The Curse of Nationalism

by Don Boudreaux on July 9, 2011

in Myths and Fallacies, Trade

Here’s a letter to the editor of

How distressing that you and three-quarters of your readers believe the proposition that, as you put it, “an economy cannot succeed without a big manufacturing base” (Economist Debates, June 28-July 8).

While Jagdish Bhagwati argued splendidly against this proposition – and against Ha-Joon Chang’s defense of it – an elementary flaw in your proposition was only barely alluded to, namely, the ambiguity of the word “economy” as used in your proposition.

We might agree that prosperity requires that a great deal of manufacturing occur somewhere.  But as long as there is “a big manufacturing base” in the world economy, what need is there for “a big manufacturing base” in the economy of each political entity classified as a nation?  If a nation has such a substantial comparative advantage in services that it satisfies with imports so many of its demands for manufactured goods that no manufacturing takes place within its borders, where’s the harm?  Answer: nowhere.  What Prof. Chang, you, and most of your readers see as harmful is a mirage created by the fallacy, in a world with trade, of mistaking a nation for an economy.

Consider Professor Chang’s own household.  It is, I’m sure, fully specialized in services; it manufactures nothing.  Yet the ‘Changese,’ as we may call Mr. Chang and his family, consume countless manufactured goods produced by the non-Changese.  The Changese acquire these manufactured goods in exchange for their services.  Does Mr. Chang fret over the fact that the Changese economy has no “manufacturing base”?  I’ll wager not.  So why does he insist that for each political entity called a “nation” to prosper it must have its own manufacturing base?

Donald J. Boudreaux

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Craig Morrow July 9, 2011 at 7:59 am

Prof. Boudreaux,
Trying to understand the full cycle. Chang is trading “intelligence, knowledge and information” for scarce natural resources recreated as useful material products.

In the end doesn’t the latter have a higher value due to “scarcity” than the former when disseminated?

Please help to understand.
Thank you, Craig

Don Boudreaux July 9, 2011 at 8:01 am

Would you prefer to work as a Cambridge University professor or as, say, a neurosurgeon than to work on an assembly line that produces ball-bearings or plastic caps for shampoo bottles?

Craig Morrow July 9, 2011 at 8:20 am

If the quantity of Cambridge professors, neurosurgeons is sufficient to employ a nation, and the outlook for recurring demand is promising, then so. Exporting these value added services is essential to capitalizing on their value in quantity.

If the quantity of these service jobs is insufficient for full employment, because of the inability to export, then we have high unemployment or underemployment. Which is the case now and forward in the more developed countries (US, UK, etc.)

Still don’t understand how full employment occurs with a population recalcitrant to learn exclusive trades. It seems a repetitive manufacturing is healthy for some individual’s livelihood and every economy.

Bob July 13, 2011 at 12:33 am

Who says you have to employ people in manufacturing? I have way too many things around the house to do them all myself. Unfortunately, my wife’s second income as a hairdresser (non-manufacturing) produces enough in taxes to hire all kinds of people to help us get stuff done. But alas, the gov’ gets her first cut, takes 35%, and barely leaves enough to pay for the kids’ college. So now we have to confiscate the earnings of the childless to pay for my kids’ college. And who wants to hire an accountant to keep track of all the nanny taxes, anyway? It’s easier and cheaper to just give up and watch the guys beg on the street for food and work.

Tim July 9, 2011 at 8:31 am

Certainly the former; however, not everyone can hold such employment. What happens to people in an “education” economy who do not possess the skills requisite to hold those jobs? Are they simply supposed to move to the places where they can obtain work manufacturing ball-bearings? After all, wouldn’t that be the logical next step in the argument that political borders are irrelevant.

Rayray July 9, 2011 at 8:40 am

Labor jobs are pretty fun–laborers are generally more entertaining than either of the people occupying the jbos you cited, and I’m more likely to find a free market libertarian in the third job than the first. I’d have no problem working an assembly line; I’d moonlight as a safe cracker, with a crew of misfits whose quirks would become oddly advantageous in our adventures.

Another Dave July 9, 2011 at 7:48 pm

Would you prefer to work as a [part-time burger flipper at McDonald's making minimum wage with no benefits,] or as, say, [a shopping cart collector at Wal-Mart] than to work on an assembly line that produces ball-bearings or plastic caps for shampoo bottles?
Fixed it.

Upton July 9, 2011 at 8:23 am

For those who would trade “useful material products” for Chang’s “intelligence, knowledge, and information” (such as Cambridge), the answer is no. No good or service can be said to be categorically more valuable than any another (see the water/diamond paradox). Only the subjective wants and needs of individuals on a case-by-case, minute-by minute basis determine valuation. After all, one man’s trash is another man’s treasure. As to the scarcity of the former, as far as I can tell, intelligence, knowledge and good professors are some of the scarcest things around.

Kirby July 9, 2011 at 8:17 am

Luxembourg is a testament to how poorly nations can do without manufacturing anything.

ohioralph July 9, 2011 at 9:11 am

Kirby, after googling Luxembourg I would appreciate comments of greater insight into this country. It seems to support the premise that borders are irrelevant as well that government is irrelevant.

Kirby July 9, 2011 at 4:32 pm

“Services, especially banking and other financial exports, account for the majority of economic output”
“Luxembourg’s stable, high-income economy features moderate growth, low inflation, and low unemployment”
“Per capita GDP: $81,383″

was the point I was looking for

Dan J July 9, 2011 at 7:02 pm

Location, location, location……Nice place sandwiched in the heart of Europe.
What 500,000 people….. Size of Tucson, AZ. Point of this is only to say that it is difficult to compare Luxembourg to a nation the size of 300million.
Banking? What….. Over 200 yrs for that area to be into finances?

Kirby July 9, 2011 at 8:31 pm

Location, location, location:
What else is in Europe?
former Soviet Union

What is in the middle of America? Iowa, Arkansas, Texas, economic powerhouses all

What is in the middle of China? The plateau of Tibet: uninhabitable.

50 years ago, only America and Europe were powerhouses.
Now, Japan and China are as well (For those of you without a map, they are on the opposite side of the world from Europe and the US), and all of the E7 are outside Europe and the US. Location doesn’t mean much.

Kirby July 9, 2011 at 8:54 pm

Greece is also in Europe.
Iowa is in the middle of America.
The Plateau of Tibet is in the middle of China
Oh, and of course all of the E7 are in existing powerhouses.

Oh wait….

Dan J July 10, 2011 at 5:47 pm

Greece location…… Baltics region…. Nice and prosperous there….
Russia is a monster of it’s own sitting on the edge of the no-so prosperous eastern block. It’s resides next to……. Mongolia….. Outer regions of china…. N.K……. All that prosperity around it is sure to rub off….. I am not discounting what you typed, only saying that malfeasance of a govt can be offset by the places around it that fare a little better and have a more open trade market.
How long did it take for Detroit to finally find itself in a disastrous hole? 50yrs of corruption and horrible mismanagement. Yet, it is still more easily recoverable due to it’s surroundings.

dsylexic July 11, 2011 at 8:22 am

location is nothing:

australia? in the bondoocks

hongkong and singapore ? mega swamps till 1960s

Ombibulous July 9, 2011 at 10:53 am

It has the highest gdp per capita in the world and is a tax haven. A good oasis from an amuck America in stage 3 terminal fiat debasement syndrome:
stage 1) debase your subjects’ reality. (Abe Lincoln through Obama freeing slaves / bringing hope & change) 2) debased its currency (Woodrow Wilson & FDR especially gifted) 3) debase your subjects (mob hysteria over OJ, Casey Anthony cheering drone strikes and missile launches at Qaddafi’s kids)

Fortunately all this predatory behavior is mitigated by inventions & ingenuity heroes. Rapid prototypers & 3D printers for example.
As soon as they can copy a bottle of Jack Daniels with those printers, I’m buying one.

