Gramm delivers really straight talk
posted at 11:30 am on July 10, 2008 by Ed Morrissey
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Phil Gramm vented a little frustration about the doom-and-gloom talk surrounding the economy in an interview with the Washington Times, and Democrats have jumped all over it. Gramm, speaking as a surrogate for the John McCain, decried the rush to pessimism, noting that we have not yet experienced a single quarter of contraction, let alone a recession. His description of a “mental recession” has McCain’s opponents gleefully portraying Gramm as out of touch:
In an interview with the Washington Times, Phil Gramm, a former Texas senator who is now vice chairman of UBS, the giant Swiss bank, said he expects Mr. McCain to inherit a sluggish economy if he wins the presidency, weighed down above all by the conviction of many Americans that economic conditions are the worst in two or three decades and that America is in decline.
“You’ve heard of mental depression; this is a mental recession,” he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. “We may have a recession; we haven’t had one yet.”
“We have sort of become a nation of whiners,” he said. “You just hear this constant whining, complaining about a loss of competitiveness, America in decline” despite a major export boom that is the primary reason that growth continues in the economy, he said.
“We’ve never been more dominant; we’ve never had more natural advantages than we have today,” he said. “We have benefited greatly” from the globalization of the economy in the last 30 years.
Gramm has at least the non-recession correct. In fact, growth ticked slightly upwards in the last quarter from 2007Q4, going from 0.6% to 1.0%. Since recession is defined as two successive quarters of negative GDP growth, Gramm rightly states that we haven’t yet had a recession. The export boom shows that America can compete on a globalized stage, despite the shrieks of economic collapse that accompany trade talks.
Democrats call Gramm out of touch for calling the US a “nation of whiners”. It may be politically inapt in an election year, but the description isn’t far wrong. We hear comparisons made to the Great Depression and a “Herbert Hoover economy”, but that only proves how incoherent and economically illiterate critics can be. Growth remains positive and unemployment remains in the range of historical average of 5.5%. Contrast that to the economy of Jimmy Carter, when unemployment, inflation, and interest rates all went out of control — and even that was nothing next to the Depression. Whiners? You bet.
And the most ironic part of this criticism is that most of the people launching it want to do exactly what Hoover did — revert to economic protectionism. They want a Smoot-Hawley approach to foreign trade that would make whatever economic troubles we do have grow exponentially.
Gramm made a mistake, though, in assigning whiner status to the entire country, and the Democrats are poised to pounce on it:
“How dare john McCain and his advisers so callously dismiss the challenges the American people face? No wonder voters feel john McCain is out of touch. He and his campaign don’t even understand the everyday issues Americans are dealing with.”
The problem with today’s economy comes from two sources: the credit collapse from the burst of the housing bubble, and the rapidly-increasing price of fuel. Both parties can take the blame for the former if any blame at all is to be assigned, but the latter belongs squarely in the lap of Democrats. Republicans have tried for years to increase both domestic production and refining of oil, as John Boehner reminds everyone today in the New York Post, but the Democrats have obstructed all efforts. Had we brought the OCS and interior sources on line during the 1990s, we would have no supply crisis today. Had we done so after 9/11, when the strategic issues regarding oil production became blindingly obvious to all but the most obtuse, we would be seeing the maturation of those supply sources right now.
Instead, what did we get? Thirteen years of whining that it would take seven years to bring new sources of oil to the market. I’d say that Gramm diagnoses the problem with accuracy, and that the Democrats should own up to their affliction.
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Well then he was a lousy business man.
Thanks anyway but I’m holding out for one of those jobs with Juan Plantation McBernie picking lettuce for $50 an hour.
MB4 on July 10, 2008 at 3:22 PM
Oh right, so you just threw in Holocaust denial and such for grins. Well you remind me of the far left.
MB4 on July 10, 2008 at 3:25 PM
JiangxiDad on July 10, 2008 at 3:05 PM
I agree. Like everything in life moderation is the key. Pure capitalism will in the end cause the net flow of wealth into the hands of the few. One of the reasons our country and our economy has been the envy of the wrold is because we have mixed socialism and capitalism. In the 1970’s socialism got too much power and our economy went down the drain.
it is a good thing to have a progeessive tax system as long as the rates are low for all. It is a good thing to have a saftey net as long as the net does not become a way of life. It is a good thing to have some type of healthcare for the poor as long as it is not free to all. It is a good thing to have unemployment benefits as long as people still have reasons to work. It is a good thing to have our senior citizens able to retire. It is a good thing to have a cleaner environment.
But these things come with a price. One of those prices is higher labour rates than in countries without these things. Thus we need to have a way to balance those costs to ensure that the good things can be continued to be funded at the reduced tax rates. Thus trade tarriffs and immigration quotas.
I am against illegal immigration as well as reimportation of drugs. the high price of drugs in the USa helps to fund increases in research which will give us new and better drugs. the same is true for labor. The higher price of labour in the USA gives us the ability to have lower tax RATES and still be able to fund basic things like worker’s comp, mediciad, social security.
Capitalism at least modern capitalism has a way of removing the socialtal costs off the balance sheet. If you reduce wages you have to increase tax rates to continue to fund the same services at the same level of care.
unseen on July 10, 2008 at 3:25 PM
right4life:
The old guy sold his farm to someone who will grow corn. That does not require a lot of field help.
And he can’t pay people more, because consumers are already bitching about food prices. He even put up a sign last year, Upick. People could pick their own melons and beans and other produce for less money. People were too lazy to get out of their vehicles and do that.
The truth is migrants have always done that kind of work. Long before people started yammering about illegal immigration. Back in the 30’s when my mother’s family were forced to out of Oklahoma to go to California and work the fields, the people they were working with were migrants, many of them Mexicans. We even had a government program for years that was designed to bring people up to do the work. So the idea that this old guy can just pay people more money and all of sudden Americans are going to line up to pick melons is ridiculous. It won’t happen. They would rather take unemployment than work the fields.
Terrye on July 10, 2008 at 3:26 PM
I know the gutter and I know the stink of the street
Kicked like a dog, I have spat out the bile of defeat
All you beauties who towered above me
You who gave me the smack of your rod
Now I give you the gutter
I give you the judgement of God!
