy and it argues for a limited government that allows society more choices.

Consider the current situation. A majority of the people are against George Bush, but no majority can decide who they want instead.

J2t2

I disagreed with the bail out of Bear Sterns. It has not been widely repeated. What we should do – and are doing – is add liquidity to the system. This will help some people who don’t “deserve it” but it is not a specific help.

I am a prudent guy. I own one car for a family of five drivers. I own a home which is much smaller than I “can afford”. I have been making my mortgage payment every month on the same home for more than ten years and not pissing away my money, even though people told me I could afford to do more. During that same period, many people I know were living large. They leveraged their home to provide a more fun lifestyle.

I don’t feel that it is just that us prudent guys bail out the spendthrifts. I am sorry if some people are too stupid to understand the terms of a mortgage. You cannot cure stupid but maybe the education they get now will help them avoid the mistakes in the future.

Those who made loans to bad debtors should also lose their investment. A plague on all their houses. The government’s interest in this mess is to help insure that bad apples don’t spoil the whole bunch or pull down the whole economy. Bailing out anybody is beyond its mandate.

Posted by: Jack at May 13, 2008 9:33 AM
Comment #252747

Jack I to disagreed with the bail out of Bear Stearns. While it may not happen regularly, at $30 bil once is to much. Im against it because it would have showed all of us what deregualtion and free market as practiced currently is about.

Jack most of us are prudent, we do need to thank those that arent because they are the ones that keep the economy running. If it was left to us prudent types it would be in bad shape. Thats why they advertise to the young so much, us older guys are generally more prudent. It takes a certain type of people to make this economy that is based on growth and consuming grow Jack. Damn them if you will, but where would we be without them?

I agree it is not fair that the prudents bail out the spendthrifts however if we are to bail out the predators then certainly we can include the spendthrifts. I agree there is no cure for stupid but who is really stupid here. Those youngsters seeking to own their own home? The investors in the corporations that bundled, bought and traded these loans? All of us for allowing the deregulation and free market that caused this financial crisis? The government that bailed to avert a political and financial crisis? The prudents that beat the free market and deregualtion drum? The corporate lobbiest that wrote the deregulation bills that allowed this to happen? Stupid is as stupid does according to Mrs. Gump. How mant times do we need to have this deregulate-boom-bust cycle before its shame on all of us Jack?

Not only am I in favor of having the credit of any of the people caught in this scam repaired, Im in favor of all of us bailing out the homeowners caught up in this debacle, and any further deregulate-boom-bust scams we continue to fall for Jack. Maybe when it gets painful enough we will open our eyes and see the free market/deregulation scam for what it is. Brings to mind that saying “first time shame on you, secong time shame on me” doesnt it?

Posted by: j2t2 at May 13, 2008 2:02 PM
Comment #252757

j2t2, be sure to convey your bail-out, feel-good strategy to the Obamawan as he is running out of “changes”.

I wonder how many of these home-owners are already at the “shame on me” position. As I recall it was the crazy liberals who demanded easier access to home mortgages and deregulation. What’s this, another “chicken” come home to roost?

Posted by: Jim M at May 13, 2008 5:18 PM
Comment #252765

Jim M
you tell me Jim, how many homeowners are already at the shame on me position?

Of course Jim isnt everything the fault of the crazy liberals in your mind? Im sure these crazy deregulation loving, free market admiring liberals you speak of devised the bundling of the securities and talked those innocent repub anti-free market deregualtors in the late 90’s to get rid of Glass-Steagall. Then they fooled them not so sharp repub anti-deregulators into pushing for W and the 109th to cut taxes so more people could own homes. Who do you think took the credit for all those people being able to buy homes back in ‘04?

http://www.msnbc.msn.com/id/4568925/

Should you ever get a grip on reality Jim M try looking at the ever so slim possibility that it had something to do with to much deregulation exuberence by the repubs and the Phil Gramm types. Remember the S&L thing of the ‘80’s?
Just once consider that it could be that there is a reason for regulations that were enacted after the great depression. Just consider it, one baby step at a time, just consider it.

Posted by: j2t2 at May 13, 2008 6:34 PM
Comment #252776

j2t2, be sure to convey your bail-out, feel-good strategy to the Obamawan as he is running out of “changes”.

