Lou Dobbs Thinks You Are a Fool
Lou Dobbs is not a fresh voice of opposition to the government. He does not offer us anything more than centuries old, antiquated notions of mercantilist policies of protection, which plunder the many consumers in order to protect his favorite class of people. He supports the very policies of destructionism, economic nationalism, and protectionism which create more and more economic crises, for which the tax payers need to be shaken down again and again to foot the bill and subsidize those pet industries which guys like him like. FULL ARTICLE
Comments (47)
Dobbs is correct that a war is being waged on the middle class, but he gets nothing right after that.
Published: December 14, 2006 9:31 AM
Hear me say: "I'm not sure."
I'm not sure that titling this tract, "Lou Dobbs thinks you're an Idiot.", is the best use of either, this tract, or the message that Lou Dobbs is delivering.
Dobbs is one of the very few, within the MSM, that is even questioning "Free Trade" agreements like NAFTA, CAFTA, WTO, etc..
That is the message, in my view, that should be reinforced, first. Then, the anti-protectionist ideas could follow, because the costs of protectionism could be seen, in relief, in mirror-image.
Personally, I wonder if the author would have stick enough to write: "Lew Rockwell thinks you're an Idiot." LR, for his own account, in his own words, has depososited the idea that NAFTA, CAFTA, WTO, et al., are "Free Trade" agreements. That type of mind-bending is less than useful, far less, to me, than Lou Dobbs' supposed 'protectionism' and its attendant costs.
Published: December 14, 2006 9:42 AM
sorry, obviously, the Title was: "Lou Dobbs Thinks You Are a Fool"
Published: December 14, 2006 9:43 AM
M.E., I'm not sure what you're trying to say about Lew Rockwell, since the crucial word your whole argument turns on is "depososited," which I can't decipher. If you are saying that Lew has argued that those things are genuine free trade, then you obviously weren't following the Institute's activities when these things were being debated. The Institute stood nearly alone in pointing out the fraudulent nature of these alleged "free trade" agreements. Where in Lew's "own words" does he say otherwise?
Published: December 14, 2006 10:16 AM
Tom,
If you have the capacity to search the blog comments by poster, you'll find, within the last 45 days, an interchange, between L.R. and myself, about his use of "Free Trade" in reference to NAFTA, CAFTA, WTO, et al..
http://www.thefreedictionary.com/deposit
see verb, definition 1.
Published: December 14, 2006 10:32 AM
My recollection of the Mises Institute’s and Mr. Rockwell’s stance regarding the above mentioned trade agreements is in accord with that of Professor Woods’.
I remember someone at the Institute writing several years ago that if these agreements were actually free trade agreements, why then are they hundreds, if not thousands, of pages in length? True free trade agreements would only require a few pages to formulate.
Published: December 14, 2006 10:48 AM
Lou Dobbs is no different that many other statist commentators - he is consistent in his misappreciation of reallity. Lou is one of those demagogues that seem to fit the niche in the news media for conservative-ish windbags.
The first time I saw his show, he invited a person described by Lou as a "very dear friend". The man was a successful businessman (and in my opinion, a very calm, sharp intellectual). At that time, Lou had his sword unsheated against "exporting jobs out of America". His friend told him that jobs were not being exported and that outsourcing was nothing more than a manifestation of Comparative Advantage - Lou just rolled his eyes and made funny faces after hearing about one of the most basic tennets of economics. At that moment, I knew this guy was full of hot air.
He is now on the warpath against "illegal" immigration, saying that there are enough Americans willing to take the jobs that immigrants are doing - at one time, he showed a few Americans doing odd jobs like fixing roofs and cooking meals . . . uh, but not ONE American picking lettuce or tomatoes or strawberries. Seems like he was pretty selective on showing the kind of jobs Americans were willing to do . . .
John Stossel (the ABC libertarian investigator) did a good job exposing Lou as an old-school protectionist and as a purveyor of falsehoods.
Published: December 14, 2006 10:58 AM
Of course Lou thinks you are an idiot. You proved him right wheh you bought his book. When you read the reviews for this on Amazon and saw that it got all those shiny stars, didn't you realize that it was just another regurgitation of the same old has been, emotionally charged, moronic blather of those who slap the people they claim they want to help?
Some free advice to you would be to treat this book like a set of those low quality stamped steel and plastic steak knives you got off late night TV. Hide it, and never let anyone know you own either of them.
Published: December 14, 2006 11:05 AM
See Higgs, "Quasi-Corporatism: America's Home-grown Fascism"
http://www.mises.org/multimedia/mp3/ss05/ss05-Higgs.mp3
Published: December 14, 2006 11:12 AM
M.E., as luck would have it I am in fact familiar with the word "deposit." Your typographical error was what I was talking about when I said I couldn't decipher it. Perhaps you meant "posited," perhaps you meant something else; I didn't want to assume you were wrong (and the use of "deposit" there would indeed be wrong, according to my recollection of events), so I asked for clarification on your choice of word.
Published: December 14, 2006 11:27 AM
I enjoyed reading the article, but felt the outsourcing of jobs needs more depth. It takes a stance that there’s nothing wrong with the current situation of fluctuating currencies and their affect on international trade.
