Free Markets, Free People

Andy Stern


Observations: The QandO Podcast for 04 Dec 11

This week, Bruce Michael, and Dale record talk about China, illegal immigration, and Egypt.

The direct link to the podcast can be found here.

Observations

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Former SEIU boss: We should emulate Chinese economic model

You can wade through all the trash he throws up there as a preface to his central point, but I’ll save you the trouble.  Writing in the WSJ, Andy Stern says:

The conservative-preferred, free-market fundamentalist, shareholder-only model—so successful in the 20th century—is being thrown onto the trash heap of history in the 21st century. In an era when countries need to become economic teams, Team USA’s results—a jobless decade, 30 years of flat median wages, a trade deficit, a shrinking middle class and phenomenal gains in wealth but only for the top 1%—are pathetic.

This should motivate leaders to rethink, rather than double down on an empirically failing free-market extremism. As painful and humbling as it may be, America needs to do what a once-dominant business or sports team would do when the tide turns: study the ingredients of its competitors’ success.

No poisoning the well there, huh?  The “conservative-preferred, free-market fundamentalist, shareholder-only" model?  Really?  Where? 

And why was it “so successful in the 20th century” and why is it having problems now?  Well that’s a fairly easy question to answer.   What happened increasingly in the 20th century that is at an all time high now?

Answer?  Government.  It has increased dramatically in both size and intrusiveness.  We don’t have a “free-market” system anymore.  Haven’t for quite some time.   It’s a convenient shibboleth used by opponents of free markets such as Stern.  We have a government that has, in the century cited, turned it into crony capitalism.  Any resemblance here in the 21st century to a “free market” model is purely coincidental.  And we now have a debt drag imposed by out of control government spending that has finally topped our total yearly GDP.

As usual, with those who think China has figured out how to build the socialist dream, they never figure in the damage done to the model that was “so successful in the 20th century” because doing so kills their entire premise.   Government is their vehicle to both wealth and social justice.   They have no concept of how markets work so are gullible enough to still believe that central planning, properly done, can work.  And they take the fact that China has risen economically as proof of their premise.

What they don’t do is look behind the curtain.   Stern talks about his trip there, “a trip organized by the China-United States Exchange Foundation and the Center for American Progress—with high-ranking Chinese government officials, both past and present.”

Yes indeed, very likely to see the underside of the economy is a show tour aren’t you?

A caller to Rush Limbaugh who spends a lot of time in China lays out the reality there:

CALLER: Because once you get outside of the main cities, there are still people plowing fields behind cows and oxen, still hand harvesting corn, grains, rice. I mean, it’s still very much a Third World economy once you get outside of the main cities.

RUSH: With a First World military.

CALLER: Yeah, that’s true.

RUSH: That’s where much of their spending goes. Their infrastructure is built on the cheap, too. Doesn’t take much wind to bring down some of their so-called powerful infrastructure. But, you’re right, and this is what President Bush was telling me, that the big challenge is keeping those peasants behind the oxen. Don’t [let] them into the city. The cities can’t handle them. The cities are teeming with people already. But it’s always been the case that there is this romance — the left has romance — with the romantic attachments to all these tyrannical communist regimes, and now they’re looking at China and you’ve got this Andy Stern guy and other people telling us, "This is what we need to be. We need to emulate the ChiComs. The ChiComs are doing it right."

This is simply the usual nonsense wrapped up in a little different packaging.  It is the leftist dream – a strong central government planning the economy in which it ensures social justice as its highest priority (btw, China is an environmental disaster area, but you won’t hear that from the likes of Stern).  And that doesn’t mean market capitalism, even if the Andy Sterns of the world want you to believe that.  

While he avoids the obvious problem of government intrusion and its disastrous effect on the economy, he does touch on the political problem we still endure.   We have politicians who prefer being Santa Claus to the Grinch and whose whole political horizon never goes beyond the next election.

But the central problem we have isn’t needing a new economic model.  Instead we need to go back to the old one before it was corrupted and distorted by government.   Instead of more government, as Andy Stern wishes, we need precisely the opposite – much less government.

If we want to regain our economic footing and dominance, what government needs to do is get the hell out of the way, get spending under control and pay down the debt (which should become its primary focus over the coming decades) to eliminate the debt drag it has created.

Other than that, it’s job is to be the night watchman, not Santa Claus.  Our problem isn’t economic models.  Our problem is exactly what Stern wants more of.

Obviously economics wasn’t his strong subject in whatever schooling he received and history was apparently completely skipped.  How else to explain the utter nonsense he pushes in his article?

~McQ

Twitter: @McQandO

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