Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

[dcarrigg]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

Another fact to remember is that even if the US economy was not so mismanaged, America's strength relative to the rest of the world would have still declined - simply a function of other countries that were wretchedly poor fast coming up the ranks...The world is changing very rapidly.

Agreed, absolutely.

Your comment got me to thinking, though. I thought "when hasn't the world been changing very rapidly?" Certainly it has been for the last 2-3 thousand years of which we have history...black swans at least once a generation.

For brief illustrative purposes: http://www.timelineindex.com/content...Rows_rsSite=78

[bcassill]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

As a new member here at iTulip, please be patient if I appear to overlook the obvious; I'm trying hard to get my arms wrapped around this macroeconomics.

Although I agree with much of what Pat Buchanan wrote in that article, his claim that free trade has damaged the country (a charge that Peter Schiff also makes) just doesn't make sense to me. Doesn't the fact that a product is produced cheaper elsewhere result in a savings to the American consumer and, in the big picuture, thereby raise everyone's standard of living? As long as we are trading value for value, why does anyone get harmed?

Thanks,

Steph

Free Trade is an academic construct...i.e. it doesn't exist. Whether it's the Chinese, Indians, or the Japanese maintaining a peg to the dollar to keep their goods artificially cheap (i.e. currency manipulation) so that they can keep exporting to the largest economy on Earth or the large farm subsidies that the U.S. government provides to large agri-business conglomerates so that we can cheaply export agricultural product or the Europeans who ply their state owned companies with subsidies to make them profitable, nobody is playing honest. The only way the Chinese and other net exporters have managed to keep their currencies from appreciating is from buying U.S. government debt, which the politicians are only more than happy to give them since it means they can keep on spending without raising taxes. Meanwhile, our "open" trade policies mean that jobs are outsourced by the millions as factories and high value technical skills in engineering and IT are farmed out to locations in China, India, and Eastern Europe. This game results in large temporary payouts for wealthy shareholders, executive bonuses, and Wall Street interests all the while impoverishing the very middle class market these businesses try to sell into.

I like to think of globalization like the Wal-Mart effect. Many years ago when Wal-Mart was in growth mode, they would come into a small town and open a large store. In a relatively short time, what was once a vibrant community with many privately owned stores and businesses was suddenly a ghost town with a single large retailer. Everyone who had worked at or owned one of those businesses found themselves working for the retailing giant with the smiley face making minimum wage. Yes, they got cheaper goods, but they also got a substantial pay cut and reduced living standard in the process. The best trade example along these line is U.S. agricultural exports to third world countries. The main reason many of these countries are net importers of food is because local farmers cannot compete against the U.S. taxpayer subsidized agricultural products that are sold to them. The only thing they have to sell in return (usually) are natural resources which are usually cheaply procured via some well placed bribes to corrupt officials or through coercion via the IMF (please look up "Confessions of an Economic Hit Man" to learn more how the IMF is used to further U.S. business interests).

Anyhow, the gist here is that the game is rigged against the little guy. Whether you are a worker or a business owner, someone well connected has the inside track against you unless you happen to be lucky enough to get in on the front end of an emerging technology. It doesn't matter where you live or if you are conservative or liberal. You are a victim. It is only now when the global economy implodes that the whole corrupt system of larceny and malfeasance is exposed for what it is: a means of transferring wealth from the mass of middle class and more affluent households to a select few corporate and financial entities.

The promised benefits of globalization are a lie every bit as much as the promise of ever increasing asset prices. It has only helped to benefit the few at the expense of the many.

[Starving Steve]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

While it is true that China still doesn't have pure free-trade policies, China to-day has more free-trade and more openess than ever before in my lifetime. Similarly, while it is true that China still doesn't have democracy, China is more democratic now than ever before in my lifetime.

China is becoming more democratic and more open with each passing year. And China's development ( along with the development of all of Asia ) is helping make the entire world more prosperous and more free.

Think back to the way China was in the 1960s: red brigades tearing-up stores and destroying property, even desacrating historical sites of national and international interest; books being censored and supressed; people being tortured or executed for their thoughts and writings; mass poverty; militarism; totalitarian communism; thought police; atomic-bomb testing; religious sites supressed; people beaten by red brigades in the streets; executions, prisons, and closed borders and closed minds.

China to-day is becoming the hope of the world, and although China is still not perfect, it is moving rapidly toward full democracy and full free-trade.

[bcassill]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

If you have no job, how about working at a lower wage--- provided that the lower wage buys more than before? What is wrong with de-flation?

Or if you have no job, how about taking your savings and investing it into oil and gas trusts that pay a high rate of return? (That's what I did.)