MB4 on July 10, 2008 at 3:29 PM
MB4:
It was not just for grins. You remind me of Pat Buchanan. And Pat Buchanan is a bigot and an anti semite who hates Bush and most of the GOP. I can not help it if you remind me of the guy. You just do.
Terrye on July 10, 2008 at 3:29 PM
On the inequality of wealth and income, see the eponymous chapter XV section 7 of Human Action—when it exists because of free-market capitalism, it’s a good thing.
Gated communities are gated against criminals, whose numbers and power are encouraged to grow, whether intentionally or not, by the policies of the Democrats. When poor people can cease to be poor though work and saving, they do not have to turn to crime to increase their well-being.
You are correct that the point of a progressive income tax is income redistribution. Just because it is a long-established policy, though, doesn’t mean it’s a good thing.
One who cares about the welfare of the “worker” would do better by the worker (and by everyone else in the economic system) to see that the worker can get an education in mathematics and the sciences and can seek work in a free employment market, lest the worker be at the mercy of technological change. Fewer unskilled, uneducated workers in an economy is a sign of progres.
hicsuget on July 10, 2008 at 3:29 PM
But I am not calling you a bigot. And I am sure that you would not call me any names either.
Terrye on July 10, 2008 at 3:29 PM
There you go again.
- Ronald Reagan
MB4 on July 10, 2008 at 3:32 PM
Exactly. But DO NOT hold your breath.
Texyank on July 10, 2008 at 3:33 PM
And no, the old boy was not a lousy businessman. He has been in business for many years, but he can not get people to do the work and he is not able to do it physically himself anymore.
And by the way, people are already complaining about food prices, so the idea that all that old boy had to do was pay someone twice what they worth and people would be standing in line to do ag work is silly. It really is.
Terrye on July 10, 2008 at 3:34 PM
You speak out of both sides of you mouth and do not even seem to be dimly aware of it.
MB4 on July 10, 2008 at 3:35 PM
You see the problem is not just as simple as illegal immigration or bad farmers it is a consumer that wants cheap food. And if you think they are complaining about high gas prices and food prices now, just double those food prices again and listen to the reaction.
Terrye on July 10, 2008 at 3:36 PM
He probably would have done just fine 150 years ago in the south.
MB4 on July 10, 2008 at 3:37 PM
No I am not speaking out of both sides of my mouth. I leave that to you MB4. You constantly complain about everyone from Bush to McCain to Gramm to anyone else in the GOP that does not follow your particular brand of conservatism. The inevitable result of that is more division in the Republican party, a lessening of support for the GOP and a boon to the Democrats.
Terrye on July 10, 2008 at 3:38 PM
Not all of the teachings of economics are laws—just a few. They are laws because they are true a priori in a vacuum, like a mathematical statement or a logical syllogism, and do not depend on observation for confirmation. Cf Human Action chapter II section 2.
Gravity depends on observation for confirmation, so it is not a law.
hicsuget on July 10, 2008 at 3:39 PM
This will work really swell for the Republicans! Americans should stop complaining about high gas and food prices. After all, us country club Republicans have plenty of money and don’t give a rat’s ass about you little people anyway so get off our backs! Yup, sounds like the party that I left! Good grief! Ronald Reagan just spun around in his grave a couple of times…
sabbott on July 10, 2008 at 3:39 PM
Believe it or not there are some things that are more important than $$$.
Besides as harvesting only makes up a fraction of food prices (I know I picked strawberries as a kid and was only paid a tenth of what the end consumer paid), food prices are not going to double if plantation owners paid non serf level wages.
You are sounding like Al Gore with his Apocalyptic Global Warming hysteria.
MB4 on July 10, 2008 at 3:41 PM
You can cling to your “bible and guns”, I’ll cling to my “whining and mental recession” if I want too.
Economic guru Senator John McCain initially agreed with the Vice President of the giant Swiss bank UBS.
I’m still clingin’ to “whinnin’ and mental anguish” over this economy that’s deep in, Bush’s brush cut ditch.
…and his name is, Flipper, Flipper… the famous dolphin… he could flip over backwards time after time!
J_Gocht on July 10, 2008 at 3:44 PM
Your statement, “Pure capitalism will in the end cause the net flow of wealth into the hands of a few,” as I have previously stated, is (quite literally) straight out of The Communist Manifesto, and is contradicted (quite literally) by all of economics properly so-called.
The “Third Way” mix of socialism and capitalism that you praise so highly, incidentally, is better known as “fascism.” Cf. Goldberg, Liberal Fascism; Mises, Socialism, chapter 15.
hicsuget on July 10, 2008 at 3:45 PM
Ah Professor. Now I know you have a sense of humor. Yes, thanks for that solution. Why didn’t I think of giving everyone a through education in the maths and sciences.
Perhaps you are unaware of the stereotype you just perpetuated.
JiangxiDad on July 10, 2008 at 3:45 PM
You sure have. Don’t you even read what you write even when I repost some of your words for you?
I think it’s pretty safe to say that you didn’t mean I look like him or have the same blood type. You are sure into denial, denial of the obvious. You’re getting very tiresome too.
MB4 on July 10, 2008 at 3:49 PM
MB4:
More important than money? The man sold his farm to a corn farmer who will row crop it because you do not need a lot of help for that. Not if you have machinery.
Americans do not want to do that kind of work. The people who claim they will have rarely if ever done it themselves. Migrants have been working the fields for decades. This is not new. The idea that if we just start paying everyone $20 a hour they will move out to the sticks and pick melons for a living in the summer is crazy. It won’t work. The only time Americans do that kind of work willingly, is when they own the land themselves.
And no one wants to support that. It is not efficient. People will whine about the costs. That is why the population of rural America has been declining for decades.
Terrye on July 10, 2008 at 3:50 PM
MB4:
Don’t be so literal.
Terrye on July 10, 2008 at 3:51 PM
Yeah the price of gas and food has gone up significantly, Americans every where are feeling the pinch and Gramm says, it’s not a recession – NOT YET! He won’t have to wait long unfortunately.
I like Gramm I voted for him when he ran for President, but this DOES show him as out of touch.
And are you guys seriously debating capitalism vs socialism? I thought that debate died with the USSR.
joncoltonis on July 10, 2008 at 3:51 PM
You know, this is just complete bullshit. It’s a flat out-and-out downright lie.