Jim M how do you figure its a feel good strategy? The taxpayer will be on the hook for the cost of the bailout. Seems to me thats a starve the beast repub/conservative strategy not a liberal strategy.
I look at it as more of a education to all those that think the free market doesnt cost and that deregulation without restraint is the best government we can expect. As a conservative you should recognize this core principle of conservatism-accepting responsibility for your deeds.

You will step up to the plate when its time to raise taxes to cover the costs associated with those failed ideologies you and your fellow conservatives hold so dear wont you?

I find it hard to believe that you would consider it a bad use of tax dollars to bail out those corporations that caused this problem yet leave those that suffered the consequences of this deregulation out on a limb. Jim M. Certainly you dont buy into the arguement that saving bear sterns was required to save the economy yet bailing out the biggest contributers to the consumer economy isnt required to save the economy.

When you think about it Jim M its a short term answer to the problem, which as we know is a very well known conservative principle. Seems to go right along with the deregulation that allowed the short term gains in home ownership and long term credit problem for those that lost their homes.

You sure I shouldnt give this strategy to the “4 more of the same” candidate John McSame?

Posted by: j2t2 at May 13, 2008 8:47 PM
Comment #252792

J2t2

There is a big difference between taking risks (good) and being stupid. I invest in some risky things and I lose money on some of those investments, but they are ones I can afford and I suffer the consequences. If you are making sound risk decisions, you will lose money sometimes, but make money more often. If you are losing money all the time, you are not doing well with this risk thing.

We can bless the risk takers. THEY take risk. I want they to get the rewards when they succeed and I want them to pay the price when they fail.

I also don’t think we are talking about “youngsters” trying to have their own homes. I know some youngsters who have homes and are paying their mortgages and some specuators who are not.

If you are failing to pay your mortgage, you either were unusually unlucky, stupid, or dishonest. We can be generous and assume that many were just unusually unlucky, but that still is no justification for a bailout.

Re deregulation - The market mechanism manages to stay a couple steps ahead of government regulators. Lenders lent money to bad credit risks. Many of the same people who complain now that borrowers were victimized were ones demanding that lenders invest money in decaying neighborhoods full of bad risks.

If you regulate, what do you want to do? Do you want to raise the standards for getting a loan – i.e. make it impossible for many poor and poor credit risk individuals to get loans?

How would you have avoided this “debacle” Homeowners were not unhappy when they values of their homes was going up TOO fast. Would you have prohibited the sales, maybe have price controls on home prices? Remember also that the rise in real estate was a worldwide trend. It didn’t start in the U.S. and it didn’t end here. It happened in countries with various regulation systems. It is not a failure of OUR regulation that prices went up.

Re repairing the credit of the defaulters – This is exactly the problem. You should not repair their credit because they are bad risks. Lend them money again and they will default in larger than normal numbers. The problem was giving them loans in the first place. Your regulations would have prevented that, maybe.

Posted by: Jack at May 13, 2008 11:55 PM
Comment #252798

There is a big difference between taking risks (good) and being stupid.

Jack I thought we already agreed that Bear Sterns should have not been bailed, economy be damned.

“I also don’t think we are talking about “youngsters” trying to have their own homes. I know some youngsters who have homes and are paying their mortgages and some specuators who are not.”

Funny how that works I know some youngsters who had homes and lost them along with the speculators. Besides whether they are 20 or 40 what is the difference Jack they are still losing their home.

“If you are failing to pay your mortgage, you either were unusually unlucky, stupid, or dishonest. We can be generous and assume that many were just unusually unlucky, but that still is no justification for a bailout.”

So you think that’s the only three choicee Jack, unusually unlucky as opposed to what usually unlucky or just plain unlucky? Christ you would think they were gaming in the casino not just trying to but a house that is way to expensive. If the feds didnt decide to bail out those that caused the problem then I would agree Jack but this bail the aristocracy approach doesnt work either.

“Re deregulation - The market mechanism manages to stay a couple steps ahead of government regulators.”

Especially when there are no regulations right?

http://forestpolicy.typepad.com/economics/2008/04/deregulation-go.html

“Lenders lent money to bad credit risks. Many of the same people who complain now that borrowers were victimized were ones demanding that lenders invest money in decaying neighborhoods full of bad risks.”

So far this is in the right wing persecution of the innocent category do you have anything to back it up? Did these lenders then sell these loans bundled to other investors? Someone took the money and ran. Was it legal for them to do so? Was it because Glasss-Steagall was deregulated allowing banks and others to do this kind of scam? Do you really think our economy is better off with this kind of activity JAck as opposed to people being productive and earning the money legitimately?

