Jewish World Review March 1, 2004 / 8 Adar, 5764
Peter A. Brown
Politicians can't repeal economic laws
http://www.jewishworldreview.com | Few political movements are more potentially dangerous to your well-being than those that try to repeal the laws of economics. That's why politicians who thrive on anecdote and resort to emotion to make their case are dangerous.
By doing so, they implicitly ignore the imperative that economic policy should be about the big picture and the long term.
A White House adviser opened the silly season by acknowledging the obvious - that "outsourcing" of U.S. jobs will continue and might help the economy in the long run.
Armed with delusions of grandeur that come with high office, Democratic presidential candidates argue they can make changes in the tax laws that will stem the job loss.
Republican House Speaker Dennis Hastert has not suggested such tax changes but is infected by the same mentality that believes politics can trump markets, showing economic ignorance defies party labels.
Congress can't change human nature, which dictates that people act in their economic interest and put money where it is best rewarded.
The promise of such political, but economically foolish, fixes creates a climate that could produce conditions similar to those leading up to the Great Depression.
Although globalization sends some jobs overseas, this is the uncomfortable part of an overall positive economic evolution.
Yes, this exodus has picked up steam, but the gloom and doom that accompanied its early stages a decade ago proved false because the economy was allowed to adapt instead of being "saved" by political fixes. The same will occur if demagogues don't make things worse.
Wisely, when President Bush was forced to assure anyone who might think he isn't concerned about the current spurt of job migration, he didn't make the intellectually dishonest argument that political fiat could stem that exodus.
Our first MBA president knows better. But the Democratic Johns who want his job, Kerry and Edwards, seem to think otherwise.
Kerry, a lawyer who voted for free trade and represents high-tech exporter Massachusetts, is less dangerous because his stance is so obviously political. Like his vote for the Iraq war and subsequent criticism, his economic rhetoric is aimed at primary voters, who focus more on the job loss from trade than the growth and hiring it creates in the nation overall.
Not surprisingly, because his only experience with making money has been marrying into it, Kerry's comments display an economic naivete and misunderstanding of how the private sector operates.
Sen. Edwards, whose knowledge of the private sector comes from making millions suing businesses, actually appears to believe the trade nonsense that comes from his mouth, perhaps because his Carolina roots have exposed him to the textile-industry outsourcing.
His rhetoric embodies the false prophecy of easy and dangerous answers - that economies can be made subservient to political whims - to complicated questions.
Globalization has benefited most Americans enormously, but it is a two-way street. U.S. firms and their employees have mostly prevailed, but lower-paid, foreign workers have replaced some Americans.
Over the next decade 3 percent of U.S. jobs are projected to go overseas, hardly enough for a reappraisal of globalization's benefits. Those figures don't include new jobs created as U.S. companies become more competitive by making productive investments with the savings.
Job losses are a tragedy for the unemployed, and we must do everything possible to help them. America can retain its standard of living only if it leads in high-paying industries.
Economic policy must be about the future, not the past.
Trying to reverse the outsourcing tide is both impossible - because of the laws of the marketplace - and foolish, since most of those jobs are not the ones government policies should be aimed at creating.
The news media, which have rarely met an anecdote they can't make into a national crisis, are part of the problem. By dwelling on the half-empty glass, the media create the frenzy that leads politicians to promise to reverse the sands of time.
In 1991, the Philadelphia Inquirer published a massive project about the then-supposed foundering economy. "America, What Went Wrong" focused on the decline of the smokestack economy and predicted a middle-class demise from it.
The authors won awards, made it a big-name book and got better jobs.
Bill Clinton made great use of it on the campaign trail, but in office had the economic common sense not to confuse rhetoric with reality.
History proved the series hilariously wrong. The 1990s were an incredibly prosperous decade because U.S. firms had changed to compete in an emerging global marketplace.
The lesson here is that looking backward creates nostalgia; focusing on the future produces results.
You'd think the hand wringers would have learned that by now.
02/19/04: The question prez, Kerry won't debate