In particular, I would explain how the usage of government printed money has allowed foreign states to devalue their currency to further mercantilist goals. Outsourcing would still occur under capitalism, but at a fraction of current levels. American exports, including manufacturing, would also increase as free-market money flowed into the bank accounts of foreign nations – balancing trade between nations. Under the current situation, American dollars are sent back in the form central banks purchases of sovereign debt and mortgage-backed agencies.
In rebuttal of common criticisms of capitalism, the increased costs associated with medical expenses, shelter, food, clothing, etc are all due to the usage of government printed money that has been continually inflated to avert recessions. Prices are rising in reflection of the American dollar’s decreasing purchasing power.
In the end, I suggest offering a solution that embraces capitalism even further. Free-market money, not necessarily a commodity, would end the majority of this nation’s problems.
Published: December 14, 2006 12:02 PM
Could "War on the Middle Class" be nothing more than print contoured for mass consumption (hence title), and not so much a true representation of the whole picture? Good timing for the holiday season.
Ignorance is a cash register.
Perhaps this gives more credit than is deserved...
Published: December 14, 2006 12:59 PM
"depososited" yes, Quite. Sorry. My error.
Past that, I would wish that one of the weblog's moderators would kindly execute the search, I referenced, above, and, at least, provide the thread containing the exchange I was alluding to.
To my knowledge, the weblog is not freely searchable by 'poster'.
Published: December 14, 2006 1:20 PM
Great article. Don Boudreaux noted recently that Dobbs said (in a 2005 Mother Jones interview) that "I cannot find anyone for whom free trade is good." Dobbs is smart enough to know better, but has found a niche market for his fallacies, which makes his career in recent years all the more dubious.
ME, if you would spend a few minutes researching the yoeman's work that the Mises Institute did on NAFTA and the WTO from about 15 years ago, I think you'd realized that you misinterpreted Lew's views on NAFTA and the WTO's relationship to free trade. And you can depososit that in the bank.
Published: December 14, 2006 1:34 PM
Great article. Don Boudreaux noted recently that Dobbs said (in a 2005 Mother Jones interview) that "I cannot find anyone for whom free trade is good." Dobbs is smart enough to know better, but has found a niche market for his fallacies, which makes his career in recent years all the more dubious.
ME, if you would spend a few minutes researching the yoeman's work that the Mises Institute did on NAFTA and the WTO from about 15 years ago, I think you'd realized that you misinterpreted Lew's views on NAFTA and the WTO's relationship to free trade. And you can depososit that in the bank.
Published: December 14, 2006 1:38 PM
Chris,
Give L.R. a call, and see if he recalls the thread interchange, he and I had, that he chose to 'beg-off' from.
We'll see if the check comes back, stamped NSF.
Published: December 14, 2006 1:53 PM
"How does one so successfully convolute their thinking so that they could confuse "treaties" like WTO, NAFTA, CAFTA, et al. with Free Trade?
Posted by: M E Hoffer at November 8, 2006 6:35 PM
M E,
And what do you suppose will replace these treaties? Pure laissez-faire? Or protectionism driven by people frightened of the goods Wal-Mart is buying from overseas?
Posted by: L.R. at November 8, 2006 7:44 PM
L.R.
Free Trade would be just that, Free. We should light up those "treaties", bonfire-style, and light up our trade routes, from beginning to end, "Lights, Camera, Action"-style. I think the result would truly be less costly, more efficient, and generate greater wealth for more people.
Those "treaties", that masquerade as Free Trade, currently shield their "work" in nearly impenetrable reams of paper, thousands of pages thick. Worse, they create supra-state organizations peopled by the barely-known making "decisions" that barely, if, knowable.
What else are they, if not a travesty?
M E,
NAFTA is more complicated than is ideal; I don't disagree with you on that. The question is not what should happen, it's what likely will. The popularity of Lou "Yellow and Brown People are Taking Your Jobs" Dobbs, not to mention the election of Bernie "Greedy Capitalists are Taking Your Jobs" Sanders, does not exactly evince a great economic perspicacity on the part of the American people. I dearly wish it were otherwise, but let's not fool ourselves here.
* If any Firefox programmers are reading this, the word "okay" isn't in your spell-checker's dictionary...
Posted by: L.R. at November 11, 2006
more here: http://blog.mises.org/archives/005863.asp#comments
Published: December 14, 2006 2:04 PM
Question:
What is wrong (economically) with unionized government workers ? Without a union they can be subject to the whims of politicians.
Published: December 14, 2006 2:20 PM
SNS,
Government workers serve at the mercy of the taxpayers and should be dismissable for any cause or no cause. A union CBA is inconsistent with this.
And,
If government workers were subject to the whims of politicians, it would also mean that when people vote to change the government, it really would change the government.
Published: December 14, 2006 2:49 PM
Regarding unionization of government employees, your question sort of treats them as if they were purely victims. I think it might better to look at them as working for a criminal gang. Would unionizing members of a criminal gang limit the power of the gang bosses? Perhaps. Does it actually make the gang criminal? This is the more important question. (I don't have an answer, but it's possible it might make it less criminal. However, it seems that the gang members, in this case, lobby more against those outside the gang and to keep and extend their privileges than to reduce the overall power of the gang.)
