Free Markets, Free People

Questions and Observations #7

Lots to comment on, little time in which to do it (it is a holiday weekend after all).  But here are some stories that caught my eye that I may do a more extensive commentary on at a future date.

Thomas Friedman pens a column in which he explores what it will mean if America is no longer the superpower of the world.  Quoting Michael Mandelbaum, the Johns Hopkins University foreign policy expert, he makes the case that our debt and the subsequent frugality it will require is essentially going to make us retrench and probably withdraw much of our foreign aid (not just money, but troops and fleets, etc., which have helped keep the peace over the years).  He notes that when Great Britain gave up its “global governance role”, the US stepped in.  The question is, when the US pulls back and creates the expected power vacuum, what country will try to fill the role? 

After all, Europe is rich but wimpy. China is rich nationally but still dirt poor on a per capita basis and, therefore, will be compelled to remain focused inwardly and regionally. Russia, drunk on oil, can cause trouble but not project power. “Therefore, the world will be a more disorderly and dangerous place,” Mandelbaum predicts.

Cast your eyes toward a the Middle East.  While Turkey and Iran don’t have what it takes to step into the shoes the US has filled, each certainly feel that the withdrawal of us influence presages a much greater leadership role for them in their respective region.   China may feel the same thing about the Far East. Friedman concludes:

An America in hock will have no hawks — or at least none that anyone will take seriously.

That’s true, I believe – at least while a Democrat is in the White House or Democrats control Congress – not because they’re suddenly frugal, but because they’d prefer to spend the money on other things.

But this is my favorite paragraph:

America is about to learn a very hard lesson: You can borrow your way to prosperity over the short run but not to geopolitical power over the long run. That requires a real and growing economic engine. And, for us, the short run is now over. There was a time when thinking seriously about American foreign policy did not require thinking seriously about economic policy. That time is also over.

Some of us Americans have know this was a probable result for years. Welcome on board, Mr. Friedman. It’s about freakin’ time.

————

If you read no other column today, read George Will’s about the global warming industry.

A sample:

The collapsing crusade for legislation to combat climate change raises a question: Has ever a political movement made so little of so many advantages? Its implosion has continued since "the Cluster of Copenhagen, when world leaders assembled for the single most unproductive and chaotic global gathering ever held." So says Walter Russell Mead, who has an explanation: Bambi became Godzilla.

In essence, it’s analogous to something else we discussed not to long ago, the UAW is now "management". Will’s point is the former "skeptics" – environmentalists – are now the establishment. Funny how that works.

———

According to the New York Times, Democratic leaders are in the middle of doing what can only be characterized as “political triage” concerning the upcoming House mid-term elections.  Reality, as they say, has finally penetrated the happy talk and leaders are taking a brutal look at the chances of all their House members:

In the next two weeks, Democratic leaders will review new polls and other data that show whether vulnerable incumbents have a path to victory. If not, the party is poised to redirect money to concentrate on trying to protect up to two dozen lawmakers who appear to be in the strongest position to fend off their challengers.

My guess is the Blue Dog contingent is about to be cut loose.  The leadership probably figures that losing those seat isn’t as big a problem as losing seats in which automatic votes for whatever the leadership puts forward are assured.  That would be members of the Progressive caucus and the Congressional Black caucus for instance.  The good news for Democrats is most of them are found in what are considered “safe” districts.  So they’ll go in the “will live with minimal treatment” category. 

The Blue Dogs will most likely go into the “mortal” category and receive little money or backing.  They’ll simply let them die, politically  It is those in the big middle, in perhaps marginal districts that could go either way or those who’ve survived tight races previously in districts that may lean slightly to the Democratic side which will get the money.  These “critical but can be saved” members will get the lion’s share of the money and support allocated for the mid-terms. 

Whether they can save enough of them to avoid the magic 39 seats the GOP needs, however, remains to be seen.  My guess is it would require a miracle – and possibly that would require some of the Blue Dogs to squeak out a victory.  But if those patients are left to pass quietly away when some might have been saved, the Dems may rue the day they decided to pitch them outside the tent and leave them to be brutalized by the political elements.  Or said another way – the Dems may outsmart themselves, this strategy could easily blow up badly in their faces and it may be they that assure the 39th seat by not fighting for all of them.