Paul Andrews July 9, 2011 at 8:45 am

I think the focus on manufacturing is misguided, but I would argue that a nation has a strategic interest in producing a certain set of goods and services locally, to enable it to cope with disruptions to international trade due to war or other reasons.

This has nothing to do with manufacturing per se. After all, much of manufacturing produces goods of no strategic value.

Conversely, many services are of strategic value. Goods are not inherently of greater strategic importance than services.

MWG July 9, 2011 at 1:30 pm


Bob July 13, 2011 at 12:46 am

To cope with war (if you can’t build your own missiles), you hire mercenaries to stop whomever is blocking your ships from getting you your cars and stereos. Money solves everything, which is the whole point. The concept of cooperation is what is essential, not the specific instances of cooperation calculated by some agent who thinks they can predict the ever-changing needs of millions of people simultaneously.

Besides, almost no one has enough of everything you need to build what you need for war-time, so the manufacturing is always at risk wherever the resources have to be imported in the manufacturing chain. It’s probably cheaper to buy finished goods and the guards to secure the delivery than stockpile everything need to be self sufficient on some rainy day in October when missiles start flying.

DG Lesvic July 9, 2011 at 8:48 am

Prof Boudreaux,

Well said, and without any curves or equations.

Glad to see that you’ve learned your lesson, and don’t thank me.

Seeing the fruits of my labor is recompense enough.

muirgeo July 9, 2011 at 9:37 am

Professor Let Them Eat Cake wrote,

“If a nation has such a substantial comparative advantage in services that it satisfies with imports so many of its demands for manufactured goods that no manufacturing takes place within its borders, where’s the harm? ”

If that nations service comparative advantage came about because it set up it’s institutions to elevate the living standards of workers, to improve the environment of all, to educate the masses and take care of the poor then it makes no sense now to abandoned those principles in search of cheap labor to benefit a minority at the expense of the majority. Only someone blinded by the plight of 15 million unemployed and all else that is going on in our economy and our country could ask WHERE IS THE HARM? Really??? Where’s the harm? …. go walk the streets….they are filling up with criminals, the homeless, desperadoes, protestors and angry mobs…

Subhi Andrews July 9, 2011 at 12:26 pm

…. go walk the streets….they are filling up with criminals, the homeless, desperadoes, protestors and angry mobs…

Cut the hyperbole dude.

Only someone blinded by the plight of 15 million unemployed and all else that is going on in our economy and our country could ask WHERE IS THE HARM? Really???

Learn some humility.

muirgeo July 9, 2011 at 2:43 pm

So was that supposed to convince me that things are better for most individuals because we’ve opened up “free trade”.

Again… seriously…. where’s the harm?… were is the benefit?

Free trade as it is set up is set up to benefit some.. the few… over the many. The results are clear.

Very specifically Greg are you claiming our economy is doing good… is in great shape? You don’t think we could be doing a lot better.

muirgeo July 9, 2011 at 2:44 pm

Oops… that was a reply to Greg Webb

tdp July 9, 2011 at 10:56 pm

Johan Norberg. “In Defence of Global Capitalism”. Read it. The first two chapters are free on his website and they have copious evidence showing that capitalism and free trade have worked wonders at improving life in the developing world.

muirgeo July 10, 2011 at 9:57 am

dude…WE… don’t live in the developing world. We may be regressing back to a third world nation . But that’s kinda MY point.

Dan J July 10, 2011 at 5:48 pm

That’s right, thanx to growing govt.

Greg Webb July 9, 2011 at 4:54 pm

George, you said, “So was that supposed to convince me that things are better for most individuals because we’ve opened up ‘free trade’.” No. The first part of my post was to get you to stop calling Professor Boudreaux silly names since he has not called you a silly name in this thread. You do not prove your point by doing such things. You tactics are merely those of the anarchist mob…no thinking required.

You also said, “Free trade as it is set up to benefit some.. the few… over the many. The results are clear.” Yep…and the results are good. You, as an individual, sell your services to families desiring pediatric care. The government does not direct you to do so, and the government does not coerce families into hiring you. So, you do things that benefit just you and not the many…how selfish of you! Freedom of choice is the goal. Let individuals determine what is best for them and not some central planner in Washington DC.

What would you do if the health czar decided that pediatric care is not needed and issued some administrative rule that required women to give childbirth naturally as they did for thousands of years. And, the health czar also decided that only the strong should survive anyway and that pediatricians were impeding nature and causing a massive overpopulation of the planet and resulting in — God forbid! — climate change! Let individuals decide — and if they decided that pediatric care was not necessary, then you would have to use your talents at something else that served a sufficient number of consumers so that you could make a living.

Have you read Adam Smith’s “The Wealth of Nations”? If you haven’t, then you should. In it, you will learn that through the selfish pursuit of his or her own self interest, the butcher, the baker, and the brewer were all better off. It is the simple story of comparative advantage and how it benefits us all. Good reading!

You said, “Very specifically Greg are you claiming our economy is doing good… is in great shape? You don’t think we could be doing a lot better.” I never said any such thing. In fact, I have argued the opposite. That government intervention has created a huge level of mal-investment in commercial and residential real estate. I have also said that the government is actively preventing individuals from making sound economic decisions about their own best interest through government’s continued intervention in markets, which is keeping the economy from recovering as it should. Government, and all the Hoover’s of the world who think that he or she can save the world if only everyone else did as he or she was told and turn over all their money, should shut up and get out of the way of individuals from freely choosing what is in their own best interest. Comparative advantage rocks! Mercantilism, Feudalism, Socialism, and all other kinds of statism, including the anarchist mob, suck!

Dan J July 9, 2011 at 6:31 pm

Muirgeo and progressives despise free choice. An aristocratic-type person who is smarter than most others should be determining what others can have or do. Muirgeo and
Progressives should be able to limit individuals salt intake, smoking, alcohol intake, travel to forests, energy use, technology use, etc.,….. The sheep of the US must have know-it-alls like himself making dictates on consumption. Types of technology to enter the marketplace must go through govt approval first. Only they can determine whether the product is good for the people.
You are authoritarians and a danger to man, progressives.

muirgeo July 9, 2011 at 7:08 pm


You are simply taking the side of protecting the political class we both agreed needs not protection. Trade agreements/policy and Medicare part D are written by lawyers and lobbyist who have way more say in the outcome of government policy. You need to stop acting like things are set up to be fair for each individual. They are not and THAT is what I am speaking to.

muirgeo July 9, 2011 at 7:17 pm

“That government intervention has created a huge level of mal-investment in commercial and residential real estate.” Greg

Greg that borders on intellectual dishonesty. WallStreet and its lobbyist and paved policy from the over turning of Glass Steagal, to increasing leverage amount to the Feds free money policy….that’s just such an unfair statement. If the government was paying even a little attention to what the man on the street sees as common sense policy would be vastly different. Again, I just see you as protecting the political class by renaming it the government when in fact it’s all those private individuals who surround you there on Wall Street.

muirgeo July 9, 2011 at 8:01 pm

“The sheep of the US must have know-it-alls like himself making dictates on consumption.” Dan “sellout” J

No I am not a supporter of Edmund Burke… interestingly Keynes was somewhat in favor of the ruling elite.

