Monday, January 4, 2010

Delusions of the Economic Right-Wing

Ross Douthat has one of the stupidest, least informed (or most dishonest) essays on the economy that I've seen in The New York Times . . . ever. He does little more than toady for an equally dishonest though better-sounding (emphasis on "sounding") Jim Manzi in National Affairs.

Briefly, they offer a toned-down but otherwise very familiar conservative economic diet so that the US can maintain its economic primacy in the world — something they seem worried about in much the way that men fret over the size of their penises.

Here, my response:

A complete account of the flaws and misrepresentations in Ross Douthat's essay and Jim Manzi's in National Affairs would require more space than Douthat's essay takes in the first place.

Here are a few of the glaring problems:

1. Both Manzi and Douthat, particularly Manzi, treat American economic leadership as some kind of national security issue. They both come off as narrow-minded jingoists, or as men worried about their penises. We can be sure that the American companies relocating production and off-shoring labor to Asia are less concerned about American economic leadership than they are about lining their own pockets — in its sheer extremes, a decidely American ethos that the crimes of Wall Street and the health industry prove amply.

2. Manzi is absurdly sloppy in his use of language. He, and Douthat copying him, talk of "America's global output" compared to Europe, China, India. In dollars or tonnage or what? Is this the Europe including the eastern countries of the former Soviet bloc? Is the vaunted US output including the fantastically wasteful military production? (The US has effectively remained on a constant war footing for 30 years and has effectively been at war continuously for 60.) Does US output include the fools' wealth of the housing bubble and the ponzi schemes of Wall Street? Nothing in Manzi's or Douthat's essay provides any answer.

3. Most glaring: Standard of Living. Douthat and Manzi both make passing reference to the American standard of living and then let it drop — for obvious reason: the US standard of living is a disgrace for a country as productive as Douthat and Manzi claim. All of the major western European nations, with the likely exception of Britain (which of the European nations has most closely tried to copy the American Standard), have a higher standard of living than the US. The Scandinavian countries, with the most 'socialistic' economies have the highest standards and the greatest levels of satisfaction among their populations.

4. Our "politics are polarized"? Hardly. The vast majority of Democrats have bent over double to copy the Republicans. It is the right-wing Republicans, who now constitute the entire Republican party in Congress, that have sought at every turn to torpedo political and economic consensus.

5. Obama Democrats returning to "European-style social democracy"? Does Douthat read the news — at all. There is little if any Obama or Democratic move to reregulate Wall Street or to regulate the health industry beyond a few token measures that will likely be easily evaded. Obama offers environmental measures as "suggestions". The FDA may get some regulatory teeth back, but only after 3 decades of disaster, thanks to Reagan and Clinton. "Micromanaging industry"? How? Where? Can Douthat offer even one example beyond, perhaps, the banning of denial of health insurance coverage on the basis of pre-existing conditions? There is simply no basis in fact for Douthat's or Manzi's assertions. They offer nothing more than Friedman/Greenspan style conservative economics.

6. Partnerships "between Big Business and Big Government"? What partnership? We the People bailed out Wall Street after vague threats by overpaid executives? We bailed out the auto manufacturers only after it became clear they really would fail, taking with them tens of thousands, even hundreds of thousands, of jobs. Republicans fought the aid to Detroit tooth and nail. Our health insurance and Wall Street "partners" continue to fight any change that might threaten their grossly over-sized bonuses. Again Douthat shows a childish ignorance of or a willful (very Republican) indifference to fact.

Last, "We're all in this together"?! You've got to be kidding. If the past two years prove anything at all, it is that we are *not* all in this together. The wealthiest 1% to 5% of Americans (or fewer) and their paid representatives in Congress have immunized themselves against the conditions of the vast majority. In this respect, the US is doing quite well at keeping pace with China.

2 comments:

Anonymous said...

Thanks for your detialed comments on my (the Manzi piece article). There's obviously a lot here, and I couldn't hope to reply to it all, but I'll concentrate on what I see as the key points, keyed to your numbers.

1. Not worried about my penis. I do think that, in the long-run, economic leadership is essential to maintaining our national security.

2. I used the OECD defintion of Europe and GDP for output. You might be surprised at how much I agree with you that much of our military spending is wasteful, and made specific recommendations in the piece about how to prevent (to the extent possible) the kind of financial crisis we've just gone through (or more likely, in my view, are still going through).

3. I love many aspects of the European way of life. I've lived in Europe by choice extensively, was married in France and so forth. I tried to emphasize in the piece why the European solution has advanategs, and is in many ways attractive, just IMHO unsuited to our strategic siutation. I view this in some ways as tragic, rather than somehting to be celebrated.

4. Not really a topic I tried to address.

5. I provided a list of evidence in my piece for this assertion that I won;t repeat here.

6. "We the People bailed out Wall Street after vague threats by overpaid executives?" I agree, and supported the bailout, recognizing its drawbacks, and argued at the time that no protection should be offered to executives or hsareholders of these institutions. The executives should have been canned and the shareholders wiped out. "We bailed out the auto manufacturers only after it became clear they really would fail, taking with them tens of thousands, even hundreds of thousands, of jobs." I also wrote about this extensively at the time, and won't repeat all that here, other than to say that this strategy has a long record of failure in many, many countries, and very few long-term successes. It's improtant to separate the actual machinery, jobs and know-how for the owenership rights of current shareholders and contractors, which are what is actually protected ina bankruptcy. Bankruptcy is a change in ownership of assets, so in preventing it, you aren't really protecting workers, you are protecting shareholders and (n this case more politcially rleevant) those who have contracts with the company. "Our health insurance and Wall Street "partners" continue to fight any change that might threaten their grossly over-sized bonuses." I agree - at this point they are primarily polticial rent-seekers.

"Last, "We're all in this together"?! You've got to be kidding. If the past two years prove anything at all, it is that we are *not* all in this together. The wealthiest 1% to 5% of Americans (or fewer) and their paid representatives in Congress have immunized themselves against the conditions of the vast majority." I broadly agree with this. The point of my piece was to recognize this, but to argue that the obvious solutions have terrible problems of their own. This is what I meant by saying that "America is between a rock and a hard place".

Again, thanks for the detialed comments.

Best regards,
Jim Manzi

Mike McShea said...

I don't know who this clown Manzi is but Douthat is a paid arm of the Vatican who starting talking about "Pantheism" in Avatar. A lunatic in an insane asylum talking to the wall about theology. Now he does economics too?

These economic crony hacks remind me of the old days. Dad - the Factory owner - is talking to his sons Manzi and Douthat - talking about how tough it is. They are sitting on their assets in the front office of an empty factory.

There is no need for national security anymore. There are no real need for borders anymore and little or no need for government.

The only people who seem securely employed in place are the PR talking heads protecting a dinosaur government.

The factory is empty guys. You've outsourced humanity out of the worldwide economic equation.

There is only such much printing money can do to continue your delusion.

Round Two of economic collapse is a very short ways down the road IMHO. One bad crop and then the bread riots. Romanoff city all over again.