Published: December 14, 2006 3:04 PM
M.E., that "LR" isn't Lew Rockwell, so there's your problem. I cannot remotely imagine Lew Rockwell criticizing the Mises blog for being too attached to principle, as "LR" does in the blog exchange you cite:
"Meanwhile, the Mises blog features...an attack on Deepak Lal, author of a defense of classical liberalism, because he's not an anarchist.
"Oh."
Published: December 14, 2006 3:23 PM
Tom,
Seeing that the post was Rockwell's, I had assumed that L.R. was he. If it were not Lew, then, of course, two things: 1. I haved proved, in stark relief, what happens when one 'assumes', and 2. I am sorry for having done so.
I was, at the time of that interchange, quite surprised to see such from "L.R.", thinking, then, that it was a distinct departure from what I have come to know about Lew Rockwell.
Somehow, though, I'd still feel better if the real "L.R." ( Lew Rockwell ) would put paid to the confusion.
Published: December 14, 2006 4:16 PM
In a market prices (including prices for labour - wages) are determined by supply and demand (the civil interaction of human beings). Someone who wants government (i.e. the threat of violence) to set prices does not believe in the market - no more than President Richard Nixon did.
On trade: Certainly there are "side agreements" in such agreements as N.A.F.T.A. that impose regulations. But I very much doubt that Mr Dobbs is opposed to these regulations - most likely he thinks there should be more regulations (demanding that Mexican wages be higher, that there should be more environmental regulations - and so on).
"We do not like N.A.F.T.A. [or some other agreement] and the left do not like N.A.F.T.A. - therefore we can cooperate with them" is, thankfully, not the sort of thing one hears in pro liberty circles much anymore.
Back in the 1960's Murry Rothbard and Karl Hess tried to "join hands with the left" because "we oppose the government and they opppose the government", it took them some time to understand that the reason that the left ("New Left" or old) is because they want to replace with a totalitarian Marxist nightmare (whilst using language like "economic democracy" or "economic justice" or "social justice").
It is the reasons WHY someone opposes something (whether N.A.F.T.A. or anything else) that should interest us. If they want more statism (not less) we can not "join hands" with them. The enemy of my enemy may not be friend - he may be more of an enemy (far more of an enemy) than President Bush and the rest of the spendthrift politicians.
As for the United States being controlled by evil corporations. Corporate taxes are higher in the United States (espcially when one includes State taxes)than in many countries.
As for spending. Most government spending (Federal, State and local) goes on the Welfare State schemes (what used to be called "Health, Education and Welfare"). Such spending, on the Social Security Ponsi scheme and so on, is at all time record high.
Certainly "coporate welfare" (and other Pork) is a bad thing. But to claim that it is somehow the main form of government spending is simply false.
Lastly, if Mr Dobbs dislikes corporations why does he not resign from C.N.N. - which is part of the Time Warner megacorp.
I am tired of all these anticorporate films made by Hollywood corporations, and anticorporate books published by corporations.
As Mr Dobbs might say - it is a matter of corporations putting profits ahead of truth or honour. In that they produce utter nonsense (in the form of films, books and so on) in the hope that people will pay for this stuff - thus pandering to the paranoia and ignorance of the public.
This, Mr Dobbs could say but will not, is the "unacceptable face of capitalism" - the production of anticapitalist lies (not to strong a word - as people like Mr Dobbs know they are writing nonsense) by capitalists - in the hope of making a buck.
As Lenin said "they will sell us the rope with which we will hang them".
The "fools" are not just the people who buy Mr Dobbs book - but also the people who emply him at C.N.N. and the people who publish his book.
"There is nothing wrong with producing products that appeal to the anti capitalist sentiments of the public" - there is if one does not want to help create a climate of opinion where higher taxes and yet more regulations (and far worse things) become that much more likely.
Also I think the whole thing is LAZY.
When pro liberty books are properly marketed they do well in terms of sales (and so do pro liberty films and television shows). But corporations just go on promoting collectivist crap (such as the latest book by Mr Dobbs) - because that is what they are used to supporting.
Perhaps the endless marketing of statist stuff (when anti statist stuff would sell at least as well - if marketed well) is because corporate managers have (mostly) gone to college, been taught various forms of collectism, and rather hate working for the very "evil capitalist" enterprises they manage. But a lot of it is just force of habit.
Published: December 14, 2006 4:30 PM
Saturdaynightspecial:
The thing is, most government workers already have civil service protection and a very tough grievance procedure. In fact, the difficulty in trying to dismiss an inefficient government employee is almost legendary. Their pay scales are set by legislation as are their benefits. Essentially government unions seek to make government workers already cushy working conditions even cushior.
However, that is not the prime reason for government unions. There is, in fact, no reason at all for government unions to exist. So why do they??? Well, the answer lies, suprisingly, in the private sector. Private sector unionism is dying. Union workforce percentage in the private sector is down to 7.8% and falling rapidly. The union percentage in the government sector is 36.5% and making slight headway. The unions are failling everywhere in the private sector and as they fail, dues revenues is dying up. If the unions did not attach themselves like a parasite to government, their revenues would soon be insufficient for them to maintain their political influence.
So there you have it. Government unions are nothing but a union revenue source for union political lobbying.
Published: December 14, 2006 5:01 PM
Paul,
If this: ""We do not like N.A.F.T.A. [or some other agreement] and the left do not like N.A.F.T.A. - therefore we can cooperate with them" is, thankfully, not the sort of thing one hears in pro liberty circles much anymore."