Republicans sat on their hands when they had all the marbles between 2000 and 2006. A Republican governor nixed off-shore drilling in Florida. GWB did absolutely diddly about promoting a comprehensive energy policy. GWB never did squat about getting America to a point where we import no oil from the Arabs and Muslims who now hold us hostage to their oil and the high prices for that oil.
Boehner is a liar.
And frankly, until the Republican Party stops putting lying candidates up for elective office I’m going back into the wilderness for the proverbial 40 days.
People like Boehner and his enablers like Ed want to think they’re being clever using high oil prices as a cudgel and as an election tool.
It’s not clever and no one believes you anymore.
pabarge on July 10, 2008 at 3:55 PM
still waiting for you to explain to me how competing with state supported industry in china is just captalism?
right4life on July 10, 2008 at 3:55 PM
absolutely.
right4life on July 10, 2008 at 3:56 PM
Plantation owners????MB4, that sounds positively Marxist. Let’s see, that would be the plantation owners vs the robber barons. The wage slaves vs the real slaves. Whatever, it is nonsense.
I was a dairy farmer for years. I stopped farming because I had not a day off in years. My husband was working off the farm to help pay the bills.
If you want to go out there and buy some ground and put out some crops and pay some people to do the work and show those plantation owners who produce the food you eat how it is done..then just jump right in there. No one is stopping you. Go ahead.
But no, you will sit back and talk about plantation owners and lousy business people etc.
Terrye on July 10, 2008 at 3:56 PM
Not sure at all about trade tariffs. Don’t see how they work in the long run. Not sure there’s any “solution.” But if Americans’ standard of living goes down in relation to other countries, (as their economies moderninze), we should at the least be no worse than other modern idustrial/technological nations.
Agree about drugs. We should not import labor to lower wages, but wages will still fall as other countries produce the same product using their lower wage rate.
Maybe lower income tax rates, but not lower payroll taxes. There’s no free lunch. But I am for those safety net benefits all the same.
Well in this instance we’re talking about reducing wages by eliminating higher paying manufacturing jobs and substituting them with lower paying service jobs. It’s already a fact of life, and the increasing cost of providing the same services falls more on the upper class who pays the federal taxes, or on everyone when businesses pay higher costs for things like unemployment insurance and then pass that on to the customers.
But like you said, these things are a balance, and the US is not a pure capitalistic system.
JiangxiDad on July 10, 2008 at 3:58 PM
Speaking of talking out of both sides of their mouths, there are the conservatives who do nothing but complain about other conservatives and who in the process help liberal Democrats. This is not to say that criticism is not sometimes warranted, but if that is all you do then you could be seen as working for the Democrats.
Terrye on July 10, 2008 at 4:04 PM
pabarge:
That is not entirely true. Republicans did not just sit on their hands. The problem with a slim majority is that it allows the opposition to effectively block initiatives and legislation in many cases. The Democrats did just that. And even now, the Democrats themselves have failed to do a lot of what they wanted as well. You end with gridlock.
Terrye on July 10, 2008 at 4:06 PM
Come on now pabarge, them’s fightin’ words…!
J_Gocht on July 10, 2008 at 4:09 PM
Dude…that’s one heavy rucksack !
J_Gocht on July 10, 2008 at 4:15 PM
hicsuget on July 10, 2008 at 3:45 PM
Your views is what in the end led to the communists revolutions and the rise of the unions as polictial forces among others.
By your own statement economics are only laws in an vacuum. The last I looked economies do not operate in an vaccum. your pursuit of ideals is wrong and pigheaded.
In the real world. human nature and the laws of thermodynamics inteferes with economics. This by the way is the reason economicists are almost always wrong.
With human nature you came across an emotion known as greed. Greed will cause humans that have power due to increases in weatlh to want to one protect that wealth and two to expand that wealth. they will use their power (money, job creations, tax revenues etc ) to do both of these things. Both of these process from buying off politicians to getting friendly terms on loans, decreased labour costs etc will cause the more wealth to be drawn to the powerful. As they accumalate more power and more wealth the laws of economics is further eroded.
Law of thermodynamicsa also comes into play with economics as people seek to expand the least amount of energy to achieve the desired result. In this case welfare, unemployment benefits, crime etc. since human nature/ relgious sensitivity/ moral compassion will not allow large groups of people to starve and die thru neglect the social groups that continue to fund this low work will always be there. Add into the mix that as those that do less and less work see the few that do the work reap the benefits then you have the human emotion of envy come into play. The quick taking of others endevors thru rebellion, crime, murder, etc has been with us since time began.
If left to their own devices human nature and the laws of thermodynamics will trump the laws of economics. IT has been proven time and time again in real world examples from Communists states where everyone is on the dole, to corrupt oilgraphies like Mexico where the rich control all levels of governmental control.
To avoid the revoultions of communists and socialists, avoid the 100% chokehold of unions and to avoid the total takeover of the rich on the functions of government and social levers a mix of systems that encourages saftey nets, some form of income redistrubution, workers protections, environmental policies, and free market, wealth generating ppolicies, etc are needed.
Pure capitalism combinded with human nature will lead to the complete outflow of wealth from the poor to the wealth and the destruction of the middle class. just like Pure communistism/socialism will lead to the destruction of all wealth and utter poverty for all.
Yes I am sure some of that sounds like Marx’s and some sounds like Smith. Moderation is the key. As long as the soicalists do not gain control, and as long as the rich and powerful are blocked from gaining control then society will function within (to a certain extent) the bounds of economic law. and this moderation has been shown thru out history from Rome to the USA to be the key for the rise of great nations.
unseen on July 10, 2008 at 4:16 PM
Graham is right. The left has psychologically manipulated the middle class and is responsible for exploiting weaknesses in the economy to cause a big enough downturn to use it as an election tool. It was Hillary Clinton who went after the middle class first. The strategy is simple. Make people feel things are worse than they are and set yourself up as the savior.
Connie on July 10, 2008 at 4:17 PM
That sums it up for me as well. If that makes me a Marxist, so be it I guess.
JiangxiDad on July 10, 2008 at 4:23 PM
I must confess, in total seriousness, to being completely unaware that I was perpetuating stereotypes.
An individual with a current, relevant education, upon losing his job, can find a new one at a comparable rate of pay without much difficulty, provided that the government does not interfere with labor markets (see France or Germany as counter-examples to our American experience).