No I am pure and simple still a believer in a people lead democracy and nothing more… what you say I am has no bearing on reality… its said by your unthinking brain to make your upset stomach feel better… nothing more.

Kirby July 9, 2011 at 8:51 pm

Muir, I hate to break it to you but the man on the street thinks that high taxes discourage spending.

Greg Webb July 9, 2011 at 9:02 pm

George, you said, “You are simply taking the side of protecting the political class we both agreed needs not (sic) protection.” No, I’m not. The political class advocates for greater power for, and more spending by, the federal government. I advocate limiting the federal government to the powers expressly stated in the Constitution and limiting its spending as well. I believe that you advocate a similar position as the political class. George, your heart is in the right place when you say that you oppose the political class…but your head is not when you advocate effectively giving them more power and spending authority by refusing to limit governmental powers.

You said, “Trade agreements/policy and Medicare part D are written by lawyers and lobbyist who have way more say in the outcome of government policy.” Yep. And, they write those things to take care of friends and family, and not anyone else.

You said, “You need to stop acting like things are set up to be fair for each individual. They are not and THAT is what I am speaking to.” I never said nor acted like they were set up fair for the individual. Actually, I have been saying the exact opposite, which is why I advocate limiting governmental power and spending. Why do you advocate giving more power and allowing more spending by the political class, who, by definition, are running the government?

Dan J July 9, 2011 at 9:55 pm

Keynes was in favor of a ruling elite? Explains your admiration for him.

Greg Webb July 9, 2011 at 10:14 pm

George, you quoted me as saying, “That government intervention has created a huge level of mal-investment in commercial and residential real estate.” Then, you falsely accused me by saying, “Greg that borders on intellectual dishonesty.” No, it does not. Do not falsely accuse me. Always provide a logical, coherent argument supported by objective, verifiable evidence. You should read, among others, “Reckless Endangerment” by Gretchen Morgenson, a New York Times Reporter, and Joshua Rosner. What I have said is correct. And, I work in the industry and previously the government so I directly know something about what I speak.

You said, “WallStreet and its lobbyist and paved policy from the over turning of Glass Steagal, to increasing leverage amount to the Feds free money policy….that’s just such an unfair statement.” I’m not sure what you mean by this statement. The Glass-Steagal Act was irrelevant to the recent economic crisis. Government intervention, designed to promote home ownership by relaxing prudent lending standards was the cause of the crisis. Those policies artificially stimulated demand, and home builders responded by building more homes funded by bank loans. Both the banks and home builders responded to incentives by the government…and then realized that they had created too many homes given true demand. Prices of homes fell significantly…and government officials started lying by blaming their former buddies at Wall Street firms like Goldman Sachs. But note that those the politicians were criticizing Goldman, they made sure that Goldman was bailed out. That, in a nutshell, is the Baptists, Bootleggers, and Bailed Out Bankers story.

You said, “If the government was paying even a little attention to what the man on the street sees as common sense policy would be vastly different.” Not so. Most of the men on the street were paying attention to government incentives and responding to artificial demand by “flipping that house” as advocated on a variety of television shows. I had a friend doing that. He lost everything and is now bitching about how the government should have been protecting him…from his own idiocy, I guess. Previously, he day traded…until the market turned against him and he went bust then as well. But, some people just don’t want to work and are constantly involved with “get rich quick” schemes. Sorry, but I don’t want to bail him out like the political class did with my money to help their crony capitalist friends at Goldman.

You said, “Again, I just see you as protecting the political class by renaming it the government when in fact it’s all those private individuals who surround you there on Wall Street.” I am not on Wall Street. The political class is the government. That’s why they have never worked in the private sector…except at Wall Street investment banks…like Obama, and Paulson, etc. Goldman and others like them are crony capitalists…and that is why they pay their friends like Obama so much in campaign contributions…they are willing to accept criticism as long as it results in new regulations that effectively reduces competition. Competition is the enemy of the politician and the crony capitalist because they are both elitists that desire both adulation and control. You advocate the policies that help the political class and their crony capitalist friends. Why?

muirgeo July 9, 2011 at 10:20 pm

To Dan J,

“Keynes was in favor of a ruling elite? Explains your admiration for him.”

So was Edmund Burke… I disagree with Keynes and Burke but do advocate still a people lead democracy. I am a little on the fence though. The if some how you could guarantee the brightest minds with the best intentions would make rules for the best of all that would be superior but it’s kind of a pipe dream like libertarianism.

So again I am an advocate of individuals coming together democratically to control the government. It’s far from perfect but its the best thing we’ve seen yet. If libertarian can sway enough people that they’ve got a great idea then so be it but most people understand what a libertarian society would be like so most but the wealthy and some unthinking middle-classers are against it.

Greg Webb July 9, 2011 at 10:49 pm

George, you said, “No I am not a supporter of Edmund Burke… interestingly Keynes was somewhat in favor of the ruling elite.” I know that you do not support Edmund Burke. His most famous book is “Reflections on the Revolution in France” in which he criticized the anarchic mob and its leaders like Jean-Jacques Rousseau, a murderer. And, Lord Maynard Keynes was part of England’s political elite. It is not surprising that you support Lord Keynes, but not Burke. Keynes believed that government should be run by the so-called “elite” for the betterment of “the people.” Burke advocated for freedom and individual liberty. He supported the American Revolution, but not the French Revolution of the anarchic mob.

You said, “No I am pure and simple still a believer in a people lead democracy and nothing more.” It is easy for one to say that he is looking out for the people’s best interest. The leaders of the French Revolution said so too. Then, they murdered them by the thousands. I believe in a constitutional republic where the government’s powers are limited and the individual’s freedom protected. It appears that our argument is the same one that Burke discussed in his book. I support the American Revolution, which worked, and you support the French Revolution, which resulted in poverty, economic hardship, and death for thousands, and which ultimately lead to despotism.

Dan J July 9, 2011 at 10:52 pm

I am concerned over your hope that a benevolent wise few could be the end-all legislators to rule over the many. I recognize that you are somewhat in realization that it is unlikely, but I fear you think that it is possible. It is impossible. Even the wisest and most benevolent cannot ever know what is best for hundreds of millions, let alone several thousand. He/she will only restrict and impede liberty.
I do not despise Keynes, only recognize his theory, as applied, is incorrect. In a vacuum of a perfect setting, it may work. The effect is minimal, and ultimately used for corruption, as FDR and Obama has done.