“Re repairing the credit of the defaulters – This is exactly the problem. You should not repair their credit because they are bad risks.”

Then take their credit rating back to pre foreclosure. Whats the problem. If you bail the aristocracy, bail the rest of we the people.

Posted by: j2t2 at May 14, 2008 12:51 AM
Comment #252812

j2t2

You are a home owner. You have a mortgage. The whole industry is full of regulations and rules. There is no shortage. I am not advocating no regulation. When you buy a property, there are all sorts of laws that protect you, demand full disclosure, give you time to back out etc. If after coming through all that, you still make a stupid choice, it is well … stupid.

That NO regulation thing is a red herring.

There is no aristocracy in the U.S. BTW, but even if you stretch that term to include “the rich” (BTW - how much do you need to make to be included), who got bailed out? One firm and investors in that one firm lost almost all their money. Even Chuck Schumer thought that.

We have the responsibity to protect the solvency of the system. SOmetimes that means helping some who we would sooner let fail. I don’t like it, but let’s be realistic.

As for the credit rating, it depends why they got forclosed. Why should you wipe the slate clean and let them do it again?

It is sad when you lose your home. Lots of things are sad. We already have in place a myriad of ways to help home owners. We cannot guarentee 100% of anything.

Posted by: Jack at May 14, 2008 8:15 AM
Comment #252813

“That NO regulation thing is a red herring.”

And that Jack is mis direction. Ask yourself this why did we have to bail the system out now and not 10 years ago? What has changed to cause this other than the deregulation of the banking industry. Glass Steagall.

“We have the responsibility to protect the solvency of the system. Sometimes that means helping some who we would sooner let fail. I don’t like it, but let’s be realistic.”

And of course Jack you are right. With that responsibility we also have the responsibility to cure the patient so as to prevent the same sickness from becoming a reoccurring event. Unfortunately we just cant seem to do that unless we are subjected to a great and obvious pain first. That is the only reason I propose to bail everyone equally. When it hurts enough we may find that this deregulation craze needs to be reigned in. The attack on the Glass Steagall act is just 1 example of the bad judgement exercised, the S&L scandel was another. When do we say enough?

Posted by: j2t2 at May 14, 2008 8:59 AM
Comment #252814

J2t2


Yes - bail out everyone equally - or NOT. We should strengthen the general system.

No amount of regulation will avoid all trouble and all regulation has costs.

The housing bubble was a big shock to the system, but please recall that it was NOT only an American bubble. It started overseas and began to burst there too. We think it is an American only problem because (1) we don’t know much re the rest of the world and (2) the U.S. is so big an economy that it makes a much bigger difference. Various economies with lots of regulation are having similar busts.

Re the S&L problem, big deal. We got through that one too. We cannot avoid all troubles. Or we can probably avoid some busts at the cost of avoiding all booms.

Posted by: Jack at May 14, 2008 9:30 AM
Comment #252819

“Re the S&L problem, big deal. We got through that one too. We cannot avoid all troubles. Or we can probably avoid some busts at the cost of avoiding all booms.”

Jack we got thru lots of things on the backs of the taxpayers. Your deregulation uber alles attitude has a financial impact on us prudent guys, yet as long as it fits your ideology higher taxes to bail out the aristocracy are ok? Im not sure thats all that prudent my friend. Myself I would rather have my taxes dollars going to improve our infrastructure or to secure our blessings rather than being used to bail out the predators of this Country when their scams go awry. Thats just me though.

Posted by: j2t2 at May 14, 2008 10:04 AM
Comment #252832

I found the following article refreshing. Perhaps you will also.

April 4, 2008
Economic Pessimism: No Excuse for Protectionism
by Anthony B. Kim
WebMemo #1883

In his April 2 testimony before the Congressional Joint Economic Committee, Federal Reserve Chairman Ben Bernanke said that “it now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly.”[1] Adding to this guarded assessment of the U.S. economy, he cautioned that a recession is “a technical term”[2] determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), which has not yet declared a recession.[3]

Indeed, 2008 began with intense speculation and predictions that the U.S. economy either is in or would slip into a deep recession. Worse, the ongoing economic pessimism has been further fueled by the exaggeratedly negative news and rhetoric that is typical in an election year.