An unskilled, uneducated worker who loses a union job for which the union has, though its government-sponsored monopoly status, extorted the company to pay higher-than-market wages, cannot find employment at a similar wage elsewhere. His new job at minimum wage doesn’t pay too little; rather, his old job paid too much (hence a large part of the reason why he’s been laid off).
The solution is to keep your skills relevant to the economy, rather than demanding that the government keep the economy relevant to you. Imagine the state of affairs if, at the turn of the 20th century, the automobile were banned to keep stablehands and blacksmiths from being put out of work!
hicsuget on July 10, 2008 at 4:26 PM
Agree about drugs. We should not import labor to lower wages, but wages will still fall as other countries produce the same product using their lower wage rate.
JiangxiDad on July 10, 2008 at 3:58 PM
And thus tarriffs are imposed to make sure those nations using lower labour rates do not have an unfair advantage in the market place since those countries do not have the safety nets etc that we have. tarrifs make it an apples to apples comparision instead of apples to organes. then the products can be choosen for other factors besides prices like quality, ease of use, product protection, consutmer service.
Now their is a case to say that tarrifs reduce competitive tendencies among comapnies and make them bloated and unable to react to changes in a market place. but that is a different problem…I think moderation in tarrifs are needed here as in moderation is other things. Total free trade is stupid since our trading partners are not playing under the same rules. But a blanket 100% tarrif is also stupid. What would be fair is something like: if all factors of the society were factored and each import was charged the same amount of a portion of that cost
unseen on July 10, 2008 at 4:27 PM
I just do not understand why everything has to be all black and white. For instance, you can secure the border, enforce laws and still have a guest worker program for seasonal ag labor. Sheesh. That has nothing to do with plantations.
Terrye on July 10, 2008 at 4:28 PM
Everyone should floss everyday and eat sensibly too.
JiangxiDad on July 10, 2008 at 4:33 PM
hicsuget on July 10, 2008 at 4:26 PM
So let’s be clear on this. In your little world. Vacation days, sick days would be a bad thing because it raises the cost of labour and thus makes that labour more expensive.
Also worker’s comp should be banned, the 40 hour work week is an artifical construct and overtime pay should be repealed. Health insurance as a workers benefit should be excluded from all bu the skilled workers. etc.
What you are describing will lead to a class society much like India where those that can master the sciences, technology, etc will rule those of lesser intelligence.
Yeap sign me up I can the election victories for the next 100 years on that platform.
We has a nation have decided that that was not the way we wanted to go. We have place regulations for both unskilled and high skilled workers. We have determined that it is better has a society to have buseniss shoulder some of the costs for some of the society gaols we want to have as a nation of people.
unseen on July 10, 2008 at 4:37 PM
The media have both fed, and fed on, the public’s general ignorance about the economy. Recesssion used to be a really bad word that was only invoked when it was “official,” i.e., two straight quarters of negative GDP groth. Now it’s like, “You have to pay twice as much for gas as you did a year ago, that means we’re in a recession.”
rockmom on July 10, 2008 at 4:40 PM
Terrye on July 10, 2008 at 4:28 PM
Yes you can but that doesn’t benefit the dems with cheap votes and it doesn’t benefit the repubs with cheap labor that is paid in cash and shows no taxes. Thus since it doesn’t benefit the ruling class at all it will never become law until the people give them the choice of that or the ruling elites jobs. thus you have an election with no one given lip service to the compromise.
unseen on July 10, 2008 at 4:41 PM
I know the Professor would be having a fit reading with this, but I (an amateur) would have to essentially agree. There’s a degree of social engineering in this. Who makes the decision, how is the decision made– I realize it’s political, and the top of a potentially slippery slope. But as you say, life’s not led in a vacuum. I’m with you again. God forbid we get a
ChavezObama.JiangxiDad on July 10, 2008 at 4:44 PM
Phil Gramm, you are a moron.
How’s that for straight talk?
TheBigOldDog on July 10, 2008 at 4:46 PM
rockmom on July 10, 2008 at 4:40 PM
Connie on July 10, 2008 at 4:17 PM
Yes you can be right or you can be victorous. some times you can be both and sometimes you can’t. This is one of those times you can’t.
I know I’m repeating myself here but when the french queen uttered those words “let them eat cake” there was by historical records a glut of cake and a shortage of bread. She might have been simply saying since there is no bread let them eat the cake.
was she right? If records are true she was. Did she still lose her head? yes. sometimes it’s not what you say, its how you say it.
Calling the American people a bunch of whinners does not win elections. aying its all in your head to the american people does not win election no matter what the “truth” is.
9% approval ratings for congress and 30% approval ratings for the president says there is a problem the American people feel is important and not being addressed. failure to address that problem or calling those that express that problem names will not win elections.
unseen on July 10, 2008 at 4:47 PM
JiangxiDad on July 10, 2008 at 4:44 PM
yes who decides is the question. the more of an equation you put on it and the fairer you make it so that one industry is not included or excluded the more it will sell to the general population. If china wants to gain the fruits of our wealth why should they not pay the costs of that wealth? or japan, or europe? We could factor in the cost of protecting them vs the money the save on not funding their army also.
unseen on July 10, 2008 at 4:51 PM
There’s no reason why a “recession” has to necessarily be worse for the average American than the enormous price rises we’ve already seen in energy and food and other products.
Americans are hurting in their wallets now. I don’t see why they would care if we’re technically in a recession or not, although entering a recession can make things worse, especially unemployment rates.
Wall Street is in a bear market, energy and food prices are up a lot. It is very likely we will go into a recession. The only “good” news is that overall inflation prob. won’t go up. Everyone is using every cent they have to pay for food and energy and other essentials–and as little of those as they can get away with. If you have a lot of money, it’s a great time to buy real estate and cars and lots of other things.
JiangxiDad on July 10, 2008 at 4:53 PM
Right again.
JiangxiDad on July 10, 2008 at 4:54 PM
Well you proved my point, you only know the theory, not the practical.