--was directed in response to my first post: I suggested no such thing.
I was suggesteing that Dobbs' is correct for opposing NAFTA, CAFTA, WTO, et al. (for whatever his reasons are), and that, seeing his popularity, his original stance might be one to first embrace, then shred.
Much to Reactionary's point, at the top.
Published: December 14, 2006 5:40 PM
The article "Lou Dobbs Thinks You are a Fool" was interesting, thought-provoking, and well-written. As with many such debates between intelligent people, in the end my feelings are ambivalent. I think you are both right on several of your assertions. This is not avoidance of analytical thought on my part, but rather recognition that paradox can and does exist and that there is also a time dimension to all knowledge (and opinion). That is, what is "right" in the short-term may be wrong, imprudent, or inappropriate over a longer time period, and vice versa. Apart from the book's and article's contents, there is also in such debates, a matter of context, and, I would add, a matter of the audience to whom such content an article is addressed. Must ideas be universally true and infinitely unchangeable in order to be correct? Can there be no difference between near-term tactics and longer-term strategy?
The article's author is obviously an economist and an academic, as I suspect are many of Mises' readers. Even within the field of economics there are wide disparities in points of view. Milton Friedman and John Maynard Keynes could not have any wider disagreement in philosophy, for example. There can be honest disagreement on any issue though it is my personal preference for such disagreement to be factual, logical, and not disparaging in tone. It is likely that the audience for Lou Dobbs' book is that of a wider cross-section of, typically American, readers, whereas "Angelo Mike" apparently addresses academics and economists. In this sense he is "preaching to the choir". Perhaps Lou Dobbs is doing the same to his intended audience. I am not a Lou Dobbs apologist. I have never met the man nor have I read his book, though I did watch a Charlie Rose interview with Lou Dobbs about the book. I think he made many good points. I think the general spirit of the views he posits resonate with a wide range of Americans. On balance I think that while I can agree with the macroeconomic and academic viewpoint of Angelo Mike, I tend to view Lou Dobbs' assessment more favorably -- at least for now.
Allow me to consider just two of the article's more controversial objections.
Healthcare: If it is indeed true that 46 million persons in the US have no healthcare coverage (and probably many more who are underinsured, and many more than that whose coverage is based on employment which can evanesce in a moment), then that is tragic. (At the moment, btw, I am one of them. And furthermore I have family members whose health has been irreparably damaged due to the lack of healthcare coverage.) I am well aware of the shortcomings of the National Health in the UK and Canada (such as long wait times for elective surgery, lack of access to some of the latest pharmaceuticals and medical diagnostic equipment, etc.), however I still believe that "some is better than none". While I don't have specific and all-encompassing solutions for how to implement a fair and affordable single-payer healthcare solution (nor am I empowered to do so), intuitively I think there must be a way implement or integrate Universal healthcare coverage, at least as a “safety net” if not a replacement of private insurance, and that it should be done as soon as it practically can be. Healthcare coverage is probably not high on the priority list for those who are currently well-covered, but my sense is that the numbers of those people are steadily dwindling in the US (due to a variety of factors including a shrinking of the middle class) and that the topic will increasingly grow in importance. As to the idea that we don't have enough money to pay for it, I guess I would submit that we don't have enough money to pay for anything including an unpopular and possibly unnecessary Mideast war and its concomitant profligate spending, various missions to Mars and beyond, establishing a permanent base on the Moon (which I, along with much more noteworthy proponents such as Stephen Hawking, are in favor of). Still I think we must have an equitable and more inclusive national healthcare system.
Employment, Offshoring, Globalization, Free Trade, and Middle Class: We are all aware of the economic and social disruptions caused by the transitions from agrarian to industrial to "information age" technologies. Perhaps highlighting examples of the transition from horse-and-buggy to automobiles and railroads or blacksmithing to mechanized foundries serves some purpose to show that there have been past precedents that have been overcome. The implication is that this is a normal progression of socioeconomic evolution and therefore our current transition need not be feared. We can overcome. Perhaps. I am concerned however that what we are seeing today represents a larger shift, and a faster one than in past times. I don't know what percentage of the workforce was displaced when horse-drawn carts were replaced by autos, or over what length of time the transition occurred. My guess is that it was a relatively smaller workforce and a relatively longer time span. I fear that the offshoring of virtually all US manufacturing jobs (and now services industry jobs) over a span of 10 - 20 years that displaces massive numbers of workers, probably tens of millions, with direct or indirect economic impact on many millions more, may prove to be too much, too fast for this country to bear without some sort of upheaval.
The implication that workers displaced from one industry can retrain and seek employment in a new and growing industry may be flawed or even disingenuous. And even for those workers, typically the youngest and healthiest workers, who can realistically retrain, it can take many years. I recall the initial enthusiasm that many displaced auto workers (who worked on auto assembly-lines) had a decade ago who believed they could simply learn Robotics. Very few were able to do so. And some of those who did retrain found that their knowledge of robotics was no longer marketable when the factories that used robots mostly shut down also, because they were still in the field of manufacturing.