In a time of economic uncertainty, responsible policymakers should be realistic rather than pessimistic about the future. Especially in this presidential election year, the challenge to Washington is not to get trapped in attempts at quick fixes of short-term problems at the risk of eroding the economic freedom that has been the backbone of America’s prosperity. Congress must take a long-term view focused on strengthening economic fundamentals. Pessimism is not an excuse for burdensome regulation or protectionism.

What Is the State of the U.S. Economy?

America’s $13 trillion economy is certainly going through challenging times. After expanding for “the sixth consecutive year in 2007,”[4] economic activities recently have slowed due to major corrections in housing and financial markets. This is not pleasant, but it should be properly viewed as a normal and reasonable correction in the aftermath of an unprecedented economic boom.

In other words, the U.S. economy is going through the slowing part of a business cycle. This cycle is a key characteristic of our free-market system—the economic ebb and flow that defines dynamic entrepreneurship—as the growth rate fluctuates above and below its long-term trend. The cycle includes periods of relatively rapid growth of output and periods of relative stagnation or decline. True, an economic slowdown is not something anyone would welcome, but no country has yet perfected the art of perpetually high economic growth. Right now, the economy seems to be regrouping rather than advancing.

The generally accepted authority for determining when U.S. recessions begin and end is the Business Cycle Dating Committee of the NBER, a nonprofit group based in Cambridge, Massachusetts, that has 600 academic economists.[5] Interestingly, periods of recession seem to be getting shorter and more moderate in modern economic times. According to the NBER, which has not described the current economic situation as a recession, recessions have become shorter and less frequent. Since 1945, recessions have averaged just 10 months. The last two recessions were among the shortest and mildest on record; both the 1990-1991 and the 2001 recessions lasted just eight months.[6]

Throughout modern economic history, the multifaceted and dynamic U.S. economy has been on a path of continual change and adaptation owing to endogenous as well as exogenous factors, but trending always toward a higher and better state. Economist Joseph Schumpeter, the father of business cycles theory and “creative destruction,” once elaborated, “It is by no means farfetched or paradoxical to say that ‘progress’ unstabilizes the economic world, or that it is by virtue of its mechanism a cyclical process.”[7]

Still, no matter how “creative” the process is, the current slowdown is unpleasant and destabilizing for some economic activities. At the same time, however, the current slowdown is helping the market mechanism work to revalue inflated assets in the housing and financial markets on the basis of real economic fundamentals.

Pessimism Driving Protectionism: A Perilous Recipe for Our Economy

A key driver of our economic prosperity is a high level of flexibility and resilience founded on economic freedom. This has been continuously protected by keeping levels of regulation and government intervention low while emphasizing great transparency and strongly protected property rights.

Yet the truth is that economic freedom, like other freedoms, is always vulnerable. History tells us that this is never more so than when politicians are running for office and espouse populist rhetoric, playing to people’s fears and calling for more government interventions that promise a quick fix to whatever is deemed faulty in a complex economy.

In 2008, voters deserve an honest debate about economic policies such as free trade, not populist bromides.[8] True, most voters are somewhat uneasy about the current economic slowdown. However, it may be a gross mistake to assume that they are comforted by alarmism and calls for more government action. According to a poll by Democracy Corps, more than 55 percent of 1,017 respondents agreed that “government makes it harder for people to get ahead in life.”[9] The same study reveals that 54 percent of respondents perceived government as a “hindrance to economic growth.”[10] Congress should not misjudge that, due to the current anxieties over economic slowdown, Americans would automatically support congressional actions for more direct government interventions.

More important, Congress should not use economic pessimism as an excuse for more protectionism. Some politicians argue that the benefits of today’s free trade system go unfairly and primarily to low-wage countries, which take jobs away from Americans. Such arguments are not supported by the facts. President Ronald Reagan once eloquently reminded Americans of this truth:

A creative, competitive America is the answer to a changing world, not trade wars that would close doors, create greater barriers, and destroy millions of jobs. We should always remember: Protectionism is destructionism.[11]

America’s economy, over the past few decades, has proved that openness coupled with flexibility makes the economic pie much bigger and that the benefits can be widely shared. Over the past 10 years, open trade has boosted job growth by more than 13 percent and has helped to raise U.S. GDP by nearly 40 percent.[12]

As Charts 1 and 2 demonstrate, trade has been the backbone of the U.S. economy, contributing almost 30 percent of GDP in 2007. The benefits go not only to workers and entrepreneurs in export industries, but also to consumers of imports. Free trade has delivered a greater choice of goods for people in all 50 states—everything from food and furniture to computers and cars—at lower prices. America is now the top exporter of services, consistently recording service trade surpluses since 1970. U.S. service industries account for more than 75 percent of U.S. private-sector GDP, creating 80.2 percent of U.S. private-sector employment.[13] Reflecting America’s strength and flexibility, the service trade surplus has increased exponentially in recent decades and reached more than $100 billion in 2007, as Chart 2 indicates.