That could not be further from the truth, the fact is Chinese plants do not have to have the VOC standards, the OSHA standards, the taxes, the licenses we had to have. Their product is superior, the product displaced was hardwood for hardwood, pine for pine, better take another look at the information you are receiving. Hooker, Martin, Ethan Allen, many others, even Steelcase (metal) (hardly these are “low end”), moved or are moving their plants because the other countries have no real government standards. Every spray booth of ours has a VOC standard, exceed it and heavily fined, and that VOC certificate is a paid for license. Every one of our companies pay at least $1,500 per year to be registered with the Fire Dept., it goes on and on.
You limit yourself by you lack of knowledge of the subject…not me.
One other other alternative is to have the other countries comply with our standards, they are there for the protection of the environment and safety. We shifted our environmental problems offshore…gee that helps. Our taxes, fees, and regulations is what drove our manufactures out of this country, not labor. Our production per man hour exceeds any other country in the world.
right2bright on July 10, 2008 at 5:19 PM
China’s policy of subsidizing their manufacturing exports to the US simultaneously subsidizes US imports from China—to do the first is to do the second. Thus, they’re doing us a favor at their own expense.
Stupid economic policies in foreign countries do not justify stupid economic policies at home.
hicsuget on July 10, 2008 at 5:26 PM
Funny how you bait people, post controversial statements, then get offended when someone responds in like.
right2bright on July 10, 2008 at 5:27 PM
Its actualy weirder than you think.
As we progress in technology, experience actualy starts to become a handicap. I know of many long term well educated IT folks who are out of work. The trend is to hire lower wage kids straight out of school, because “old” technology skills are invalidated within 3-5 years. After all, if your looking for an .NET programer, does COBOL or Fortran experience matter? Especialy when because of said experience, you would probably have to pay him a bit more?
We also have so many automated tools now, that we designed and built, that a single technology person can maintain many more units than ever before.
Add in that we now usualy replace units, instead of actualy fix them… which exports even MORE jobs overseas (as thats the source of the units), and you have a technology structure that is using less and less manpower, at non progressing wages, to accomplish the same job.
Average MCSE (Micorsoft engineer) wage in 1996 was $67,000 a year… this year? $68,000 a year.
Its the folks with the business degrees that are making the money… because they have that piece of paper, not those of us who actualy work or understand the technology.
Romeo13 on July 10, 2008 at 5:28 PM
What???
Are you sure this is how you want to explain it? I think the stupid economic policies apply to your explanation.
right2bright on July 10, 2008 at 5:30 PM
You’ve outed yourself as a raving lunatic.
hicsuget on July 10, 2008 at 5:30 PM
Dumping by other countries to destroy our industries is not cricket. Your pearls are poor quality.
JiangxiDad on July 10, 2008 at 5:31 PM
You’re right, of course. Gramm should have specified which American people are the whiners. It could have been a great moment of truth if he’d stated that the difference between Dems and Republicans is that Republicans have always stood for the “can do” attitude; that we stand for the determination to make it through adverse times without government assistance.
Connie on July 10, 2008 at 5:33 PM
If you have been paying attention at all, you will notice that ALL of the major banks in the US are broke! EVERYONE of them! Inflation is ticking up, and there is no place to make money in the stock market right now. The cost of petroleum is killing both consumers and businesses. I have seen nothing intelligent coming from either the Republicans or Democrats at this point as a short-term solution to these problems! The Republicans had plenty of opportunities to increase domestic drilling when they controlled the White House and Congress but did nothing (John McCain) so it’s funny that he now complains…
sabbott on July 10, 2008 at 5:33 PM
Still wrong, both in fact, and as policy. All Americans are hurting from rising prices. Attack Dem. leaders/ideas if you want, but no American people–including Dem. voters.
JiangxiDad on July 10, 2008 at 5:36 PM
I’m glad Graham is helping McCain. This guy may sound like a Gomer, but he is an economic genius.
Harpoon on July 10, 2008 at 5:41 PM
No, its basic thermodynamics, not economics.
By paying subsidies to their manufacturers, they are creating the capital needed to grow their manufacturing infrastructure. End result? People don’t invest in that industry here in America, as its won’t make money, as we can’t compete with the prices from overseas. Our infrastructure for that product declines, or ceases to exist. They then slowly raise prices until the subsidy is no longer needed for their infrastructure to be self sufficient, or profitable.
Essentialy they are using government funds to invest, instead of letting a stock market type environment dictate investment capital.
In other words, while our government spends our money on overseas wars, or give it away to other countries, or give it away supporting Medical benefits for illegals, they are investing in their country.
Romeo13 on July 10, 2008 at 5:41 PM
How exactly do we force compliance with OHSA, enviromental standards, etc. without erecting trade barriers? As Ed points out in his analysis, protectionist legislation played a large role in causing the Great Depression. Let’s not go there again. While economists disagree over many things, basically they all agree on the huge benefits of free trade. Keynsians, supply-siders and monetarists all basically agree on this point.
The creative destruction of capitalism will destroy certain industries over time, as it should. It will reallocate capital to where it works must efficiently. That means certain plants will close in America and rellocate to Asia. This lowers prices and helps consumers including lower income consumers who, as many here have pointed out, are currently suffering from higher prices in food and energy. You mention our producity as evidence we can compete; yet it is precisely our outsourcing of jobs intensive in unskilled labor that make us more productive. Certain cities, industries are hurt in capitalism as capital is reallocated, but this process redounds to the benefit of all the consumers in a society. I think we we should offer retraining, etc. to displaced workers to help ameliorate the negative effects of creative destruction, but to try to prevent it altogether via proectionism is a recipe for prolonged stagnation.
phronesis on July 10, 2008 at 5:42 PM
So Phil thinks the greatest nation on earth is great because we grew at about 1%. And that 1% is in the service area, not manufacturing. It wasn’t in real homes, cars, fuel (oh yeah, I think fuel is not part of the formula now), it was service and much of that from unskilled labor (read illegal immigrants). Isn’t our population growing at a little over 3%, so we are 2% behind? Or maybe it is weighted, see we don’t know what figures he is really using.
As the baby boomers get older, what do you have to replace that Mr. Gramm?
right2bright on July 10, 2008 at 5:52 PM
He’s not saying 1% GDP growth is good; it’s clearly below trend and a sustainable trend of 3-4% growth is about as good as it gets for a mature economy. The point is its not recessionary. You implement protectionist policies and you can revise that sustainable trend to 0-1%, even if you save GM for a few years. And technology also has a lot to do with the secular decline of manufactoring, which would remain the case even in a more segregated economy.
phronesis on July 10, 2008 at 6:00 PM
Sometimes the truth hurts. Sadly we have become a nation of whiners. I hear it every day here at the evil mortgage company I work for.