ArrowSmith July 9, 2011 at 6:09 pm

Hey muirbot – how about the 10s of millions who have benefited because of the technology revolution? Far more have benefited then not from it all. Of course it’s not perfection, but far better then the central planning that plagues failed states like Belarus.

muirgeo July 9, 2011 at 7:22 pm

Yes…. I am all for it. I support massive increases in technology but we need to share those results and not let the hoarders pretend they were responsible for all of it. But the public researcher who gets a pittance and the tax payer as well see all the gains in productivity go to the paper pushers on Wall Street and the Boards of Companies who’s members had nothing to do with establishing those companies.

We are allowing society to be taken over by an insane bunch of sociopaths who care not one bit about your ideology except in so far as it provides them cover.

Greg Webb July 9, 2011 at 10:18 pm

George, that is not true. Michael Dell sold computers that he built from parts out of the back of his car while he was a student at the University of Texas. Because of his innovation and hard work, he has become wealthy, while at the same time helping individuals save money instead of buying higher-priced IBM computers. If IBM had used its political power, as many other crony capitalists do, it would probably still be the leading selling of computers today. Of course, consumers would have been poorer, but think of all those great jobs at IBM and Texas Instruments we could have saved.

muirgeo July 9, 2011 at 10:26 pm

Sure Greg there are plenty of wealthy people who are good and deserve their wealth… but they have usually done something productive as opposed to these corporate raiders and Wall Street goons.

Interestingly the people who have been truly productive… that went into it to do good and not just make money are the ones who understand their debt to society.

My dad was a multi-millionaire… he was one of the good ones…. except for a bad gambling habit… but that was his choice.

Greg Webb July 10, 2011 at 12:12 am

George, I am pleased that you had all the advantages of a father that had earned millions of dollars. Now, how come it is always those children who had all the breaks in life that insist on bigger government? And how come those who didn’t have those advantages prize their freedom as individuals above everything else? I think that distinction, more than anything else, says it all.

George, I hope that you and your family are having a wonderful vacation!

Dan J July 10, 2011 at 12:29 am

Gregg Webb is is destroying Muirgeo’s arguments, one after another. George is likely to never accept thee truth of free markets and individual liberty being far superior to collectivism, but another nail in the coffin of progressivism is added.

Dan J July 10, 2011 at 12:32 am

The technology is being shared, but the creators are being compensated, rightfully so. As opposed to the foolish idea of govt bullies forcibly taking and distributing.

Craig July 9, 2011 at 7:35 pm

“Free trade as it is set up is set up to benefit some.. the few… over the many. ”

Well, then. That’s the problem, isn’t it.

If it is set up to benefit the few, then it isn’t really free trade at all. It’s managed trade — just with more countries than before.

Kirby July 9, 2011 at 8:44 pm

Mhmm, the majority favored over the minority.
my BS detector….
it is telling me that 5%<50%? How could this be?

muirgeo July 9, 2011 at 2:46 pm


Really? I’m made to seem the irrational one. Yet you guys are hyping how well free trade is totally unconcerned with the state of the economy.

Again… tell me what is the benefit here. Are you claiming this is a good economy or it’s bad not because of free trade but something else.

I don’t think I am the inconsistent one… yes and watch some news protest are breaking out around the world and they will come for August 2nd.

The Other Tim July 9, 2011 at 5:14 pm

Look, if you actually think you can take down David Ricardo, go right ahead and try. If you can, you’ll make a name that’ll be in history books for ages. If you can’t, you’re just a fool who needs to shut up.

It amazes me how openly protectionists are able to suggest that we ought to segregate 300 million mostly-white anglophones from interacting economically with the rest of the human race. If it were any other topic besides economics that we were discussing, we’d call that “being a bigot.”

muirgeo July 9, 2011 at 7:26 pm

I don’t need to take down David Riccardo… I need to point out 3 things about him and his theory that were required for it to work:

1) Trade must be balanced
2) Capital does not cross borders
3) employment is full for both countries

Are we practicing Ricardian free trade?

ArrowSmith July 9, 2011 at 7:32 pm

hey murigeo – trade is balanced. We buy their physical goods and they buy our treasuries. You seem to have a problem with that.

muirgeo July 9, 2011 at 8:05 pm

David Riccardo would properly take off a glove….one finger at a time… and bitch slap you with it for being stupid. Now stop that.

They make new things from scratch and we give them our grandmothers… that’s not balanced. We will soon be out of grandmothers… You really pissed David off with that.

The Other Tim July 9, 2011 at 8:16 pm

Trade is tautologically always balanced. For trade to be imbalanced one party must give without receiving, which is a transfer, not a trade. That is to say, trade which is not balanced is not trade.

As far as capital crossing borders, free trade does not require immobile capital. Ian Fletcher’s protestations notwithstanding, mobile capital merely changes a nation’s comparative advantage, it does not invalidate the principle that a nation becomes most wealthy by pursuing the comparative advantage to the exclusion of the comparative disadvantage.

As far as full employment, imbalances between quantity of a commodity supplied and quantity demanded are always and everywhere a consequence of prices being out of equilibrium. Employment is a consequence of high wages, not trade.

Beyond which, even if we accept for the sake of the argument that these criteria are valid, they apply just as much to the myriad upon myriad “imbalances” in interstate, intercity, and interpersonal trade. Meaning you’ve entirely missed the point of the first post. If free trade between American states isn’t a problem, but free trade with, say, China is, then you aren’t objecting to free trade, you’re objecting to the Chinese.

The Other Tim July 9, 2011 at 8:32 pm

Oh, and while we’re at it, you’re a Krugman fan, right?

As much as I disagree with Krugman on macroeconomics, he wrote some fantastic things about how idiots complain about free trade over the years. Take this one, for example:

“I have wrestled with this issue a lot in recent years because Mr. Lind [you could easily cross this out and write in Muirgeo here] is by no means alone. He is only a new exemplar of a common type: the basically literary intellectual who has learned about economics from reading The Atlantic and watching McNeil Lehrer, and who despite being unwilling to probe more deeply – by, say, looking at a freshman-level textbook – feels ready to start pontificating about the world economy.

Why do basically uninformed people feel the need to make such pronouncements? I actually don’t think that the answer is special interest politics. Oh, there are a few well-known Japan-bashers and anti-NAFTA advocates who are in effect hired guns, who run so-called think tanks that reliably think thoughts that conveniently fit the interests of their sponsors. But I believe the basic force driving the rhetoric about globalization that is now so pervasive in economic debate is something more subtle, yet perhaps more powerful: the fashion sense of policy intellectuals.

After all, stories like Mr. Lind’s are exciting. If you attribute the economic woes of American workers to the global mobility of goods and capital, you can tie practically everything up in one glossy package: growing world trade, the rise of multinational corporations, the decline of the West, the Asian economic miracle, even the fall of Communism (which has made the world safe for global investors). Such stories have a sweep and glamor that is rare in economics – indeed, the way that talking about globalization allows one to combine a vision of vast global struggle with a sense of exotic travel brings to mind the early James Bond movies. And such stories have the additional advantage of allowing the writer or speaker to sound immensely sophisticated (because everyone knows that sophistication is measured by the frequency with which you can use the word “global”).