Unfortunately, this powerful force of dynamic economic expansion has been under growingly exaggerated doubts, suspected as being the root cause of every economic ill in recent years. But, according to a recent study conducted by the President’s Council of Economic Advisers, no more than 3 percent of all job disruptions may stem from international trade, while 97 percent of job displacement is due to other factors such as productivity increases, new technologies, and innovation.[14]

Despite the fact that international trade, reinforced by the free trade agreements that have been implemented since 2001, has been one of the biggest drivers of economic growth,[15] Congress has all but shut down the trade agenda in recent months. But protectionist approaches or isolationism have been tried throughout history and have failed to create new and better jobs of the future. Protectionism might shelter old and outdated jobs, but it will not provide effective protection for those negatively affected by the business cycle or gains in productivity, or for those few whose jobs are lost to trade.

Conclusion

Without overreacting to the current economic slowdown, putting forward a long-term policy plan that strengthens economic fundamentals would calm fears among entrepreneurs and restore confidence. The temptation to fuel economic pessimism during an election year should be resisted, and the false virtues of protectionism should be rebuffed. As the economy goes through the downside of the current business cycle, Congress should remember that protectionism never protects. It is economic freedom that will promote new jobs and greater prosperity.

Anthony B. Kim is a Policy Analyst in the Center for International Trade and Economics at The Heritage Foundation.

Posted by: Jim M at May 14, 2008 12:54 PM
Comment #252852

Jim M, Anthony B. Kim is a paid hack apologist for the private sector whose greed and purchase of politicians created the entirely unnecessary and avoidable mortgage meltdown, now followed by credit card bubble usury industry with rates as high as 38% on revolving debt.

This was NOT a normal inevitable economic cycle correction. This economic boom - trough was entirely avoidable and should have been avoided by government oversight and regulation of the industries that brought it about. But, Republicans were in charge of government, so that was not to be. The private sector players that made this happen walked away super wealthy and the rest of Americans are left to pick up the pieces and bear the losses. Republican led government failed in one of their most fundamental economic roles, oversight and regulation to insure fair and transparent financial transactions and contractual obligations.

When government politicians depend on the wealthy special private sector lobbyists and campaign donors for policy direction advice and reelection, America’s consumers, workers, and future are put in jeopardy in ways just like this mortgage fiasco and usury credit bubble inflating.

Posted by: David R. Remer at May 14, 2008 6:53 PM
Comment #252853

Jack said: “David, you believe that even less than I do. For example, George Bush was elected in a fair election by a majority of the voters.”

No, he was appointed by the Supreme Court. The fact was, we did not have the infrastructure in Florida to provide a fair, transparent, and accountable election.

Jack said: “Like most Republicans, I am very certain that the government does NOT know best.”

True. You do seem to be very certain of that. Of course if the government does not know best what it is charged to do, then anarchy is the only logical alternative as in - no government or token government that provides legal cover for business and corporate monopolism, oligopolism, and predation upon the consuming public. Yes, I can see that you believe this in your comments.


“That is why I want to limit it. Belief in government omniscience is a liberal failing.”

Liberals don’t believe in government omniscience. They do believe government employees can access data and information needed to shape policy toward a more perfect union, justice, and liberty which does not tread on the liberty of others to the extent possible, in ways individual citizens cannot. Hence, liberals are the anti-anarchists.

The problem with liberals is they have lost sight of their own obligation to vote against THEIR politician’s reelections when government fails to live up to their expectations.

Liberals do believe education is the source for voters upholding their responsibility. Republicans, on the other hand, demonstrably undercut education at every opportunity and vote. John McCain just helped prevent the Senate’s expansion of the GI Bill for our veterans. Bush’s appointee Gates says veterans and GI’s should NOT be granted too much educational opportunity as that would undermine retention by the military of enlistments.