Jason Lewis had a great comment awhile back, “We have a lack of national resposibility.”
VikingGoneWild on July 10, 2008 at 6:02 PM
right2bright:
I think I failed to respond to a comment you made earlier. The guy {who sold his truck farm} did not pay the help more for the same reason some people can not pay the increased minimum wage to employees. The product did not bring enough of a return to justify the labor costs. It is about return on labor. And it is also about the fact that people are not desperate enough to do that kind of work.
But still that is not about illegal immigration either. It is about people having everything they think they want.
I think Gramm’s point was that the Democrats were whining and over reacting, and they are. People want too much, they are not realistic. I know gas prices are a drag, they are hard for me to pay too. I live in a rural area and I have to drive. But I can remember 1980, when people were carpooling in junkers. I can remember when people were just happy to get a job, forget the 401K plan.
That is what a recession is like. This is not a great time, but it is not a bad recession or a depression either.
Terrye on July 10, 2008 at 6:03 PM
Some large percentage of our population is in direct competition with foreign workers in 3rd world nations who make less. The numbers of those Americans keep rising, and the skill level of the jobs is on the increase as well.
Engineering and accounting are two examples of highly skilled jobs that are also now going offshore.
Why not have an accountant in India do your tax return for $100 bucks instead of paying $500-1000 here.
As more of the outsourced jobs become white-collar, the attitudes here will shift more and more in favor of more action to halt or slow the “creative destruction of capitalism.”
Why do we need American economists, engineers, scientists, accountants, farm laborers, nurses, teachers, etc. when others are willing to work for so much less.
I have to believe that our country’s economic system was chosen to maximize the living standards of Americans, and not to maximize the success of global capitalism. If both can be done, great.
But saying that rising wealth in Bangalore or Shenzhen while wealth falls in Pontiac is OK because capitalism works that way isn’t going to cut it.
JiangxiDad on July 10, 2008 at 6:12 PM
Being PO’d doesn’t make you a whiner.
VikingGoneWild on July 10, 2008 at 6:13 PM
Well, we just plain disagree, which is alright.
You see if we are so concerned about the environment, then why allow other countries to destroy it? We basically shipped environment problems overseas, does that make sense?
Where you and I most disagree, is you think it is okay to have burdensome standards on our manufacturing and force them to leave our country. That is not a natural economic shift, that is government applying pressure and determining the economic shift.
Better take another look at what jobs are going overseas…unskilled certainly, but skilled, definitely (India? Japan? and now China? and now Vietnam). BTW, seen who is in the MBA programs at MIT lately?
That is what you get from a book, not real life. It is moving our products out from under government control that makes it profitable, not productive. We can produce, we can’t profit, the government makes sure of that.
It is the creative destruction of government, not capitalism.
Your thesis is well written, but from a textbook, not from fact. Great theories, but they don’t exist.
You mention free trade, free means equal field, not taxes or fees on either side, it is not free trade when the competing do not have to meet the same requirements. That is they can destroy their rivers, we are forced to keep ours clean. So Nike can move to China, destroy the environment. When they were coining the phrase free trade, government was meant to be kept out, no one would have thought of the fees and licenses it takes to run a business.
I am taking a guess, and do not mean to offend, but are you in the manufacturing business?
Can you name the manufacturing sector that has grown in the U.S.? Maybe the biopharmaceutical manufacturing at 36%, but that is still a fairly small segment compared to autos, steel, wood, furniture, plastic, etc.
right2bright on July 10, 2008 at 6:18 PM
I think your being a bit optimistic about the long term prosperity of this country…
Dollar has been devalued about 40%. So the worldwide buying power of your savings for retirement is now down to about 60% of worth…
Add in the 20-25% decrease in the stock market, where most of us have our 401Ks for retirement savings, and we’re looking at a better than 50% drop in the reitirement saveings of those babyboomers who are about to retire.
Thats a MAJOR standard of living hit…
Romeo13 on July 10, 2008 at 6:21 PM
JiangxiDad on July 10, 2008 at 2:14 PM
Clinton closed Southern Utah’s mineral resources from land owners so as to prevent Americans from mining clean coal and import it from China instead. Global marxism’s at play here thanks to the Democrats and green pea-brains.
maverick muse on July 10, 2008 at 6:23 PM
Seriously, Dems.
F off.
I’m so sick and tired of the haughty “How dare you…” rhetoric whenever they are criticized.
Or, in the case of our worthless dimwit Speaker of the House, the president is “beneath the dignity of his office”.
(And, as we know, in the case of that speech regarding appeasement, he never even mentioned the Dhimmicraps.)
Just who the f!*# is out of touch, Madam Pelosi?
Drilling is a hoax, aye?
Well, what’s your big idea?
Approval ratings, madam.
Google it.
Hawkins1701 on July 10, 2008 at 6:31 PM
hicsuget on July 10, 2008 at 2:55 PM
as much as anything besides intelligent and amiable, it’s infiltration; collect data, test the water, note responses, note hot button issues, decide how best to blend in, make contacts and network, find what phraseology works, how best to manipulate, how to attack most successfully with propaganda, and conclude INITIAL argument on communist party line
maverick muse on July 10, 2008 at 6:34 PM
And that enables “everyday low prices” at Walmart. Without that prices would be higher and all American consumers qua consumers, rich and poor alike, would suffer declining real wealth.
And as that happens newer industries and jobs will also be created to employ those people. I assert this based upon the last few decades of data. Globalization has reduced our unemployment rate in aggregate even as it has eliminated some jobs outright and moved others offshore. Notice that technology is now the biggest component of the S&P 500 and a source of strength in today’s troubled labor market. That whole sector was created by global capitalism.
That is my goal as well. I believe free trade is the best way to accomplish this and basically all economists agree with me.