So where should such workers displaced from manufacturing seek employment? The common answer is the service industry. The implication is that there are many service jobs that pay equally or better than manufacturing. Obviously lower paying service industry jobs in food service, hotels, retail, etc., do not replace the middle class wages and benefits those workers once had. (And most spouses are already employed outside the home so the needed additional income cannot be achieved in that way.) Of course, professional employment, e.g. physicians, attorneys, etc., could be considered to be in the service industry and those positions pay very well. But it is entirely unrealistic to think that any but the smallest fraction of persons could or would even attempt to aspire to retrain to such lofty occupations. How about computer and information technology related jobs? The US Bureau of Labor Statistics and other governmental and business sources tout three occupations within the field of I.T. that are among the top ten fastest growing occupations projected over the next decade or longer. That may or may not prove to be true. Having worked in the IT field for over 30 years and having seen the exodus of tens of thousands of IT jobs to countries offering lower costs, the trend growing especially rapidly over the past five years, my sense is that IT is no longer a panacea for massive employment, and intuitively it may even be declining. I have personally known many former IT workers who have either changed professions, managed to purchase a small franchise store, or who anticipate an imminent collapse in IT employment and are studying Law or Medicine or are in Nursing programs, etc.
What other occupations are "safe"? Perhaps other occupations in various engineering disciplines or in other sciences such as microbiology, physics, pharmacology, etc. I would be proud to be a scientist as would, I think, most people. But it takes a very long time to become one, and I think there are relatively few open positions with the possible exception of Pharmacists and RNs. Meanwhile, one will either incur a great deal of debt or at the very least experience a large loss of savings. And for those people who own homes with mortgages, i.e. most people, and probably have children to put through college and possibly aging parents to care for, it seems a daunting prospect or even an almost impossible challenge to seriously consider such lifestyle changes in order to effect a major career shift. The majority of people simply cannot do it.
I must add that it is my sense that, apart from a few occupations which require a personal presence, e.g. nursing, firefighting, etc., most service occupations can now be performed remotely offshore just as IT and many engineering functions already are. Does anyone think that biomedical research cannot be done offshore? How about new drug development? They both are being done offshore now. Law? Contracts are being written and reviewed offshore already. Radiology? X-rays and MRIs are being read and evaluated by experienced radiologists offshore already. How about education? While I have not yet seen the offshoring potential for this field exploited or even considered as a candidate for offshoring, I don't know why it couldn't be. For anyone who has ever attended classes held in auditoriums with maybe 300+ students this should not be such a leap of one's imagination. In some classes I recall barely being able to see the professor unless the image was projected onto a large screen, rather like that at a rock concert or a sports stadium. And there is little or no interaction between the professor and the students. It was simply not practical. In my mind it is not at all implausible to envision classes being taught remotely, even internationally, possibly even replaying recorded lectures, of the best and brightest instructors from all over the world as a teaching medium in universities. Obviously this concept does not apply as well to elementary schools or below the university level due to the need for custodial care of children and adolescents.
My point is that there are virtually no occupations which cannot be performed remotely, including from outside the US. And there are absolutely no occupations which cannot be performed by non-US citizens inside the US if one considers that even occupations which require an on-site presence, when those positions can be filled by immigrants (presumably legal), due to the generous immigration laws in the US. Maybe that is a good thing in a macroeconomic sense. But it is a frightening vision for the prospects of employment for US residents and those of other developed (and by extension, more expensive in terms of cost-of-living) nations.
The consequences of completely unfettered free trade can be dire. The loss of a middle class can lead to class struggles, potentially violent ones. The worst situations exist where there is a small but extremely wealthy and powerful population with everything to lose, and a large but poor population with nothing to lose. Consider the recent Muslim uprisings in the ethnic enclaves of Paris and other parts of France. Consider the uprisings in southern Mexico, the uprisings in Watts (Los Angeles) and other similar events around the US during the 1960s and 1970s. Consider Northern Ireland, the Palestinian-Israeli issues, South Africa, perhaps even Quebec. While one can say these were all ethnic or religious in nature, I suggest that they were more likely economic in nature. In all of those examples there were perceived wide disparities between relative wealth and poverty. Does anyone think it can't happen here? Again?
As to the US consumer being unwilling to pay higher prices for goods produced in the US, I have two thoughts. One is that many US consumers buy cheaper products because they simply can no longer afford to purchase more expensive products manufactured domestically since those consumers have lost, or fear losing, their US-based jobs, or they are employed but earning lower wages, without benefits, than previously, due to the elimination of those jobs due to offshoring. As more products become manufactured overseas, fewer economically viable jobs are available in the US. It is a downward spiral, a "race to the bottom". That is not healthy for this country.
The second observation is that part of the reason for goods produced overseas being cheaper is based on currency exchange rates. Since there is no longer any "hard" basis (such as gold) for the valuation of any fiat currency, including the USD and the Yuan or Renminbi, any sovereign nation can declare its currency, or more precisely the exchange rate of its currency, to be whatever it chooses. If a country like China decides it is in its interest to increase exports, it can value its currency in such a way as to make exports extremely attractive to foreign buyers. With such artificially valued exchange rates it is virtually impossible for any nation to compete based on price for most products. (Possible exceptions could be products that cost more to ship from abroad than can be produced domestically, and perhaps for products whose shelf-life, i.e. freshness, depends upon very short delivery times.)