Or if you have no job, how about substitute teaching even though you have a clear teaching credential. (That's what I did.)

Or if you have no job, how about investing your savings in your house? (I did that.)

Or how about renting your house out and drawing income from your house? (I did that, too.)

Or how about creating your own job running your own business, your way? (I did that, too.)

But if you want to drink and smoke and drive a Hummer, if you want to take holidays and buy electronic gadgets, drink lattes, and if you want to live off of the savings of others by maxing-out your credit cards and borrowing off of your home, then I have no sympathy for you whatsoever.

There was a class of people in America, many of them dot-commers, and many of them scam artists and Ponzi-schemers. They prospered under the Republicans, especially under George Bush Jr. Now this whole bunch is facing a reckoning, and I am glad..... Let them starve.:rolleyes:

There is another bunch in America that has never saved for the future, as if they would remain healthy forever. This bunch would go to hospital emergency rooms and not pay one-cent. They would leech off of the healthcare system or off of county welfare programmes. Now their day of reckoning has arrived too, because they will have to pay for their own private for-profit health insurance. (And these very same leeches were some of the idiots who showed-up at tea-party protests in recent weeks against the public-option to be able to buy into Medicare at age 55. )

The people in America are now getting what they deserve. I love it.

Steve,

Thank you for taking the time to lump all Americans into a single category. It certainly makes things easier. What other categories could we possibly come up with? How about arrogant cheese eating pacifists for the French or hippie, pot smoking liberals for Canadians (or their xenophobic franco-phile cousins in Quebec), or overly polite English folk with bad teeth and poor culinary skills. Yes, that certainly simplifies things. It's also extremely insulting to everyone involved.

Just so you know, the largest single cause of bankruptcy in the States is due to medical reasons. This is the true even among those with extremely good insurance coverage. Nothing can wipe out a lifetime of savings quicker than a serious illness or prolonged hospital stay. Yes, there are certainly those who overspent and overindulged and are now in serious financial trouble as a result. They certainly deserve what they get. However, they are a small but overly exaggerated minority.

The uneducated poor have also always existed. Interestingly, I used to know a business person whose clients included some very well paid athletes. His comment was that some of them were so stupid they couldn't even balance a check book. Yet, they were millionaires. If it weren't for their athletic ability, they would likely be standing in line somewhere for free medical treatment or going to Tea Parties. Without the athletic talent, they would be digging ditches for a living. Don't ask them to understand money, or become an engineer, or to debate the finer points of foreign policy. It's not their cup of tea (so to speak). However, many of these same type of folks bust their ass day in and day out to pay bills and don't ask for much in return. As long as you are working (or looking for work), living below the poverty line is not a crime last time I checked. Call them anything you like. Just don't call them leeches.:mad:

Let's try to keep the conversation intelligent next time and avoid the stereotypes. K?

[Rajiv]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

What is interesting is that so called "Free Trade" allowed gains made by the US Labor movement to be weakened, and allowed the income and wealth differential (that had shrunk by the mid 1970s) to increase to levels not seen since the time of the "Robber Barons" ("Captains of Industry.")

A figure from Saez's work will illustrate the shift from the average person to the "Captains of Industry"



Remember that the scales are logarithmic -- so the average salary is ~$40,000

Of course Saez adjusts using the standard CPI. Things for the average worker would be much worse if the Shadowstat CPI figures were used.

[GRG55]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

What is interesting is that so called "Free Trade" allowed gains made by the US Labor movement to be weakened, and allowed the income and wealth differential (that had shrunk by the mid 1970s) to increase to levels not seen since the time of the "Robber Barons" ("Captains of Industry.")

A figure from Saez's work will illustrate the shift from the average person to the "Captains of Industry"



Remember that the scales are logarithmic -- so the average salary is ~$40,000

Of course Saez adjusts using the standard CPI. Things for the average worker would be much worse if the Shadowstat CPI figures were used.

Is it only "free trade" or globalization, or has the "financialization" of the economy been an important contributor to this trend?

[c1ue]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

C1ue, I am afraid you are wrong on this one.

Any growth in spending has been in entitlement programs and interest. Other areas of discretionary government spending have shrunk as a percentage of GDP -- and significantly since the 60's.

You may be right - due to your prompting I looked at the sources listed for usgovernmentspending.com (US Budget, US statistical abstract) and the numbers listed in the sources are consistent with a 17% to 20% range as opposed to the 25% to 45% range on the web site.

I have sent an inquiry as to why these are different, but my suspicion is that the USgovernmentspending.com site probably includes other government spending such as state budgets.