Just doesn’t get any clearer than this, Jack. Actions speak volumes.


Posted by: David R. Remer at May 14, 2008 7:13 PM
Comment #252855

Mr. Haney, again you dodge the empirical evidence available by Googling the facts and data and expert opinion from outside the Industry. I provided you the exact words to google. The volume of evidence there is enormous.

Please provide me with the links or exact google words to evidence supporting your position that pharmaceutical industry does not act in oligopolistic ways. The mere fact that it shaped the Medicare Rx drug bill to eliminate competitive bidding for their products, contrary to every anti-monopolistic legal paradigm, speaks volumes. The fact that Republicans allowed this is part of why 3 Republicans in staunch Republican districts in La., Miss., and Ill., have lost what were viewed as shoe in special elections, to Democrats.

Republicans have violated nearly every principle of what good federal government was designed by our Constitution and laws to be. The Pharmaceutical Industry played its part supporting the GOP in return for monopolistic power over government policy.

It is unjust for the Pharma industry to sell the same drug overseas at discount to what they sell the drug to American taxpayers, who pay for the industry’s subsidies state and federal. How could that not be plain as the nose on my face?

Posted by: David R. Remer at May 14, 2008 7:25 PM
Comment #252856

David Remer’s answer to those he disagrees with, even with proof, is to call them hacks. You will find more truth at www.heritage.com than any liberal website I know of.

In fact, they are giving away free copies of both The Declaration of Independence and The Constitution of the United States in an effort to inform citizens of our birthright so they won’t believe the BS from the left.

“and liberty which does not tread on the liberty of others to the extent possible” Posted by: David R. Remer at May 14, 2008 07:13 PM

You revealed a lot of your twisted politics here David. What a contradictory statement. Only a liberal would say liberty should not be trampled more than necessary. And liberals want to appoint themselves as arbitrators of what is necessary…right?

Posted by: Jim M at May 14, 2008 7:33 PM
Comment #252858

“You will find more truth at www.heritage.com than any liberal website I know of.”

Jim M when I go there I see a local Michigan newspaper.

Posted by: j2t2 at May 14, 2008 8:56 PM
Comment #252869

“And liberals want to appoint themselves as arbitrators of what is necessary…right?”

Probably no more than conservatives want to appoint themselves arbitrators of what is patriotic or …….

Posted by: Rocky at May 14, 2008 11:58 PM
Comment #252877

An interesting article explains a lot:

http://allspinzone.com/wp/2008/05/15/the-gop-brand-is-broken-republicans-say-not-me/

Posted by: googlumpus at May 15, 2008 8:57 AM
Comment #252893

“You will find more truth at www.heritage.com than any liberal website I know of.”

Jim M when I go there I see a local Michigan newspaper.
Posted by: j2t2 at May 14, 2008 08:56 PM

Sorry about that j2t2, it’s www.hertitage.org.

Posted by: Jim M at May 15, 2008 12:42 PM
Comment #252895

j2t2 said, “Jim M how do you figure its a feel good strategy? The taxpayer will be on the hook for the cost of the bailout.

Isn’t it always the case with liberal “feel-good” strategies, it always cost the taxpayer for them to feel good? And, bashing America seems to produce feelings of euphoria in some libs as well as witness the Rev’s. Wright, Farakan, Jessie J., big Al Sharpton and others.

Posted by: Jim M at May 15, 2008 12:49 PM
Comment #252900

“An interesting article explains a lot:”

http://allspinzone.com/wp/2008/05/15/the-gop-brand-is-broken-republicans-say-not-me/
Posted by: googlumpus at May 15, 2008 08:57 AM

Thanks googlumpus for the link. In many ways Reynolds is absolutely correct. The conservative rout in congress in 1994, based upon the Contract with America, has frittered away their principles and fiscal restraint in trying to match the Dems.

How very interesting that conservative Dems are winning traditional Republican seats. Interesting, but not unexpected. The vast majority of Americans are middle to right in wanting fiscal responsibility and will vote for the candidate, regardless of party, who makes the most convincing case that he or she will adhere to promises made.

I don’t have an (R), or (D) behind my name, but rather a large (C) and will vote for the candidate who represents best my views. In the past I have voted both Democrat and Republican and will continue to do so.