Not surprisingly, people who are good at telling these stories have done very well in the world. Some have written best sellers; some have become internationally famous pundits; some have risen to Cabinet rank and beyond. I believe that the romantic thrill of stories about globalization is the main reason why such stories get told and repeated. Michael Lind is neither the first nor surely the last intellectual fashion victim, seduced by the glamor of global visions into trying to sound like an expert about a subject he does not understand.

Alas, the world economy is a stubbornly unromantic subject, at least in the hands of irritating professors like myself. Annoyingly, we insist on asking not whether a story about globalization is sexy or makes the teller sound suave, but whether it is true. And the fact is that most of what would-be sophisticates say about globalization isn’t true.

It is important to focus on these real issues. But I believe that we cannot do so effectively unless we clear away some of the nonsense with which the whole issue of international economics has become infested. We need to end the romantic infatuation with the idea of globalization, the easiness with which anyone who uses the phrase “global economy” passes for a man of great sophistication. I have tried carefully explaining economic concepts like, say, comparative advantage; it doesn’t work. What does work, sometimes, is ridicule. If you can make someone who imagines himself to be a deep sophisticate look silly, sometimes it gives him – or at least someone else who might be tempted to follow the same route – pause.

In that cause, let me offer to you a word. Some of you have probably heard it already. It is not original; it is what Washington friends of mine use to describe the kind of rhetoric that poor Mr. Lind has fallen into. The word is “globaloney. ” Try using it on people you know: you may be surprised at its impact.”

Methinks1776 July 9, 2011 at 1:52 pm

go walk the streets….they are filling up with criminals, the homeless, desperadoes, protestors and angry mobs…

Oh, for God’s sake! move out of your crack house in Compton, Muirdiot. Problem solved.

Greg Webb July 9, 2011 at 1:56 pm

George, you addressed Don Boudreaux as, “Professor Let Them Eat Cake” in an attempt to denigrate Professor Boudreaux and his argument, while making self-congratulatory statements indicating that you care for others. But, the opposite is true.

My experience with certain law professors, as well as certain other types of professors, is that they try to give the appearance of caring about their students while abusing the Socratic method and misusing the case book method to make learning difficult and keep otherwise qualified people out of the profession. And, the common traits of these law professors is that they were elitists and statists. I can assure you that Don Boudreaux works to make learning economics and the law easier. You might want to try understanding rather than using statist mob talking points. Also, don’t quote Rousseau. He was a mob demagogue and murderer.

You also said, “If that nations service comparative advantage came about because it set up it’s institutions to elevate the living standards of workers, to improve the environment of all, to educate the masses and take care of the poor then it makes no sense now to abandoned those principles in search of cheap labor to benefit a minority at the expense of the majority. Only someone blinded by the plight of 15 million unemployed and all else that is going on in our economy and our country could ask WHERE IS THE HARM?”

Roman Emperor Diocletian thought similarly. He had to save “the people” and the world he knew by trying to keep things exactly as they were by instituting price controls, regulating each individual’s business activities, and forcing each son to follow his father’s trade…all on the penalty of death for violations. That was the beginning of feudalism and that is what you are advocating.

Let each individual decide what is best for him or her, and you get out of the way. You, like Diocletian, or Lenin, or Marx, or FDR, or LBJ, or Mao, or any other statist, do not know what is in the best interest of “the people” because you do not care about the individual. You, like all other statists, hide your insecurities and need to control behind self promoting statements that you know the needs and desires of a majority whom you do not even know or, for that matter, even care about.

muirgeo July 9, 2011 at 7:32 pm

Here’s the problem…. I am not making the decision and neither our the people. The decisions and rules are being made by the wealthy elites, their lobbyist their captured regulators and their government sponsors.

I am advocating rule by the people and you are sounding like a protector of the political class. You say … ” Let each individual decide what is best for him…” Do you really believe that i what is happening? The very suggestion again seems like an indirect defense of the status quo ruled by the political class.

Honestly… do you think you are an uninterested party and can you say you have no ties to the political class.

Dan J July 9, 2011 at 7:47 pm

Rule of the people? Barak Obama represents political class and elitism…. He does not represent anything I believe in… Therefore, he does not represent rule by the people, since, at least 50% of America share this view.
Also, at least, 50% of America does not share your progressive view, so it cannot be rule by the people.
How to rectify? Those who share views should only volunteer their associations and submit themselves voluntarily to any extra taxations or regulations of sorts. Want wimdmills and solar panels? You subscribe to them at actual cost, not govt subsidized pricing. No smoking issue… Don’t go into p
Aces where smoking is allowed by owner. Want organized, collectivized entitlements? Then volunteer yourselves as others can not participate as they freely choose….. But progressives hate free choice.

muirgeo July 9, 2011 at 8:24 pm

“Greg Webb July 9, 2011 at 1:56 pm
George, you addressed Don Boudreaux as, “Professor Let Them Eat Cake” in an attempt to denigrate Professor Boudreaux and his argument, …”

Yeah and I am sorry for that but the shear ruthlessness and indifference and outright denial of the reality of what some are going through is too provocative for me to remain silent.

I used to be a hard core Republican. I was PISSED at the welfare mom’s that came into my office with babies they had no way to care for. I was also PISSED at my fellow republicans for not supporting every sort of birth control measure available to stop these births… at least to help the mom’s plan them better. That was my first hint that republicans were stupid and maybe I was different and didn’t belong with them. To me the problem was simple if everyone just acted like adults worked hard and didn’t have kids until they could afford them 95% of the worlds problems would be solved.

But as I said… I am a pediatrician… and I couldn’t help but notice that those mothers that made me so angry always had babies and kids with them. You look down at enough of those babies and you start to realize… they are perceiving your anger and looking back at you saying, “Hey…. this wasn’t my idea… I didn’t ask for this shit”… now check my fricking ears cause I have a bottle to suck down….” You realize you can’t be mad at the lil fellers for the happenstance of their situation. They didn’t chose their mom’s. Then if you’re a pediatrician long enough eventually those babies born into circumstance turn into the mothers I despised…. when I realized that… I became a liberal. It’s not their fault…it IS a viscous cycle. I look at society with the idea of how best to set up the rules so all the babies are starting out with an equal chance. I don’t give a shit about the billionaires who already got theirs. Libertarianism has no answers for those babies… just the cold indifference we see in Don’s post. We are better then that. And ultimately it is self serving. I just think it will be more efficient to help everyone be productive so we don’t HAVE to spend so much on welfare and so we can ACTUALLY utilize this ultimate resource. I want a stable society with little crime. Not a society of castles and gates. A lot of lil Einstein’s running around out there getting their heads busted before they get a chance to contribute. Anyway people are way better than libertarianism…it’s the overly egoish greedy animalistic short-sighted and impractical thing. It’s a part we need to molt and leave behind. Get it out of the gene pool.

The Other Tim July 9, 2011 at 8:56 pm

So you have convert-rage. Why is this supposed to make us take you seriously?

