Please read my critique of Obama's victory speech.

John Stossel wrote another gem: http://www.realclearpolitics.com/articles/2008/05/windfallprofit_nonsense.html

Read it and weep Democrats!

scott mcclellan might support Obama.

Ok.  Let me put this forward.  Socialism and Liberalism (classic kind, think free markets, Reaganism etc.) are opposites, ok? 
Or let me put it this way.

+---------------------M----------------+--------O------------------+
Laissez faire                      Managed Capitalism               Socialism

McCain is clearly near the correct side.  He might be too a bit closer to Managed Capitalism than I would like but they way I see it Obama could run as a SPD in Germany so... no thanks!  Obama wants to nationalize the energy industry, isn't that what you would call $150 billion green jobs?  But wait, is a green job limited to only energy?  What does he mean by that?  Hmm no answers ok... typical right?  He wants to nationalize Health Care.  Try figuring out how to lower costs instead!  He has economic nationalism which will raise prices and keep us less competitive while our brethren integrate into the global market.  We need to pioneer the market and stake out our share!  So fighting globalization is a bad idea.  I'm spent. 

More evidence.

And thank you to Hillary "Ramrod" Clinton and Barack Insane Obama for the continuing distortion.  Way to be honest with America.

http://www.newyorker.com/talk/financial/2008/05/26/080526ta_talk_surowiecki

Here is the Democrats' credo:

Improve the economy by expanding government programs, raising taxes, constructing more regulations, and stifling free trade.

Hmm forgive me if I pass on the opportunity to sign onto this crusade.

My fellow Republicans, some of you, like me, call yourselves fiscal conservatives.  We need to apologize.  We have increased discretionary domestic spending beyond reasonable levels.  We have driven up budget deficits and killed the value of our currency.  We have not driven down the cost of health care, we have not solved (privatized) Social Security, and we have not done enough to change to nuclear energy and fix the energy problems this country faces.  We aren't the party of water downed Democrats.  We are not the Socialist-lite party.

We need to reassess what we aim to do.  We're not Republicans because we have an affinity for the elephant and an animosity toward jackasses (although, personally I can't stand asses).

We need to take care of the environment and focus on allowing people to work hard to improve their lives.  This means scrapping virtually all entitlement programs but focusing on education, and job training.  We need to build infrastructure between businesses and community colleges... We need to improve the urban education sector in general.  You want to increase GDP?  Make the urban poor the urban rich.  More money in their pocket is more money in all of our pockets.

We must erase the culture of the mentality of entitlements for there is no substitute for hard work.  The answer to improving the economy, in the 21st century, in the long run is not higher taxes and more government spending.  If modern history has taught us anything it is that what I just said is true. 

The answer to globalization is not to cower in fear, hiding under tariffs, quotas and anti-free trade and immigrant policies.  The answer to globalization is to embrace it with trade, expanding horizons, getting industries to be more competitive.  Ironically enough Karl Marx had the right idea.  Marx was right in that he knew the slogan of the ideal economy: From each according to his ability, to each according to his need!
But Marx was wrong on how to implement this solution.  It's not a communist run state economy, but the free market, with limited regulation, that will result in this paradise of utopian allocation.

Who can we turn to in this time of crisis?  Who will lead us on the path to economic freedom and political virtue?  John McCain.

Dear Liberals,

Go back to school and learn about macro-economics.  Raising taxes != saving the economy.  Socializing the means of production != helping our country grow.  Opposing free trade != smart idea.  Let me edumacate you liberals on a few things.  There are two strategies besides free trade that a country can take for a global strategy towards goods and services; IS (important substitution) or EE (export expansion).  IS is a horrible strategy and practically killed the economic growth in India, China, SSA (sub-Saharan Africa), and Latin America in the 70's and 80's.  Then some of these countries switched to EE and BOOM off they went in the 90’s and today.  For further evidence of the strength of EE just look at the four Asian Tigers plus Japan – they have incredibly strong economies, sustainable growth and stable politics because of their EE + opening trade strategy.  IS is an incompetent strategy that none of the successful LDC's have used.  If you want to know why it is incompetent and don’t feel like taking the necessary classes you could take my word on it or you could google it.  If you are just so lazy and want me to do it just e-mail me about it.  BTW, guess who advocates IS in our country?  Yes, the lefties, Clinton and Obama.  Congratulations you have made us less competitive in a global economy.  If you guys win, and you see the mistake of implementing IS and fighting globalization can you PLEASE change your views?  Or better yet don’t put people in power who don’t understand how basic economic principles function!!!

