Cybrpnk's Rantings

I have just returned from an amazing trip to southeast asia. Truly extraordinary to be in places where one has a completely different perspective on free trade and globalization. While most of the trip was spent in Vietnam (more on that another day), we did spend a few days in Cambodia. Enough to convince me that I owe my friend Jesse an apology: we don't have real poverty in America, at least not that I've seen. You were right about that. While I am sure that there is even deeper poverty elsewhere, the poverty in Cambodia makes American ghettoes seem middle-class; although the violence in many poor American communities makes life less tolerable than the basic living conditions would indicate. Yet it is unclear how replacing aid with freer markets, as recently proposed by Paul Wolfowitz to the World Bank, would help these people. Cambodia is a country that has not only been torn apart by thirty years of civil war, but also lost an entire generation of it's intellectual class. The Khmer Rouge saw to that.

See more ...

Many conservatives claim that America's economic model is vastly superior to Europe's, and cite poor economic growth and higher unemployment in Europe to back their claim. This usually leads to a whole line of argument about how business-friendly the American system is. Then there is the line about the need to continue cutting taxes and pushing deregulation to keep our economy humming along. All a very interesting story, which would potentially be salient if it were not built on sand. A closer look at the numbers shows that it is not so much that the US economy is growing faster than Europe's economy, but that our population is growing faster. Hardly an encouraging trend given the crumbling state of our infrastructure, and our continuing inability to manage sustainable population growth. As to unemployment, I have yet to see any solid methodology to allow for comparisons between American and European unemployment rates, but many economists believe that our unemployment is close to the 10-12% we belittle the Europeans for maintaining. That's right, despite the higher taxation, government funded safety net, regulation, etc., European economies are actually just as healthy as ours. And it is hard to imagine that anyone would choose long-term unemployment in the US over long-term unemployment in Europe. Or, for that matter, bottom-of-the-wage-scale employment.

If the conservatives are correct, and our economy would tank if we had European levels of taxation and regulation, Then we are doing something really wrong. If our economy would continue to chug along with that higher taxation and regulation, then it is reprehensible that we are slashing government services to the poor and middle class and trashing our environment just to enrich our richest citizens. So which is it: our economic model sucks and it is only low taxation and deregulation that allows us to be in the same league as the Europeans; or is it the case that all of those tax cuts and deregulation efforts really are just screwing regular citizens to make the rich richer?

In announcing his administration's commitment to a strong dollar today, our so-called president offered some deep insight into his grasp of economics, foreign trade, and globalization. It turns out that there is a simple solution to the trade deficit, and he has it for us: ``That's easy to resolve, people can buy more United States products if they're worried about the trade deficit.'' Thanks W., wouldn't have thought of that. Any suggestions about the apparent lack of interest most people have towards the trade deficit? Or ideas about how to find products made in America? Didn't think so. Truth is that if we leave the solution of hard economic problems to be solved by the buying patterns of those people who both care about the issues and have the resources (both money and time) to change their behavior based on those concerns, the problems will not get solved.

See more ...

The classic conservative approach to most social ills is 'let the market sort it out.' This reckless invocation of the market is a severe abuse of a sometimes useful tool that obfuscates critical discussions of policy. An excellent example of improper use of the market is our current approach to energy policy. Sure it's true that as oil becomes scarcer the price will rise, and that there will be periodic spikes in the price. But by the time the market really starts signaling that it is time to start looking for other energy options it will be too late.

To seriously address the transformation of our entire economy and infrastructure from an oil-sucking monstrosity to a world leader in conservation, renewable energy production, and efficiency will take not just significant investment, but far-sighted planning and sponsorship of high-risk blue-sky research. Markets have not shown much of an ability to generate either of these types of activity. Markets also have a horrible track record of passing over high-quality science and engineering in favor of slickly-marketed inferior products.

See more ...

Globalisation, we are told by the conservatives, is good for America. Why? On the one hand it lowers the price of goods, on the other it is good for the overall economy because it frees up labor resources to do higher value work. A nice theory, but one with significant flaws. First off, an underlying assumption is that not only will there necessarily be higher-value work to be done, but that Americans will be uniquely suited to do that work. Secondly, there has not yet been any serious discussion of the future of people who are not capable of attaining higher-value skills.

See more ...

I recently had a conversation with a good friend of mine who is fairly conservative. Part of what we talked about was the question of use of governmental regulation to enforce environmentally friendly policies in manufacturing. His argument is that the market should be allowed to sort this sort of thing out. If people care about such things, he argued, then they will be willing to pay a premium for them, and manufacturers will adjust their practices to accommodate this change in market preference. A perfectly coherent argument, but one which is deeply flawed. The most obvious problem is the vigorous battle fought by most manufacturing segments to prevent consumers from having access to the information necessary to make such choices. Another problem is the over-reliance on people's ability to make good long-term decisions; a requirement that seems to fly in the face of common-sense, academic research, and history. Finally, the foundation of this argument comes back to that old canard, the ability of the market to sort things out, which treats the market as some sort of omnipotent force of nature. Let's tear down these illusions.

See more ...