You’ll see this phenomenon often in people who have made a major change in their beliefs. Since major changes in life require some serious justification, one tends not to like to hear people suggest that the claims one used to justify one’s change in belief were perhaps not as valid as one thought they were. If you abandoned the Republican party on the grounds that you believed all opponents of big government (here I roll my eyes at the notion that Republicans are opposed to big government) are either greedy or in the pockets of billionaires, the suggestion that it is libertarianism which is in the best interest of the poor and statism which is in the best interest of the billionaires is not merely contrary to your beliefs, it’s personally offensive because it implies you were a fool to convert.

Which means everything you say is compromised by emotional factors.

muirgeo July 9, 2011 at 10:47 pm

Sorry tim you don’t get to vilify being objective and open minded enough to changes ones views based on their life experience a as bad thing. I understand it’s beyond the comprehension of cultist ideologues like yourself who read a Rand book while beating off and became brainwashed for good i’ll take free thinking and an open mind any day over your closed yellow highlighted book anyday.

The Other Tim July 10, 2011 at 1:58 am

The descriptors “objective” and “open minded” are reserved for those who impassively analyze an argument, not those such as yourself who pitch fits whenever your preferred understanding of the universe is not received as gospel truth. It’s perfectly clear that you regard positions other than your own as both intellectually and morally degenerate. That is the definition of the closed-mindedness one comes to expect of a convert such as yourself. For you to allow that someone could possibly be justified in believing as you once believed is for you to allow that you may have made a conscious choice to abandon truth for error, which humans find profoundly distasteful.

No one is more closed-minded towards a position than the one who once believed it.

Greg Webb July 10, 2011 at 2:54 am

George, I am disappointed with your views. You do not understand libertarianism, and you advocate cruel authoritarianism, which benefits the few at the expense of the many. My comments regarding the important points in your post are provided below.

Don Boudreaux’s comments about the benefits of comparative advantage are not ruthless or indifferent, and are based in reality. Those who oppose comparative advantage do not live in the real world and do not understand economics or wealth creation.

You said that you were a “hard-core Republican” who left he party because you believed in coercing welfare mothers to use birth control against their wishes, and Republicans would not support that. Wow! I’m with the Republicans, which surprises me because they normally support big government run by elites (like themselves) coercing defenseless individuals to do what the self-appointed elite think is best. You really are one of today’s liberals or, as I prefer to call them, statists or authoritarians. You have much in common with the anarchic mob of the French Revolution, fascists, national socialists, international socialists, monarchists, etc. Each group thinks themselves an elite who knows better and should have the power to control the non-elites. You are wrong.

You said that that these welfare children did not choose their mom. No, they did not. Nor does anyone choose his life’s circumstances. Not being born and death are so final. Yet, life is full of possibilities. Money and stuff does not make you happy, otherwise the children of millionaires would be happy, well adjusted people, but most are not. And, poor children in Africa would be miserably sad, yet the poor children I met in Zambia seemed happy. I choose life… even if my circumstances were bad.

You said something about the mothers you despised…and then you talked about how you want to help “the people.”. And, this is typical authoritarian behavior. Mao sought power to help “the people.”. But, once he had power, he killed millions of “the people” in the Cultural Revolution. You should learn to love all people as individuals. The term “the people” is used by a statist when he really means his or her own selfish desires to control the world and everyone in it.

Libertarianism is the philosophy of freedom for the individual to do as he or she wishes without coercion by the government or the political elite as long as he or she does not hurt someone else. Statism is the believe that that the political elite should rule the many for the betterment of society, but really always for the benefit of the self-appointed elite. I stand in defense of the individual and agaist the self-appointed elite. And, you, my new friend George, are exactly the people I oppose. I hope to persuade you to care about individuals and not the self-appointed elite who live in those castles and mansions that you claim to hate.

muirgeo July 10, 2011 at 3:44 am

Greg said, “I stand in defense of the individual and agaist the self-appointed elite.”


” You really are…. authoritarians. You have much in common with …… fascists, national socialists, international socialists, monarchists, etc”

OK… what I have said over and over is that I believe in a people lead representative democracy. Specifically one in which the representatives represent people not corporations and have no preference for representing wealthy of the middle class.

That’s what I believe….. HERE IS A VERY SPECIFIC QUESTION… Do YOU believe in people lead representative democracy?

Ghengis Khak July 10, 2011 at 12:46 pm

“OK… what I have said over and over is that I believe in a people lead representative democracy. Specifically one in which the representatives represent people not corporations and have no preference for representing wealthy of the middle class.”

Muir — there is another option here: individual choice. Take the simple example of smartphone selection. The idealized democratic selection method involves everyone voting their preference, then everyone using the resulting winner. The dictatorial method involves an unelected leader choosing iphones for everyone. The individual choice method means that everyone selects which phone suits them (or none at all!) based on price, quality, etc.

At a broader scale, you can have mixtures of these methods. EG, a democratic system that is contrained in certain ways so that things like free speech, the right to bear arms, etc. are left to individual choice.

Apparently everyone here is in agreement that we don’t want the dictatorial method. The strawman you seem to want to use is that someone not in favor of the democratic method is in favor of the dictatorial one. These are not the only choices.

muirgeo July 10, 2011 at 3:36 pm

So ghengis I guess you want to force you views on the population and get rid of the constitution that describes how our democracy is to run… do you see any inconsistency in your positions? Cause it’s fatally flawed.

Go to Plant Money where they go to a Libertarian camp and talk to them about their beliefs and how they’d set up a society. It’s laughable how silly childish and impractical it is and would be.

Again SILLY!!!

Dan J July 10, 2011 at 6:03 pm

Not an all-encompassing representative democracy. Even if 75% of Americans say only black and white tv’s should be used, the other 25% should not be forbidden from colored tv’s.
Progressives push for pure democracy.

Greg Webb July 13, 2011 at 1:45 am

George, my answer is that this country is a Republic, which is limited self government through elected representatives. It is not a direct democracy as was tried and failed in Revolutionary France. Article III, Section 8 of the United States Constitution limits the federal government to specific enumerated powers and no more. Also, the policy reasons for these limits, as expressed in the Declaration of Independence and the Federalist Papers, is to prevent government from unjustly taking the life, liberty, or property of an individual citizen.

You, like all statists, use great-sounding slogans like “people-lead representative democracy.”. The Chinese Communists, a statist variant, call China “the People’s Republic of China. What a wonderful sounding name and so similar to your term. But, China is neither a republic nor people lead. And you have earned the same level of credibility as the Chinese Communists with your previous incoherent and illogical arguments.

Kirby July 9, 2011 at 8:42 pm

Let me explain to you something called “recessionary gap”
…oh what’s the use

Bob July 13, 2011 at 12:53 am

How did you come up with that, muirgeo? We were talking about manufacturing not free trade. Where did you get the idea that today’s world is the necessary outcome for not having manufacturing? There are plenty of things that the unemployed COULD be doing. The fact that no one is hiring them is not because we are short on factories.

There’s all kinds of work that needs to be done, and there is a lot more to it than a one variable equation.

vidyohs July 9, 2011 at 10:47 am

If we expand our minds and the concepts it holds we can see something that no one is addressing.