However even in the 17% to 20% case - the collapse of the Soviet Union in the late '80s certainly should have seen some type of 'peace dividend' compared to the '60s; the '60s had such high profile events as the Moon landing, Bay of Pigs, etc with of course the Vietnam war bridging to the '70s.

Either way the resolution of this discrepancy certainly has an impact on my understanding of the past.

The present and near future, however, will see the US government spending clearly exceed previous bounds under either the 17%-20% (to 25%) or 25%-35% (to 45%).

[Rajiv]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

Is it only "free trade" or globalization, or has the "financialization" of the economy been an important contributor to this trend?

Free Trade and Globalization would not have been possible without the "financialization" of the economy. How do you think the "outsourcing" of manufacturing and jobs was financed?

However, a bunch of factors also aided. Weakening of labor laws and the induction of women into the work force (led to the illusion of maintaining family living standard, while average real wages declined). This has led to the phenomenon of a family of four with 2 1/2 jobs (one member at 40h/wk and one at 60h/wk) This compares to around 1.2 jobs per family in the mid 1970s. The family living standards HAVE NOT risen since then. This fact has been discussed elsewhere in my posts when discussing inflation

[ThePythonicCow]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

For brief illustrative purposes: http://www.timelineindex.com/content...Rows_rsSite=78

What I see on that timeline is that humans have been engaging in wars for thousands of years. That much I definitely agree with.

What I don't see is something else, which I think is also true, that the pace of economic, financial, technological, demographic, ... changes has been accelerating at an increasing rate over the last few decades or century.

A world-wide integration of human activity is forming increasingly quickly. In someways it's ugly and alarming, in other ways it is unifying and awesome. But in any case, it's the formation of an increasingly elaborate layer of supra-human activity which we are only just beginning to understand.

[ThePythonicCow]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

Although I agree with much of what Pat Buchanan wrote in that article, his claim that free trade has damaged the country (a charge that Peter Schiff also makes) just doesn't make sense to me. Doesn't the fact that a product is produced cheaper elsewhere result in a savings to the American consumer and, in the big picuture, thereby raise everyone's standard of living?

The problem is that we (humans) don't understand how to distribute our economic wealth except by a few rather flawed and limited methods.

Basically it's one of:

• some few powerful (dictators, oligarchs, whatever) control things, taking what they want and leaving table scraps for the rest,
• we each have what the fruits of our own labors can provide directly or in trade,
• we can have the fading value of savings earned from the earlier fruits of our labor, or
• a socialist government or a community supported charity transfers wealth from those who have to those in need.

None of these mechanisms are of much use if one nation is making all the "stuff" another nation consumes. If a small army of Chinese laborers are making all the things I use, leaving me all day to watch TV or post on iTulip, then we humans have no economic mechanism in place or even understood that could determine what, if anything, I should have, past the fading value of whatever I might have saved from the fruits of my past labors.

In other words, if some hard working Chinese are making all the goods, then shouldn't they have all the wealth and leave me to share dirt pie recipes with North Korean peasants :eek:?

Humankind does not understand how to organize large scale economies in a way that respects individual human freedom and initiative while providing opportunities to each of us for realizing the relative prosperity which our present resources, technologies and industries would seem to make possible.

[Raz]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

I do NOT like Pat Buchanan, nor any of his paleo-conservative bunch. These are the xenophobic bunch in the Republican Party, especially the Christian-right. They, along with the neo-cons, have destroyed the Republican Party in America.

Whatever happened to liberalism, or even just moderate conservatism, in the Republican Party? Whatever happened to the liberalism and tolerance in the tradition of Governor, Nelson Rockefeller (R) or President, Dwight David Eisenhower (R)? That moderation appears to be gone now.

You're displaying your ignorance of facts here Steve.

Paleoconservatives are most certainly NOT the Christian "right", though many of them are indeed Christians.
Paleoconservatives are aghast at Presidential Wars, "preventative wars" (Bushism, Wilsonianism, etc.), foreign entanglements and treaties obligating the US to do for others that which they refuse to do for themselves, theocracy, Big Government and its handmaiden - HUGE deficits, fiat "money", an activist judiciary, a large and expensive standing military (except for the Navy), etc.
They only favor involvement of government at any level where the private sector does not function fairly and well, regulation being necessary in order to insure that it does so operate, and, with only an extremely limited scope, direct government participation - and all this in strict accordance with the principle of Subsidiarity. They are particularly distressed by the destruction of the Tenth Amendment to the Constitution and the usurpation by the Federal Government of powers that are not enumerated to it.

What happened to the "liberalism" of Nelson Rockefeller? You just witnessed a mutation of it in the "compassionate conservatism" of George W. Dumbass, joined with huge spending, false patriotism and the ignorance of the masses who were duped into believeing that Bush was truly conservative. That "liberalism" has effectively wrecked the Republican Party.