~McQ

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14 Responses to Questions and Observations #7

  • A little Devil’s Advocacy on Thomas Friedman…
    Prior to WW II, the US economy was in a depression with worse unemployment than now. I think we may need to discount the idea that countries in economic distress cannot turn around and deliver war fighting when needed.
    Also, the UK as late as the Falklands were still “punching above their weight.” Thus, the US could still do this for some time after our heigh day.
    Part of our feeling of economic malaise is our own doing, part of it due to globalization, and some of it is just the current perception.

    • “Prior to WW II, the US economy was in a depression with worse unemployment than now.”

      True. And yet we had a rather significant military presence in China, the Phillipines, and central America.

    • In WW2, the US was able to ramp up through massive deficit spending. By selling bonds to Americans.

      Now, Americans are in debt to credit cards, car loans, and morgages. Our country is already running massive debts, and we have the structual problem of massive entitlements that didn’t exist in 1941 (sure, SS was already created, but few were drawing from it).

      But there is another major difference. After Dec 7 1941, we had a reason to invest in military spending. If our focus now is deficit reduction, military cuts are likely the path forward, until we again face a Dec 7 type of situation. While that happens, the world will become a harsher, more dangerous place, but it will do so slowly on the margins, costs to trade will increase, etc. And most will barely notice the increased violence on the news.

  • In the foreign policy/economics arena, I wonder how its eventually going to be done to stop the “export to the USA” semi-mercantilist model in the Far East. Even Japan is still trying to weaken its currency in 2010 t keep exports afloat. That seems to say that the model is very, very hard to escape.

    • I hate the idea of trade restrictions or a trade war, but that is what it might take to stop them from thinking they can continue to grow their economies on cheap US exports. I am not calling for it, but just saying, that might be what it takes.

      • Trade wars aren’t normally engaged by the side who has the advantage in trade.  Would you rather lose %15 or risk %100.  Of course US politicians were the exception.

      • I agree completely. I don’t want a trade war and they don’t want a trade war. But they have boxed themselves in with the large amount of reserves that will automatically lose value when they appreciate their currency. It may be a situation where to break the cycle it will require the foreigners doing something bad to let Chinese politicians sell a change.
        I think the best way to have done this was to partial default on Fannie Mae bonds the Chinese held. Then their population would have said, “hey, what if the Americans don’t pay us back? Is it a good idea to keep sterilizing our export earnings?”

  • McQ, have you considered that those abandoned to their fate actually have an option? They can decide to sit it out – demonstrating their “loyalty” in return for the “loyalty” they have received.

  • Let’s face it.  That Cluster of Copenhagen was akin to those famous meetings of the Mafia “Families” in the Catskills back in the 1950’s.
    This wasn’t just a CO2 control action.  The whole idea was to set an international eco-nomic industry order that would guide the world for decades to come.  Those already industrialized would trade that continued right with countries who have raw materials not to industrialize with some “payments.”  Meanwhile, every country would get control of their populations with those “carbon taxes.”
    It would have probably worked if not for India and China who said thanks but no thanks.  China figured they already had control of their populations through the Communist Party, so why did they need “carbon taxes” ?  Both had emerging industry economies that were basically being asked to pay billions to continue doing what they were already doing.

    • I think you are giving them too much credit for forward or strategic thinking.  My own take is that the alarmists got away with a fast one with the whole Ozone hole thing, then they got a useless sulphur exchange set up with the Clean air act of the early 1990’s. 

      So they said, those idiots will believe anything, so how can we make a whole lot of money?  And they came up with global warming.

      Yes I actually do now think it was all a huge conspiracy to rape the public of billions of dollars.

      • There were conspirators and there were even more useful idiots.
        When you see this many politicians line up behind anything, there is always more there than the “public interest.”
        The biggest problem that I had is what brings the 3rd World to a “Carbon” discussion ?  Why would they be negotiating for “payments” ?   Sure, there were plenty of interviews with 3rd World delegates saying that they had no idea why the “developed” World would want to give them billions of dollars, but that leaves anybody with half a brain asking what does the “developed” World want in exchange ?  The notion that they are looking for a “moral absolution” for their immoral use of carbon is laughable.  These politicians wear morality only for display.  They want more.

  • An America in hock will have no hawks — or at least none that anyone will take seriously.

    That’s true, I believe – at least while a Democrat is in the White House or Democrats control Congress – not because they’re suddenly frugal, but because they’d prefer to spend the money on other things.

    The evidence on that point would appear to be already in, given the Clinton years wherein the only spending that was actually cut was defense spending .