Free trade is based on the concept that each trading partner nation will produce what it is best at, and counterparty trading nations will buy those products and maintain a relatively flat balance of payments with the other. That clearly is not happening between the US and China and many other nations. Is it wise to continue a national policy which is not working? Is it wise to continue a policy which damages the US national interest? Is it wise to adhere to a theoretical axiom even if empirical evidence demonstrates that it is detrimental to the health of the nation? Is there nothing we can do about the potentially grave situation into which it appears we may be descending?
Angelo Mike's article states that (our situation) "will never be fixed by a government decree". (I hope I am not taking those words out of context.) But aren't tariffs examples of government decrees? Aren't currency valuations (or devaluations) examples of government decrees? Aren't industry subsidies government decrees? I don't profess to be a trained economist or academic like Angelo Mike apparently is, although I'd be proud to be one. However, it seems to me that when this nation had tariffs and subsidies to equilibrate the differences between the relative living cost differentials of different nations, their currency exchange rates, etc., the US did not have such an enormous imbalance of payments, such a loss of economically viable employment opportunities for the average American, or such a huge national debt. Are euphemisms like "protectionist" and "economic nationalism" so feared that it is preferable to have a national economy in such dire straits as we currently have rather than to have policies which our in our overall best interest?
The US Constitution says (something to the effect of, and forgive me if I misstate either the source or the text -- I'm not a Constitutional scholar either) that the purpose of government is to provide for the ... common defense, the common welfare ... of the people. If current laws are not providing for the common welfare of the people of the US, it seems to me that some adjustments could be made to certain international trade-related laws that would more adequately do so.
I think I’d have to side with Lou Dobbs on this one.
Published: December 14, 2006 5:59 PM
The best way for the U.S. to provide for the common welfare is, ironically, to NOT try to provide it through statist welfare, protectionist, economy-interfering plans, but to stick to the legitimate function of protecting individual rights, and otherwise letting the market function as it should.
Dobbs apparently can't see that.
Published: December 14, 2006 7:02 PM
The main point of this article I believe would be that the middle class is an artificial class, a class that appeared in the 20th century due to taxes and welfare, and should exist within the free market.
Indeed the way in which Dobb's begs for protection against outsourcing is the equivalent of grocery store owners begging for supermarkets to be banned. Hence everyone (especially the poor) are forced to pay more for groceries just to keep a few store owners happy.
In reality, though, outsourcing should be a godsend to the poor of the world. Allowing work to go to the poorest mean the poorest can start to earn their way out of abject poverty. Quite frankly I cannot help but think that the length of time developing nations have been entrenched by abject poverty is due to protectionist behaviour.
But, thanks to protectionism, it makes one wonder how much wealth the average Westerner has is in fact artificial. Quite frankly if private global corporate interests do crush various government protectionisms allowing true free global trade and many of the wealth of the average Westerner does indeed plummet then we'd find what the true wealth of a Westerner should be.
Published: December 14, 2006 8:49 PM
I am puzzled and perplexed by BDs post. It's not so much that I disagree (although I do, vehemently) it's that I cannot picture someone actually saying what it seems is being said. That it is said so often doesn't help me.
Here's what I find so shocking - just what is this offshore place that is referred to so often? From what is said about it, I can only conclude that it is a place with an infinite supply of instantaneously retrainable people whose lives are without value. Why do I say this? First, there must be infinitely many instantaneously retrainable people because, as soon as a manufacturing industry begins to exist here, suddenly, offshore is able to provide the entire workforce needed for that industry.
More importantly, consider the callousness with which these people are treated. Just how does a typical American lifestyle compare to a third world lifestyle? Compare middle class life in the third world to the life of those in America below the poverty line. One could reasonably think that opportunities ought to be allowed for these desperately poor people, but no, we are told, Americans must never be made to compete. Instead, the government must step in and ban these poor people from competing with Americans for jobs, and sentence them to a lifetime of hard labor without possibility of a better life. Meanwhile, Americans must be guaranteed a higher pay than their marginal value allows, by force. The American worker must be profited, forcefully, at the expense of the company, the potential workers in other countries and, oddly enough, the consumer, that is, the American worker. This puts me in mind of the author's observation that that healthcare is supposed to be made affordable by being provided by a bureacracy.
I say this despite the author and I once pursuing the same woman, and his outclassing me.
Published: December 14, 2006 10:07 PM
Unfortunately, many leftists think the same way as dobbs, and then call his book right wing and reactionary...go figure..Anyway,
BD, you and Lou Dobbs miss the point of globalization and it's very real benefits to the American poor and middle classes (where most of real benefits of capitalism go to). But let me ask you this question to see if you can catch that point...
Suppose in the long run of unrestricted globalization and free trade, lets say average American wages drop by over 50%, doesn't sound good yet...
but... at the same time, the average price of goods and services in America drop by over 95%??
Now if you think that's absurd, you better read George Reismann's article "Globalization the long run big picture" before you speculate.
Published: December 14, 2006 10:43 PM
I mildy disagree, Som. If protectionism has enriched some at the expense of others then the 'haves' would have an artificially high purchasing power. Similar, the artificially poor would have unfairly low purchasing power because they weren't allowed to compete and trade.
Surely, in a global free market, there would have to be an ultimaately loss of purchasing power to those who were wrongfully denied it. No?