Definition of MANUFACTURE
1: something made from raw materials by hand or by machinery

2a : the process of making wares by hand or by machinery especially when carried on systematically with division of labor b : a productive industry using mechanical power and machinery

3: the act or process of producing something

If we look at definition #3 we can understand that producing information fits as #3 does not require that the manufactured thing be a tangible thing that one can hold or touch.

Therefore, Professor Chang and the Changese do in fact manufacture something, as does everyone. Definition #3 proves it is impossible to be without a manufacturing base, no matter how small the unit we talk about, world, nation, state, county, city, neighborhood, or individual.

It appears to me that the farther we move away from the human roots the less people feel confident in themselves as individuals.

ArrowSmith July 9, 2011 at 6:10 pm

Yes because engineers do not assemble the final products they must feel absolutely horrid about themselves. It’s just terrible to work with your mind instead of endless repetitive labor.

vidyohs July 9, 2011 at 6:29 pm

Engineers eh? Let them eat eraser dust.

But, wait! How many engineers actually do the assembly even of the things they design? Not being an engineer I wouldn’t know for sure. However, I seem to recall every engineer I have ever seen directing or supervising assembly of the things they design.

ArrowSmith July 9, 2011 at 7:37 pm

What about software engineering? There is literally no physical things involved! How can it even be real? :) )))

vidyohs July 9, 2011 at 8:36 pm

Ah-ha, we are on the right track! My son is a database engineer and says its magic. Magic is not real unless you get the benefit of being the magicee.

vidyohs July 10, 2011 at 11:19 am

All my kidding aside, I do believe that we the people have let ourselves drift into some destructive habits, one of which is letting others, especially past others define the words which effect our daily attitudes and our daily lives in such dramatic fashion, and we lose a lot opportunity by being bound in those definitions.

Single Acts Of Tyranny July 9, 2011 at 11:19 am

If however the Changese were maxing their visa card every month, demanding higher limits, forging money and burning their neighbours houses, it would perhaps be a more apt metaphor for the west today.

KC July 9, 2011 at 1:51 pm

Chang Ha Joon is now a best-selling author in South Korea making the same kinds of arguments Prof. Boudreaux slices up. It is really a shame that Chang’s nationalistic writings in favor of infant industry protection and against free trade have found quite a following here in South Korea–and I suspect around the world, based on the Economist poll.

Methinks1776 July 9, 2011 at 1:56 pm

KC, have you read any of his books? I could barely contain my disgust (OK, I couldn’t) as he talked glowingly about the horrible smothering of South Koreans in order to develop these “infant industries”. What did South Korea smother? He doesn’t know and doesn’t care. What a simpleton.

KC July 9, 2011 at 2:11 pm

Methinks, I have read parts of about three or four of his books. I have been reading “23 things” but I can barely get through two pages without tossing it. By the way, my boss at the Center for Free Enterprise has published several articles (in Korean) attacking Chang. We are now in the process of translating them into English. He got something like 200,000 hits in response, MANY negative and vile comments from South Koreans defending Chang’s honor. Chang’s economic nationalism plays well over here, unfortunately.

Methinks1776 July 9, 2011 at 2:22 pm

KC, I would love to read the translated articles. Will they be available online at the Center for Free Enterprise?

I could only read Chang 4 pages at a time and only out loud to my husband (he grew up in the “development set”) who was providing sarcastic commentary to ease my developing headache. He’s that bad.

KC July 9, 2011 at 2:34 pm

Methinks, e-yup! I will shop the articles to a few English language newspapers first, but we should be posting them soon, probably one at a time because he (Kim Chung-Ho, the CFE prez) has written several articles responding to Chang.

I guess the one good thing I can say is that Chang is that no matter how much he bashes globalization, he is a success story of it. He grew up in South Korea when it was a poor country in a culture that had long tried to close itself off to the world, he went off to England to study and later began working at Cambridge U., he has now published books sold all around the world, he works with people from all over the world, and his latest book was published by Penguin (British, right?). With his nationalistic viewpoint, it is a wonder that he didn’t just stay in Korea, work at a Korean university, and work only with Korean editors and publishers. But check the acknowlegements, very few Koreans are named there, he has truly gone international despite his nationalistic rhetoric

Methinks1776 July 9, 2011 at 2:52 pm

Ha! Great point, KC!

Thanks for the info :)

Methinks1776 July 9, 2011 at 2:23 pm

Chang, that is.

KC July 9, 2011 at 2:36 pm

Right, I guessed you meant Chang, and not your hubby!

ArrowSmith July 9, 2011 at 6:07 pm

I think the distinction needs to be made between product design, machine tooling for factories and assembly. American leads in the first 2 and China in #3. Just look at Apple. They actually design the ARM-processor that goes in all iDevices, but the fabrication is done in China.

Dan J July 9, 2011 at 6:50 pm

There is no govt policy that will stop businesses from investing in countries other than the US. Far too much opportunity. As more and more countries adopt some form of capitalism, even if their heavy handed interventionism hampers the real opportunity for huge gains, the money will flow into those regions and, therefore, less here.
But, the US can make it less opportune for relocating by lessening the govt strangulation. Abolish and simplify tax code with no deductions save a 2%-3% charitable givings. Provide legislation abolishing any rule making or regulation by anyone except for state or federally elected legislators, i.e. Congress. All rules or legislation must be passed by congress and signed by governor or president. Accountability is vital and appointed bureaucrats cannot be held accountable except to their ideologues who placed them.
Reduce regulations.
Businesses and individuals want to be in the US. I do get to have conversations with some ineresting people ( former VP’s, CEO’s, once politically connected folk, etc.,….). They don’t care for traveling (the novelty wears off quickly) and many prefer to live in US.
Making it easier for businesses to stay in US will encourage many to pay some extra costs on wages to keep their business operations here. But, opportunity in emerging nations will always have them investing elsewhere. It would be dumb to not invest in India.

tdp July 9, 2011 at 6:56 pm
muirgeo July 9, 2011 at 7:12 pm

“Have you read Adam Smith’s “The Wealth of Nations”? If you haven’t, then you should. In it, you will learn that through the selfish pursuit of his or her own self interest, the butcher, the baker, and the brewer were all better off.”

Adam Smith is IRRELEVANT in an age of Wall Street Qaunts, high speed trading and complex financial products.

ArrowSmith July 9, 2011 at 7:39 pm

Wrong. The “invisible hand” applies as much in 2011 as in 1776. The basic laws of economics have not changed. Just because the speed of transactions is much faster now doesn’t imply a change in motivations of capitalists. They are just as profit-seeking now as then.

muirgeo July 9, 2011 at 8:28 pm

Wow… I haven’t read Adam smith… but based on what you just wrote there….

Kirby July 9, 2011 at 8:36 pm

The non face-to-face interactions and lack of haggling on Wall Street have nullified the Law of Supply and Demand, and prevented market eqalibrium!

The Other Tim July 9, 2011 at 9:11 pm

This could either be brilliant sarcasm or a really dumb statement, but I don’t recall seeing you around enough to know which side you’re on.

muirgeo July 9, 2011 at 10:51 pm

He’s with Stupid.

tdp July 9, 2011 at 10:53 pm

no he disagrees with you. your never having read adam smith explains why you think government central planning is good for the economy.