Sincerely,

John

BTW I hope most of you know I am an ex-liberal.  So it's not that I can't understand where you are coming from, it's that I don't agree anymore where you want to go.

Do they really?

Remember Bill Clinton in the '92 primary?  He talked quite thoroughly about his opposition to NAFTA and free trade in general.  What happened in his Presidency?  Need I say more?  This is going to be the same way with Obama and H. Clinton.
So why do I think that?  Take a look at who they have surrounded themselves with.  Clinton has/had Mark Penn who is an advocate of free trade and whose PR firm worked for the Columbian government to promote it.  Why would she appoint someone as her chief strategist if they disagreed with her over one of her campaign’s crucial issues?  It isn’t just Penn either, Clinton’s group has long been associated with free traders.

Obama’s senior advisor Austan Goolsbee went as far as telling the Canadian government that his candidates anti-NAFTA talk was just that – talk, or as he put it, “political rhetoric”.

So why would Obama and Clinton make a promise that they never intend to fully keep?  In the past only 10% of the population would vote in the primaries.  This 10% is comprised of the ideologues and they tend to be in the far wings of American political ideology – so far left and far right.  Anti-free trade is one of the far left’s cornerstone issues.  So to get out the vote (GOTV) the candidates appeal to this crowd and provide them with whatever they want to hear.  In the general election or in their presidency the candidate swings back to the center.  How can they do this?  Because the far left and far right are going to vote for the D and R candidate anyway so it doesn’t matter that they get burned on one or two issues.  What matters to them is that the scum from the other side of the spectrum isn’t in power. 

Deep down every credible economic advisor out there is going to advocate free trade – and imo the candidates know it to be true.  They want to make this country stronger and that means freer trade.

Most Americans are anti-free trade, but then again the vast majority of Americans don’t know much about government and economics.  For example – do you think America spends too much on foreign aid?  Most people think so.  When asked, again most, people think we spend 10 to 15% of our fed budget on foreign aid.  They feel that 3-5% is ideal.  Reality check: we spend less than 1% of the budget on foreign aid.  Read the piece about free trade – we’re gaining jobs, and higher paying jobs at that.

So then why are Americans so hopelessly uniformed?  You can pick from a list of excuses, like the media is horrible here, politicians lie and distort the truth (or ignore it completely), we don’t read enough relevant material, apathy, prejudices, etc.  I blame the media and wicked politicians.  Check out this piece by Cokie and Steve Roberts about how the media can distort free trade http://www.zwire.com/site/news.cfm?newsid=19369849&BRD=1817&PAG=461&dept_id=68562&rfi=6.

The problem with most of us is that we don’t save and we overspend which leads to us living unsustainable life styles.  The problem with most of us is that we are not responsible citizens because we are not informed enough.  Who here can name both of their state senators, their governor , and their house rep?  Who here knows how they vote?  Who here has a basic understanding of economics so that when they vote they know what they are getting into?

Politics, Policies… it translates into dollars.  More specifically your tax dollars.  Apathy and ignorance are not an excuse.  Don’t let politicians play you like Nero on his fiddle as our lifestyle goes up in flames.

Professor Saggi interview 3/27/08

Professor Kamal Saggi is the head of the Southern Methodist University (SMU) Economics Department.  One of his specialties is trade.  As I promised, I asked Professor Saggi about free trade.  Thankfully for us he graciously agreed to the interview below!

This is a recap of what I asked Professor Saggi about trade:

He starts out with this question: Do you oppose free trade between New York and California?  Why not?  (Common sense here says no US citizen opposes it)  So why does drawing a border (like the one we have with Mexico) make a difference?  Regions in a country specialize in different things just like different countries specialize in different things – all kinds of things: rice, wine, textiles, services, etc.  It is best to take advantage of the differences.  Your goal should be to go for efficiency – maximum efficiency.  Efficiency means maximizing net benefits.  Free trade is a  positive sum gain for we gain and they gain. 