Published: December 14, 2006 10:54 PM
I don't know that "all" of America's manufacturing jobs will move offshore. What I do know is that US manufacturing output is at an all-time high while manufacturing employment is about 5,000,000 jobs below its peak. A lot of those jobs have been replaced by the cruel hand of technology. Few protectionists (with the notable exception of Buchanan) have come right out and said that technological advances are a bad thing. They don't have to. They can have their cake and eat it too, because protectionism would slow or stop the implementation of new technologies. To paraphrase Stalin, "no machine, no problem".
Published: December 15, 2006 2:01 AM
Thanks for this commentary. I have never been fooled the re-packaged statism of Lou Dobbs. Camouflaging more statism with anti-administration platitudes is not real change. It is sad that so many people are fooled into believing that they oppose the status quo by favoring more government intervention through tariff schemes and border control schemes.
Published: December 15, 2006 6:03 AM
Angelo, thru Dobbs made it clear to people like myself who lack sufficient training in lazy-fair capitalism why it's wrong to interfere with markets (usually it's self defeating, counterproductive, costly and destroys freedom.) It was a different window to understand government interference into markets.
Because of economically ignorant politicians (and voters) the things government offers us are very tempting and difficult to resist (unionized government workers.) I've always held the view that unions were functional as long as government gives them no advantage.
Consider the current idolatry over Obama - Americans will easily choose aesthetics over skill or higher qualifications, regardless of how much this choice is counterproductive. But I'm not making excuses to give exceptions.
Thanks for the replies.
Published: December 15, 2006 10:18 AM
Mr. Rockwell was gracious enough to clarify, for me, that he and the "L.R.", above, are different entities.
To reiterate, I apologize for allowing myself to confuse the two. And, certainly, meant no real offense to Mr. Rockwell.
Published: December 15, 2006 5:12 PM
"Mr. Rockwell was gracious enough to clarify, for me, that he and the "L.R.", above, are different entities.
To reiterate, I apologize for allowing myself to confuse the two. And, certainly, meant no real offense to Mr. Rockwell." (Hoffer)
What was the difference between Geo Metro, Chevrolet and Suzuku Motors?
Is it wrong for a business to acquire a government (legal) advantage over it's competition? No, it's wrong for government to give it an (legal) advantage.
Published: December 16, 2006 5:32 AM
The only thing you really need to know about Lou Dobbs is what The Economist had to say about him in their November 2006 issue.
"Globophobic blowhard"
http://photos1.blogger.com/x/blogger/7944/562/1600/576279/lou%20dobbs.jpg
Published: December 16, 2006 12:19 PM
Old Lou and his crowd are lost in treating symptoms by making the disease worse. But that has been refulted by the article.
What has not been refuted by the article is the real reason the middle class is shrinking:
Hundreds of thousands to millions of individuals have increased their wealth by doing business overseas that they have propelled themselves out of the middle class; at least in the way Lou defines it.
Published: December 16, 2006 2:37 PM
Disclaiming poor Lou Dobbs because his arguments are circular, certainly doesn't make his theories the only socio-economic pariah.
Take AM's medical insurance dissertation. Yes, the cost of universal medical insurance is certainly a problem, most especially in the US, where the cost vs. survivability is twice as high as EU's model. EU itself is having problems with immigrant health care, because they have social problems with child care vs career time off, which requires immigrant labor, which requires universal health care, which makes them less competitive than the Americans who have no universal health care and the Chinese slave labor who have no health care at all!.
Well, there you go! Cut costs, turn everyone out on the street ala Les Miserables, chien mangent chien, and we'll have US a Grand Old Republic once again. Rubbish. A wise Japanese CEO once said, those who engage in this global race to the bottom will die a dog's death, (and if you've never seen a dog dying in plain view on a hot NY sidewalk, imagine that montage x 299,995,128).
The world of economics is nothing, if not riddled with inconsistencies. For AM to redux Lou Dobbs as "Marxist drivel" is rich. We're rapidly embracing a Saudi economic model, that is, pump, plump and party for an elite class, and day labor for slave wages for the rest of US. Anytime the US stock market completely reverses and runs up faster than 1999, from 4th of July until the 11/7 elections, right after CEO of Goldman Sachs was elevated to Treasury Chief, and his old brokerage firm just booked a record 25% profit, I would say that is defacto proof of, "a dysfunctional government working hand in hand with unfettered capitalism."
Most businessmen I know would kill for 25% GPM.
Anytime a former oil services company (HAL) always trading within a range according to the price of oil, then suddenly explodes to over 300% gains within only a few years, at the same time as their former CEO is leading an illegal war in Iraq, and granting that company $10B's in IDIQNB contracts, that is defacto proof of (above).
Most businessmen I know would kill for 100% YOY.
AM would have spent his time better to compare Dobbs against contemporary economic cheerleaders like NBR or WSJ, then conclude that economics is like a box of chocolates, except in the United States, where it's pretty certain what you're gonna get, which is Deficit Imperial Socialism, where anyone can participate in Capitalism's New Miracle (TM), as long as they have two nickels to rub together, $9.95 for transaction fees, and don't mind that the slot machines are rigged.
!Work Hard for Victory of the Elites!
Published: December 16, 2006 8:21 PM
I wonder what the sentiment will be, if in the future the Chinese elect to migrate to the U.S. instead of purchase goods from the U.S.?