Where Reynolds goes astray is talking about Hannity and Limbaugh. Both of these men are very conservative and hail a new Gingrich-style Contract With America as the only salvation for the Republican Party this cycle. Obviously, Reynolds has not listened to conservative talk radio and instead just parrots what MoveOn.org and others say.

I will admit that I am not thrilled about McCain being the Candidate of the Republican Party. He is certainly not a conservative. Had the democrats came up with a better candidate I would have considered voting for him or her. As it is, neither Obama (especially) or Clinton even pretend to be conservative advocating huge new government spending.

I usually give generously to the RNC, however this year I have not given a dime. I have rather, determined those running for national office who are conservative, and given to their individual campaigns.

Posted by: Jim M at May 15, 2008 1:19 PM
Comment #252904

David

No candidate won a majority (50%+) of the vote in the elections of 1992, 1996 or 2000. Bush was a majority in 2004. No matter what you think of the 2000 election, a majority voted for him in 2004. No Democrat since Jimmy Carter in 1976 has was more than 50% of the vote.

And what makes you think government officials can access better data than the private sector or make better decisions? Government is very good at doing things in areas with slow and predictable change. That is where bureaucracies excel. It is much less good at working with change.

And government almost never anymore has access to the most complete or up to date information, unless they just use their online subscriptions to “WSJ” or “the Economist”. The days when government held all the best information cards ended around 1990.

Your confidence is touching. Most government employees are reasonably dedicated to their jobs. Some of them do the dangerous jobs their country requires. Most are college educated and diligent. But they are not super men and women and the bureaucratic system does not reward innovative thinking. Government does many things very well, but the economy is too complicated for them to manage.

BTW – if you give control of the government to career bureaucrats you put it into the hands of people just like me. I know my own limitations. Don’t lean to heavily on that.

Posted by: Jack at May 15, 2008 1:41 PM
Comment #252915

“Isn’t it always the case with liberal “feel-good” strategies, it always cost the taxpayer for them to feel good? And, bashing America seems to produce feelings of euphoria in some libs as well as witness the Rev’s. Wright, Farakan, Jessie J., big Al Sharpton and others.”

Why is it you dont seem to mind the conservative feel good srategy of bailing out and assuming the risks for the private sector corporations that caused this mess Jim M? $30bil of borrowed money keeps the economy afloat I guess. But then if it costs $30 bil to prop up your failed fiscal ideologies its ok to feel that kind of good huh?

Jim M you do realize there is a difference between bashing America and bashing failed conservative economic policies dont you? Thats not America my friend that the dirty tricks played on America by the cons and the repubs. Think of Bush Delay Cunningham, Abrahamoff Noe. Not to mention the white preachers who have been bashing America like Falwell, Robertson, Hagge and especially Phelps. I can see you only want to focus on the black preachers but there is a lot of bashing going on over in conservative land, you just need to look for it.

Posted by: j2t2 at May 15, 2008 3:32 PM
Comment #253022

Actually, the primacy of America will end.

I don’t want it to, but it will. Such is the nature of history: China, Rome, England…the list goes on.

The wheel turns, all things must end.

Last year I went to a dentist in a third-world country overseas. In the office I saw equipment more modern than any I’ve seen here in western Washington. I’m sure some here have as good or possibly better, but you get my point.

Do we have any high-speed maglev trains? Can we securely vote or control our apartment’s temperature by cell phone?

The point is, while we’ve been concentrating on having history’s mightiest military (and spending more than all the rest of the world put together on it), the rest of the world has been passing us up and leaving us behind.

Another telling fact is that we are FORTY-FIFTH on the list of longest life expectancies. _Every one_ of the countries with a longer life expectancy have universal health care in one form or another…with the exceptions of Jordan and Bosnia. Japan is known for hideously high costs of living…but read the following:

“Like the Australian, Canadian and many European health care systems, Japan’s national health insurance program is compulsory. But Japan surpasses all 24 member countries of the Organization for Economic Cooperation and Development (OECD) in life expectancy at birth and also has the lowest infant mortality rate (Appendix 1, Table 1).1 It achieves these successes at a cost of only 6.6 percent of gross domestic product, $1,267 per capita - half that of the United States”

http://www.nyu.edu/projects/rodwin/lessons.html

That, people, is why American primacy is coming to an end.

Posted by: Glenn Contrarian at May 17, 2008 1:55 PM
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