Professor Saggi then offered one of the most creative explanations to illustrate his point that I have heard: Should somebody like Kobe Bryant mow his own lawn?  After all he will be the best lawn mower, he has long strides, powerful arms, good control, perfect rotation, he is MADE for lawn-mowing.   But (as we all can appreciate) he shouldn’t because his time should and would be better spent leading the Lakers.  This same argument can be applied to trade.  Specialization and doing what you are best at leads to efficiency. 

Now I know a lot of you guys are asking about NAFTA – so  I asked Professor Saggi to shed some light on this issue:  In the scope of things NAFTA isn’t really big – or are other pacts for that matter.  The amount of US trade liberalization because of NAFTA is very small, even prior to NAFTA we had low tariffs on Mexican goods and services anyway!  In other words – what people were complaining about in the first place was more or less already the situation.  If they didn’t complain about it before, and they didn’t, then it doesn’t make sense for them to complain about it now!   So what DID NAFTA do?  NAFTA opened up Mexico to us not the other way around – they lowered their tariffs and non-trade-barriers.  Don’t get me, my father-in-law or professor Saggi wrong, Mexico STILL has some barriers, but it is much better than before.  

Ok so what is next – AHA – Jobs!  I asked.  The next part is straight from Professor Saggi again:

Jobs – big thing on jobs is that you want to maximize the size of the economy, maximize GDP.  The bigger the GDP is the more jobs that will lead too.  Let’s say only Wall Street gets rich, they will spend it on stuff they want and that will lead to jobs for other people.  It doesn’t have to be, or in most cases it won’t be, that all jobs have to expand evenly, for some industries increase, the good/competitive industries, and bad/not-competitive industries shrink like in textile, or steel, etc.  But the fact is that industries that do gain, gain a lot more than the industries that lose.  In other words there is a positive sum gain, or a net gain.  We will gain other jobs, so the question is how many jobs are we gaining or losing.  On net, or overall, from the evidence it’s a wash, BUT we create higher paying jobs than we lose (we typically lose low paying jobs) so we are getting richer.  It doesn’t mean no one will lose, but policy wise it should be that what is in the national interest (highest GDP possible) be implemented and not in the individual interest which may or may not coincide with the national.  BTW guys GDP also means National Income – the two are one in the same.

I then asked Professor Saggi what to do with the people who lose their jobs to trade and about the time and resources it takes for them to reenter the work place.  Here is what he said:

Time resources etc… Say for example an ex steel worker loses his job – can this guy who lost his job in the steel industry work in another sector like air craft manufacturing?   No he can’t just go there and work, he needs retraining and/or assistance… we do know that these people have a difficult time doing this.  Why?  Here are some reasons: US job loses occurs in low skill and educational job level, trade destroys more of the bad jobs than good jobs in US.  That guy is still hurting though (he doesn’t think his job is bad it is his livelihood) – we don’t have very expensive readjustment programs or assistance programs in place, we have trade adjustment assistance programs to help these kinds of workers who lose jobs, but evidence says it doesn’t work very well for a very good reason: the majority of workers who lose jobs choose not to go through the program because 80-85% find new jobs anyway without them.  [That is right - the vast majority of these people find new jobs without gov’t trade adjustment assistance!]  Can the gov’t do more?  In principle yes, but in all practicality no – if you are in your 20s and lose job yes you can retrain – but if you are 55 is it rational to invest in training?  Nope, or at least probably not.  Probably more should be done, but the gov’t has not been able to figure out an efficient system. 

Professor Saggi then moved on to a topic I had not thought of relating to this – it is pretty interesting:

The issue is philosophical – why is it special that you lose a job to trade?  If a company shuts down in the US 9/10 times it is because of competition in domestic market [US].  Ethically it is not clear why the trade job losers should be treated differently, [Professor Saggi] doesn’t see a difference morally or philosophically.  There is general unemployed insurance in place for that already.  People argue that that is enough, because of this idea that there is no difference.

That concludes our interview:  For continued reading Professor Saggi recommends a book by Douglas Irwin – Free Trade Under Fire.

I would like to extend a warm thank you from me, my family, and this site’s readers to Professor Kamal Saggi for his wonderful interview.  You didn’t have to and we know you are very busy.  We very much appreciate you taking the time to do this.
I would also like to extend a warm thank you to my Professor Rupinder Saggi for perhaps helping me get this interview.  She recommended I ask her husband about the topic, and she might have pulled a few strings for me in getting the interview.  Even if she didn’t this little piece still would not have happened if not for her.
Thank you both very much.