And an honest look at the Democrats (Obama, Pelosi, Reid, Dodd, Frank, et al) should lead one to see them as being corrupt and useless as well.

[dcarrigg]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

What I see on that timeline is that humans have been engaging in wars for thousands of years. That much I definitely agree with.

What I don't see is something else, which I think is also true, that the pace of economic, financial, technological, demographic, ... changes has been accelerating at an increasing rate over the last few decades or century.

A world-wide integration of human activity is forming increasingly quickly. In someways it's ugly and alarming, in other ways it is unifying and awesome. But in any case, it's the formation of an increasingly elaborate layer of supra-human activity which we are only just beginning to understand.

Maybe so...but I think that an integration of human activity has been occurring at a pace quicker than we'd like to realize for quite some time - perhaps the whole of human existance. We have more data now, for sure, but the technological, financial and demographic changes caused by the bubonic plague in the 1340's and 50's was bigger by far than our technical revolution. All in the same 20 year period.

A lot goes on every generation. More change than people generally think looking back. I would argue, as much change as today.

Imagine Napoleon's army coming through and spreading ideas of nationalism and enlightenment to serfs. Was that any less jarring than facebook and e-trade? Watt's engine powering Lowell's city more life-altering than twitter? The rise of communism in Russia & China as powerful as Friedman's globalization? Fascism in western europe more jarring than the de-industrialization of America? The invasion of China by the Japanese as horrible as Iraq? Light bulbs a bigger deal than collateralized debt obligations? A successful revolution of a republic vs. a monarchy? The introduction of europeans into the Americas more history altering than instant communications? Marco Polo more financially relevant as google? The Phonetician alphabet more important than unix? Arabic numerals as valuable as binary?

[Serge_Tomiko]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

None of these mechanisms are of much use if one nation is making all the "stuff" another nation consumes. If a small army of Chinese laborers are making all the things I use, leaving me all day to watch TV or post on iTulip, then we humans have no economic mechanism in place or even understood that could determine what, if anything, I should have, past the fading value of whatever I might have saved from the fruits of my past labors.

One of the essential arguments for all progressive ideologies is that increased efficiency and technology are good things. The only difference between communism and capitalism are those which you elucidate.

If we are to believe progressives however, then what are we to do when technological advancement allows ALL humans to be free of work?

To an extent, that is almost what we have today. Another poster made the simple statement that all we really need is food, clothing, and shelter. With the exception of non-industrial people engaged in subsistence living, I'm sure the percentage of the remainder that participates in the global economy that is involved with these essential aspects of life is fewer than 5% of the population. What does the other 95% do?

This is something of a science fiction question, but thanks to the FIRE economy - it's almost true in the US. We have millions upon millions of people who serve no economically productive purpose, and consequently live completely empty lives devoid of any meaning or purpose.

[iyamwutiam]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

One of the essential arguments for all progressive ideologies is that increased efficiency and technology are good things. The only difference between communism and capitalism are those which you elucidate.

If we are to believe progressives however, then what are we to do when technological advancement allows ALL humans to be free of work?

To an extent, that is almost what we have today. Another poster made the simple statement that all we really need is food, clothing, and shelter. With the exception of non-industrial people engaged in subsistence living, I'm sure the percentage of the remainder that participates in the global economy that is involved with these essential aspects of life is fewer than 5% of the population. What does the other 95% do?

This is something of a science fiction question, but thanks to the FIRE economy - it's almost true in the US. We have millions upon millions of people who serve no economically productive purpose, and consequently live completely empty lives devoid of any meaning or purpose.

+1
Well said

[c1ue]

Re: Pat Buchanan: A Decade of Self Delusion (We Did It To Ourselves)

Mr. Chantrill was extremely prompt in his reply:

You are charting Total government spending as a percent of GDP. That includes state and local spending as well as federal. If you want to chart Federal spending only then you should chart this:

http://www.usgovernmentspending.com/...olor=c&local=s

You will see that the chart brings federal spending in at about 20 percent GDP.

You can check the sources for usgovernmentspending,com at http://usgovernmentspending.blogspot...s-by-year.html

Hope this helps.

--Chris

So indeed the difference between the federal budget numbers and the total government spending is local and state spending.

The question now of course is how much change there has been in the relative roles between the federal government and state/local governments...

Certainly the state level deficits are terrifying and getting worse; coupled with the federal ability to print money - a potential permanent shift in roles/responsibilities may be at hand.

Unfortunately the result is still an extremely high government chunk of spending as part of overall GDP.