I’m not saying that at all. I am an American citizen, not a citizen of the world. I wish to maximize the wealth and power of my country. Free and open trade is the best way to eachieve this end. I agree that dumping is unfortunate even though it does lower prices for American consumers in the short term, but starting a trade war over it would be a cure far worse than the disease. I do agree that we must recognize politcal reality and fine-tune our message to help persuade voters, but making a demagogue of free trade a la BHO isn’t the answer.
phronesis on July 10, 2008 at 6:34 PM
Put Marie’s quote in full context for your own bearings, unseen. There’s always more to something that what you or I know. Perhaps I overlooked it, but was Gramm’s interview actually an RNC ad? Context matters, and Gramm is entitled to his opinion. You don’t like his opinion, fine. But you lack the superiority to say that you are more correct than Gramm when you won’t even recognize CONTEXT. It’s an opinion. The Great Depression, however, was real–not just an opinion. Be grateful for what you have today while you have it. You may have less in the future; you may have the same; you may have more. Regardless, appreciate what you have now. Isn’t that what Gramm covered?
maverick muse on July 10, 2008 at 6:44 PM
hicsuget on July 10, 2008 at 3:45 PM
+1
maverick muse on July 10, 2008 at 6:48 PM
wash your mouth out with soap
maverick muse on July 10, 2008 at 6:49 PM
maverick muse on July 10, 2008 at 6:34 PM
/snark
maverick muse on July 10, 2008 at 6:52 PM
And I thought Bush was the best democrat out there, but wait, Graham is closing fast!
Monkei on July 10, 2008 at 7:06 PM
LOL… been in technology for 29 years, and I see more senior technology people UNEMPLOYED than ever before.
Feel free to call a technology help desk, and then guess what country those jobs are in.
Feel free to see where most of the components come from, where they are manufactured.
As to the SP500 it is essentialy (before the recent drop) right where it was pre 9/11. If you put your money in it long term you would be right back where ya started. I know, I’ve watched it… for years…
Romeo13 on July 10, 2008 at 7:06 PM
There really isn’t a way for me to argue with anecdotal evidence. I’m not saying manufacturing isn’t declining, as both anecdotal and the statistical data bear that out. The manufactoring sector in the US is in secular decline and has been for quite some time. I am saying that the very processes which have been causing that also have given rise to other sectors which have provided growth and new employment which have made the country as a whole more wealthy and kept unemployment low. The statistical and economic data does bear this out. The 6% unemployment that people talk about with trepidation today would have been considered full unemployment a few decades ago. I’m all for taking steps to make our manufacturing industry more competitve such as relaxing regulatory constraints and lowering corporate taxes but the imposition of protectionist policies will harm the country as a whole and thus should be avoided.
As for my profession, I’m one of those evil capitalists. I’m a research analyst for an institutional investment firm.
phronesis on July 10, 2008 at 7:35 PM
Technology is relatively strong right now. Profits are growing at a healthy clip and its labor market has avoided the extreme distress in the financial services sector. And it’s a huge source of both profit and employment compared to what it was decades ago. That is my main point. To reduce the whole sector to call center jobs is ridiculous.
On your point about the S&P, that doesn’t refute anything that i’ve said. I was just using the relative size of various sectors to demonstrate that while one sector may contract other sectors can expand to provide growth and employment.
phronesis on July 10, 2008 at 7:46 PM
I actually belonged to 4-H when I was a kid and had the best garden in Okanogan county three years in a row till we moved. It ain’t rocket science.
If someone has to rely on illegal labor in America to succeed they should just hang it up.
MB4 on July 10, 2008 at 9:03 PM
Complaining about Juan “McCain/Kennedy, McCain/Feingold, McCain/Lieberman, McCain/Gore” McBernie is not complaining about a conservative.
You are seeing things that aren’t there.
MB4 on July 10, 2008 at 9:09 PM
Let them eat cake, I suppose.
MB4 on July 10, 2008 at 9:12 PM
Having opinions that are not the same as yours is not “baiting” you. At least it shouldn’t be. If it is you have a problem.
Not “in like” at all as I did not call someone a bigot and anti-Semite.
MB4 on July 10, 2008 at 9:17 PM
Terrye, I really don’t know where you stood on these issues around or on June 2007, but here is my input – if it applies.
Right… like the immigration reform elites who call the others bigots….
So then, we have resorted to such a low level of debate that the real issues do not stay in the cross hairs any longer.
And it was instigated by who?
It’s only the the real elitist bigots who resort to such name calling!
NEVER was there any discussion from us “obstructionists” about not supplying farm workers where needed!!
That was an intelligence insulting, bigoted charge, led by none other then the
cottonlettuce-picking Chertoff (and others) himself!!As the saying goes.. the rules are set by the aggressor.
After all those intelligence insulting charges from the immigration reform elites, all bets were off the table for having an intelligent debate!!
Do you not see this you bigoted pricks!?
How would you like to be called bigots?
How does it feel?
See there.. it would be much better if you owned up to your sanctimonious screw ball reasoning and humbled yourself to serve the USA rather than your selfish interests.
What chance is there that we see the elitists humble themself anytime soon?
Mcguyver on July 10, 2008 at 9:18 PM
Nailed it.
MB4 on July 10, 2008 at 9:20 PM
rockmom on July 10, 2008 at 4:40 PM
+1
PC is denounced by the rabble until the rabble is made uncomfortable and then PC is “in” again.
Gramm gave the Post an interview. WE DON’T GET TO SEE THE INTERVIEW. Instead, the Post cut/paste according to their own agenda Gramm’s content. We don’t get to read the badgering reporter asking the same question 20 times in hopes of getting a the answer he WANTS if he just asks again. OK, Gramm laid it on and now he’s taking the heat, not for his message, but for a snip that may well have been deserved by the reporter who pranced with glee to the computer to apply his personal rebuke to the public. Also, Gramm left politics and has enjoyed an insulated life for what–a decade now? He enters on stage right only to be ambushed by the press, the very press he’s criticizing.
Geez, I read the article. No one’s talking about Gramm’s economic outline, but stuck on the dumb buzz instead…3 pages of stuck on stupid. And by the way, morons need not respond. You’ve done your work and fed bobama at your own expense just because your feelings got hurt BY THE PRESS!
so much for “it’s not what you say, but how you say it” when what you organized and presented as an economic policy is ignored completely in favor of an off the cuff rebuttal to an nagging typist story-teller paid to take sound bites out of context and twist to support Obama at all cost. How many times must the public fall for the same trick before they get wise to it? Read the entire article from the Washington Post.