Dan J July 9, 2011 at 11:05 pm

The absolute failures of central planning is historical and prevalent today, yet, there are a few who are abstinent and simply believe the wrong people were at the helm.

muirgeo July 10, 2011 at 2:46 am

He;’s with stupid

Kirby July 10, 2011 at 11:45 am

It’s sarcasm. Don’t believe muirego. Muirego may or may not be with stupid, but I know his friends certainly are.

Methinks1776 July 9, 2011 at 9:18 pm

Never heard of “open outrcy”, have you, Kirbs.

Dan J July 9, 2011 at 9:49 pm

Ain’t it grand that we learned, once again that Keynes theory is again incorrect? How many times must we go through this?

Greg Webb July 9, 2011 at 10:24 pm

Dan J, statists will never learn from history, facts, or evidence. It is all about being part of the “elite” crowd. And, by refusing to learn from history, all statists, if successful, will relearn the lesson that they are merely “useful idiots” to the very small inner circle of the political elite who will not share power, once they have it, with anyone else.

Dan J July 9, 2011 at 11:03 pm

What they do, is imply that one facet of the grand scheme mucked up the ‘works’. In the housing scheme, the schemers assume that wall street mucked it up and that if they control that one issue of ‘packaging bad loans with good’, then the whole thing would have worked. Notice that in all of the new legislation, there are no measures to forbid another GSE like Fannie or Freddie from assuming such risk with tax payer dollars. They will try this again. They have pushed the student loans into govt hands to create the same scheme they intended with housing…. To assist in creating their utopian equality. Penalize those associated with past transgressions and prop up the so-called victims. Create a new entitlement. We are likely to see ‘D’ students get loans for universities based on third party visions rather than individual merit.

muirgeo July 10, 2011 at 3:51 am

Regarding the Wall Street Financial Crisis…. bad loans maybe accounted for 1 trillion dollars of problems. Wall Street MBS accounted for as much as 50 or 100 trillion dollars of toxic soup in the economy. That’s indisputable. You guys are lying to yourself and unable to accept the truth of what happened….. it really feels like a cult in here…

From: The Next Financial Crisis Will Be Even Worse

The last financial crisis isn’t over, but we might as well start getting ready for the next one.

Sorry to be gloomy, but there it is.

Why? Here are 10 reasons.

1) We are learning the wrong lessons from the last one. Was the housing bubble really caused by Fannie Mae, Freddie Mac, the Community Reinvestment Act, Barney Frank, Bill Clinton, “liberals” and so on? That’s what a growing army of people now claim. There’s just one problem. If so, then how come there was a gigantic housing bubble in Spain as well? Did Barney Frank cause that, too (and while in the minority in Congress, no less!)? If so, how? And what about the giant housing bubbles in Ireland, the U.K. and Australia? All Barney Frank? And the ones across Eastern Europe, and elsewhere? I’d laugh, but tens of millions are being suckered into this piece of spin, which is being pushed in order to provide cover so the real culprits can get away. And it’s working.

YES you guys and your cult beliefs are very dangerous….

Dan J July 10, 2011 at 6:09 pm

As I said, progressives will claim ‘ the scheme would have worked’. They will try it again.
‘We are who we have been waiting for’……..

muirgeo July 10, 2011 at 6:53 pm

Dan the scheme did work when we had Glass Steagal and the mafia casino finance people you work for were unable to contaminate pension plans and mortgages with their evil products. IT DID WORK! The history is clear. 50 years of shared prosperity and then we let the evil genie’s out. Now all we are asking for is product labels so people know which crap to not to buy and your employers are successfully preventing even this… they are with out a doubt very evil and bad people. They are sociopaths and you work for them. You have NO credibility… you don’t even control your own mind. You are not a free thinking person. You are a sell out, an anti-capitalist, a hypocrite, an un-American and soulless person. What you write means nothing to me but to sadden me to see people so lost.

I am confident that the next Washington or the next FDR will come along and push back on the evil that infects our society.

Bob July 13, 2011 at 1:02 am

Maybe you do only understand single variables. Did you ever stop to think maybe the Spaniards are smart enough to copy someone? Have you bothered to go find out where CDO were invented, when, and why? Does it even matter to you, or are you kept secured by the shelter of a narrow mind?

Dan J July 13, 2011 at 1:24 am

Imagine that!! Most media and most programming on television preach the same story lines…… Individualism Bad, collectivism good…… Using plastic bags bad… Bring your own cloth bags good….. Famine and flooding from oil and coal….. Political correctness ….. White people are racists…… We need more govt to create equality…… ‘if the legislation saves just one life, then….’…… Blah, blah, blah….. And I am the brainwashed person?
Collectivists policies at places of employment can be ludicrous, but the greedy, self-serving lawyers have every man, woman, and child on the earth on notice for a lawsuit should they ‘step on a crack and break thy mothers back’.

You are looking at the recent FDR…. His name is Obama… And this tome the public is a little wiser… So he won’t get away with much of the same corrupt thuggery that the scumbag FDR did.

Dan J July 13, 2011 at 1:31 am

Allmthe folks who jumped on the ‘global warming express’ who then jumped off.
The religious zealots had to rename it due to the realistic contradictions by mother nature.

Tv said ‘ insert any new fad’….. Therefore it must be true…. The polar bears are dying……

Oh, wait…. The earth is constantly moving thru cycles and regions are constantly changing? Tectonic plate shifts, volcanic activities, mountains eroding (or disappearing)( think mt. Rainier)….. Hell, rivers change directions… From nice and snake like curves to straight and deeper or wider…..

Greg Webb July 13, 2011 at 2:06 am

George, you are incorrect. The economic crisis was caused by illogical political incentives and fiscal policies of the federal government combined with unwise easy credit monetary policies of the Federal Reserve System.

It appears Obama was not “The One” that you were waiting for. Did you change your mind about that before or after his economic policies failed so miserably? BTW, cultists are the ones who worship other humans as”The One”…whether it is Obama or Roosevelt or Algore. And, no, I don’t want to join your cult. I’d rather continue the proud tradition of the United States by supporting liberty for the individual and limiting the power of government.

I see you did not study civics either. You should read the Constitution, the Declaration of Independence, and The Federalist Papers.

Greg Webb July 13, 2011 at 2:11 am

George, Adam Smith is relevant. It’s Jean-Jacques Rousseau who is irrelevant. Smith understood economics, Rousseau understood the anarchic mob. Come on, George, you are smarter than this. Please check your ego and emotions at the door.

gold bracelets July 11, 2011 at 12:28 am

I had the same thought, but the net has already changed everything, and the automobile changed.

Ian Random July 18, 2011 at 3:55 am

If you want a manufacturing base in everything, ask yourself what do you want to pay more for? I would love to see government level the playing field for all domestic manufacturers, not just the big politically significant ones. A disc manufacturer moved into town and I believe they stayed just long enough for all the incentives to expire and then left. I wonder what would have happened had the government let property values grow slower by letting farm land get converted to a better use and see if the local companies could’ve expanded cheaper. Want to see the future of America, just look at California. Hardly any high energy users, outside of government sponsored research like the collider.

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