This way they can continue to keep the Yan cheap and enjoy the fruits of Capitalism.
Heck, elite Chinese could take up residences in Greenwich and factories which employ Chinese workers could be set up in a corn field in Iowa.
Ah, but that's not the spirit of Richardo's Comparitive Advantage is it?
Published: December 17, 2006 7:51 AM
Telli's post is a perfect example of much mainstream nonsense that confuses mercantilism with capitalism. "Government working hand in hand with unfettered capitalism" is an oxymoron. Blaming capitalism for problems caused by government interference is so ridiculously passe, you'd think nobody learned anything new since Keynes. Perhaps they haven't.
And yes, there is much inconsistency in mainstream economics, and the Mises Institute spends quite a bit of time and effort trying to straighten people out on those inconsistencies.
Published: December 17, 2006 12:01 PM
Well, Lou Dobbs is one of the most "economic illiterate" I have ver heard. Mike, I wonder why you wasted your time reading his so-called book. Lou does not know the difference between demand and supply ( and other naive comments he makes i.e uninformed). Most laymen think they understand economics (better than those who sat in university and who thought hard about understanding economic concepts and their application to real economic problems), only if they knew how wrong they are.
Please Mike do not waste your time reacting to such obtuse people. On CNN, Lou Dobbs is of course doing disservice to the average American. He cannot follow through a logical economic argument to its end as he lacks an "economic toolbox".
Published: December 19, 2006 9:42 AM
Excellent article. I have becomed alarmed at the popularity of Lou Dobbs after reading a profile of him in the New Yorker. Unforutnately, Dobbs is merely part of a trend in the news/commentary business to adopt opinions that will boost ratings. In other words, tell people what they want to hear.
And this is why his economic theories make no sense. People want to hear that their problems are not of their own making, and that they can have more money without more work and lower taxes without sacrifice. TANSTAAFL.
The burdened "middle class" Dobbs panders to are his viewers. Wealthy surburban Americans with good paying jobs, who are spending their income faster than they are making it. They have refinanced their houses several times and are now facing negative equity in a downsizing market. They have failed to fully fund their 401(k) programs and are facing a dismal retirement. They lease brand new gas hungry SUVs and complain about the price of gas. And they max out their high-interest rate credit cards by buying Chinese made junk at big box stores and wholesale clubs. And they get fat eating out 5 nights a week at chain restaurants, charging each meal on those credit cards (which in turn are paid off through refinancing their homes).
For a lot of these folks, life is a treadmill, and the faster they run, the further they fall behind. Rather than make hard choices and sacrifices in their own lives, they want to hear that its "somebody elses's fault".
Hugo Chavez and a host of 3rd world politicans, know full well that it is easy to get elected by blaming people' problems on the U.S. Goverment. When the elected offical inevitably fails to solve their country's problems, they can point the finger at Uncle Sam. It is a nice gambit, because they always have a fall guy.
In the same way, Dobbs uses his own boogeymen to frighten his viewers (and readers) and since the Federal Goverment is never going to go away, Dobbs always ends up being "right" in the minds of his viewers.
What is depressing about the Dobbs situation is that it is clear (to me, anyway) that Dobbs does not really believe the positions he is taking. Rather, they are carefully crafted (and no doubt audience-tested) to appeal to a large viewing audience and boost his own ratings. His own pay is based upon his own ratings, so the more he tells people what they want to hear, the more money he makes.
How Capitalist!
Regards,
--Bob.
Published: January 11, 2007 9:23 AM
You're a college student at Marymount Community College lecturing Lou Dobbs (who has an economics degree from Harvard) on his economic understandings?
Indeed, Lou Dobbs does think you're a fool.
Published: April 4, 2007 1:21 PM
Lou Dobbs is wrong about outsourcing and illegal immigration. I'm not even sure he really believes what he is saying. He used to be a typical conservative Republican, but he took a gamble on reinventing himself as a "mad as hell" populist. I think he's watched the movie "Networking" one too many times, because he's a modern-day Howard Rourke. I think Dobbs is just another cynical hack whose only concern is how fat his paycheck is (not that that's necessarily a bad thing). What I don't like about Dobbs is his fundamental dishonesty and cynicism. Considering that he actually does have an economics degree, that just makes me even more suspicious of him.
Published: May 11, 2007 7:25 PM
I find it amusing how people who are obviously not in the belueagered (middle class) what used to be the working class,comment on immigration and how they have never seen americans picking fruit and veggies, did ya think it might be because the program wasnt about the poor misteated americans its about the poor mistreated illeagles!!!personaly i want to know why if we have over 12000000 illeagles here why dont we have enough to pick the fruit and veggies?? they dont want that job either they want my job (construction , mechanic , factory worker)and as they flood the market with cheep substandard labor the wages drop (dont tell me it doesnt i dont need a gvmnt study Ive lived it,and am fighting it now ,thats what realy happens in the real world
Published: June 7, 2007 7:01 AM
Numbnuts, that's why everyone has been suggesting that Lou Dobbs ought to know better than to spew the nonsense that he's spewing. Every profession has its quacks. Paul Krugman has a Ph.D in economics, and he's full of crap as well.
Published: June 23, 2007 7:21 PM