Then, let’s WATCH the entire interview and see if I’m right.
maverick muse on July 10, 2008 at 9:43 PM
Hey pabarge… shut the hell up. Use your brain. Then continue shutting up some more.
Clinton had the first shot to approve drilling in ANWR but vetoed it. (He was busy drilling something else.) The economy under Clinton was fantastic thanks to late 80s wall street fever followed by the dot-com boom. Bush was in office only eight months before we were attacked. Then the dot-com bust occurred, something also beyond his control. His main priority since then has been to protect America.
Nobody gave a crap about oil prices a few years ago because they were still reasonable. In 2004 I was griping because I drove 100 miles a day and gas was around $1.80. Now I pray for that price again. Oil pricing runups have occurred mainly under the DEMOCRAT-controlled government, one elected by close-minded single-issue liberals who are now grumpy because Pelosi and Reid are even less effective than the president they hate so much.
So again, shut the hell up. I dont usually stoop to name calling or offensive tactics, but I’ve had a rough day and mental midgets like you tend to rub me the wrong way.
Phil is right, we are a nation of whiners. No red ink on Johnny’s horrible homework. No placing kids in time out or ‘embarassing’ them in class for pointing out mistakes. A nation of spineless babies is in the making, we need to grab this pendulum and throw it back the other way NOW>
cannonball on July 11, 2008 at 12:37 AM
I’ve spent most of this thread citing economics textbooks as references for my statements. Perhaps you could cite a thermodynamics textbook that backs up your statement.
What’s that? You can’t? Because thermodynamics is physics, not political economy? That’s what I thought.
LIke I said before, though, China is subsidizing our consumption. They’re doing us a favor. That we are failing to save and invest at home is a completely different matter. Ceteris paribus we’re better off with trade with China than not, and ceteris paribus we’re better off if our trading partners subsidize their own exports.
When the Chinese government subsidizes manufacturing investment, they are mortgaging their present for their future. It’s our fault, not theirs, that we’re mortgaging our future for the present.
hicsuget on July 11, 2008 at 12:49 AM
On this blog I’ve seen you and other YEC types argue obstinately against the teachings of science when they disagree with the conservative position on biology curricula. It strikes me as very strange that you and so many others here oppose with equal obstinance the teachings of science when they agree with the conservative position. It’s highly irrational, but at least you’re consistent with it.
Also, for the record and contrary to what you seem to indicate, a concept is not disproven merely by your failure to understand it.
Finally, it must be asserted that some textbooks do contain facts—those of us who did not go to Bob Jones University can verify this from personal experience.
hicsuget on July 11, 2008 at 1:28 AM
You’ve outed yourself as a raving lunatic.
hicsuget on July 10, 2008 at 5:30 PM
You know if more economicists studied human nature, thermodynamics, biology and other life sciences they might actually be right more times than they are wrong.
This is why most economists usally end up losing their shirt in the market. They just can’t understand why their perfect little theories /laws don’t work in the real world.
unseen on July 11, 2008 at 1:36 AM
maverick muse on July 10, 2008 at 6:44 PM
context doesn’t matter. you think the dems or the media oops repeated myself will put his quote in context? you think the majority of people will read the context of the quote or do you think that most people will see the headline Repbulic Gramm says AMericans are insane? Mentally unstable? bunch of whinners?
I am sure the queen of France said her statement in more context. Did that save her head? You do not say certain things no matter what the context is. you do not call the AMerician people clingy, insane, whinners, bible thumping, gun crazied etc. You just don’t go their esp on the national level. you attack the media, you attack the dems you do not attack or in any way suggest the people you want to vote for you or your man are nuts.
unseen on July 11, 2008 at 1:52 AM
hicsuget on July 11, 2008 at 12:49 AM
you might want to goggle the law of entropy. Pay close attention to its study in relation to evolution and natural selection.
While your doing that research you might want to study 1st law of thermodynamics also.
Throw in the feeding habits of scavengers, and hunted prey.
you can also study the evolutionary mechinisms that plants have formed to carry their offspring far distances with no energy used coming from the plants.
While you are in the biology section look up how parasites form different types of bonds. From totally destructive to totally mutally beneficial ( you can apply this to Congress, CEO’s and the AMerican people very easily)
look up the ramifications of uncontrolled animals population. take the wolf out of the equation and you have deer dying of starvation.
All of these real world examples when combined with basic economics explain the economy better than most economists can ever hope too.
If you are really feeling like learning something study some political science and might I suggest the Art of War, and the Prince by Machiavelli.
For shits and giggles read up on Lenin and hitler, the I have a dream speech in regards to immigration , the cost of the jim crow laws on economic output, the long term cost and benefits of slavery and second class citizens, and the reunification of Germany.
Now once you read that take your knowledge of economics and your new found knowledge of real life and its processes and make a BETTER arguement.
Oh yeah and don’t make the mistake that spelling and grammer determines a person’s IQ.
If you are up to it you can even study some Graham and Buffet to really see how the stock market works.
And least I forget, the study of religion will teach you alot about human nature and its effects on economics.
there’s more but a well rounded education takes years to achieve. And placing that knowledge together from the pieces given is more an art than a science.
unseen on July 11, 2008 at 2:16 AM
hicsuget on July 11, 2008 at 12:49 AM
All things being equal we are not better off making our enemies wealthy and us less so. all things being equal we are better off keeping our enemies in poverty not making them able to attack us, grow there economies, build their military and compete with us on equal terms.
all things being equal there is no such thing as free trade. Free trade does not exist now and it never did.
unseen on July 11, 2008 at 2:22 AM
Finally, it must be asserted that some textbooks do contain facts—those of us who did not go to Bob Jones University can verify this from personal experience.
hicsuget on July 11, 2008 at 1:28 AM
careful there your “better than thou” face is showing. Or is that your country club upbringing?
Next you might be calling us all nativists or xenophopes or say we hate chineese people.
unseen on July 11, 2008 at 2:25 AM
With his first couple of posts, I assumed he was a professor. The digs, and boasting, and arrogance, and inability to draw from any real life experiences, later convinced me he is newly graduated. In twenty years he could make a fine economist.
JiangxiDad on July 11, 2008 at 7:49 AM
When Gramm called the US a nation of whiners, I somehow think he had socialist/liberal democrats in mind. I wish he had been clearer.
abcurtis on July 11, 2008 at 8:04 AM
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