Bernie Sanders on Economics, Trade and Protectionism

Yesterday, Larry Kudlow hosted an exchange between Vermont Socialist Senator Bernie Sanders and George Mason University Professor of Economics, Walter Williams.

To say that Sanders embarrassed himself by his ignorance and lack of awareness of modern economics and global realities is an understatement. Professor Williams easily made a fool of Sanders.

At one point, the Senator actually alleged that virtually all Chinese-made goods are inferior and dangerous to allow in the country, arguing, instead, that these should be made in the US. When Williams informed Sanders that he, Williams, had just purchased a Japanese-made car, Sanders expressed surprise and congratulated the Professor on finding an alternative source.

But, basically, Sanders' paean was the typical, tired leftist and socialist bromide that if only American companies would manufacture more goods onshore, we'd all be better off. Or at least Sanders' constituents would be.

Confronted with the realities of rising American manufacturing output over the past decades, with rising productivity, requiring fewer workers, Sanders missed the point. He railed at the lost jobs, rather than understanding the resulting rise in living standards brought about by this increase in productivity.

Despite Professor Williams' and Larry Kudlow's best efforts, Sanders remained resolute in his ignorance and stupidity.

What I realized, upon reflection, is not just that this Senator is, sadly, a representative of the Democratic majority in our upper chamber, with all his attendant misunderstanding of the operation of free market economics.

No, what really frightens me is that Sanders fails to distinguish between government which sets conditions, rules, and lets people create their own lives, wealth, and jobs, and government that legislates what will be made, by whom, where, and at what price.

Of course, that latter description tends toward either socialism or fascism.

By insisting that his voters must have jobs, and all US trade policy must directly ensure this, Sanders demonstrates his break with the country's actual past.

Our forefathers, who settled the Eastern seaboard, then pushed inland, were in pursuit of territory and resources with which they could fashion their own lives. They had no support network from the government. Nobody provided them with unemployment insurance, healthcare, or guaranteed jobs and wages.

Immigrants, of course, are an even more profound example of risk-taking citizens.

Now, we have Senators such as Sanders attempting to mandate industrial and trade policies to force companies to employ their voters.

They miss the fundamental fact of our free market system. Business and jobs go where necessary resources are. If Vermont workers are suitably educated and priced, and other aspects of Vermont are conducive to investment, then business will thrive there.

If not, in time, Vermonters, like their fore bearers, will pick up and move where there are jobs. Economic mobility is a key feature of our successful economic system. Our immigrant history adds to this expectation.

What Sanders and his ilk fail to realize is that our population, like our economy, is mobile and accepting of risk.

Does anyone seriously believe Bernie Sanders and 99 others like him can plan our economy better than tens of thousands of risk-taking business owners and millions of risk-taking workers? When did we come to expect certainty, either in business success, or employment?

It troubles me greatly that the perspectives, ignorance and values of Bernie Sanders, socialist, may well influence the evolution of our free market economic system in years to come, without a return to the majority of conservatives in the Congress.

Democratic Presidential Candidates Change Their Tune on Iraq

Did anyone else catch the Democratic hopefuls' mass change of tune on Iraq at their last Bush-bash...er.....debate?

I saw some clips of their responses on O'Reilly last week, and my jaw almost dropped.

All three Oval Office wannabes- Hillary, Obama and Edwards, when pressed, declined to promise that troops would be out of Iraq by the end of 2009.

Funny, that. Haven't they all assailed Bush constantly for keeping troops there?

Yes, when given the clear, explicit opportunity to put their money and promises where their mouths are, each one, individually, cited unforeseen circumstances and developments which might hinder their ability to implement the total withdrawal they've been pressing our sitting President to conduct.

Cynical, or just newly-cautious? I'd guess some of both, really.

All three Dems are becoming wary of the sound bite that will, well, bite her/him in the ass, come the general election campaign. None of them want to promise total withdrawal, only to have conditions change in mid-campaign, or seem too soft on terrorism.

If they are caving on such a knife's edge issue this early, what else will they waffle on in the coming months?

And what punishment will moveon.org extract from them for their transgressions?

Bill Clinton's Continuing Scandals

Last Wednesday's Wall Street Journal featured a fascinating article describing how scandal and smarmy behavior continue to dog former President Bill Clinton.

The story involves Clinton's new right-hand man, Douglas Band, and a wannabe Italian power broker named Raffaello Follieri. It's the sort of thing that comes right out of the old nighttime television soap opera, Dallas.

Essentially, Band, who had climbed up the Clinton staff ladder to become a trusted advisor, befriended Follieri, who was on the make for important American financial and social connections.

Meanwhile, Clinton had taken a lucrative position as a partner in Yucaipa Companies, a California-based investment firm. Since he left office, Clinton has allegedly turned his and his wife's sizable personal debts into a small fortune, thanks to earning $40MM in speaking fees.

Nevertheless, Clinton turned to his partners a Yucaipa to compensate his new key man, Mr. Band, so that the latter would not take offers to return to the business world. Arrangements were made for Yucaipa to direct various payments to Band in exchange for continuing to remain as Clinton's key staffer.

Such proximity to the former President helped Band in other ways, as well. Mr. Follieri used his growing friendship with Mr. Band to secure financing from a partnership formed by Yucaipa, via Bill Clinton, to help him buy Catholic Church properties and redevelop them for commercial uses.

The Yucaipa partnership, via Ron Burkle, one of its partners, invested $100MM with Mr. Follieri's venture. Another Clinton pal, Mr. Michael Cooper, advanced more money to Follieri, allegedly causing the latter to pay Mr. Band $400,000 for his efforts in making this connection bear fruit.

It seems, though, that Mr. Follieri focused more energy and money on his offices, than on actually executing the business plan which attracted the Yucaipa funding. Somewhat cynically, Follieri had promised that the US Catholic Church, in order to pay its mounting legal bills and settlements for various transgressions by its priests, would be selling real estate to raise that cash. Follieri presented himself as having key relationships which would give him an inside track to buying and developing these properties.

However, first, Follieri secured expensive offices on Fifth Avenue in New York, as well as a penthouse space in the same building. Shortly thereafter, he moved into the penthouse. Other lavish expenses triggered a lawsuit by Mr. Burkle for misappropriation of funds from Yucaipa.

Meanwhile, Follieri used his contacts, via Mr. Band, to try to establish business ties with former Brazilian President Cardozo, as well as Mexican tycoon Carlos Slim.

Back in the original US business foray, Follieri's group did manage to buy about $50MM worth of properties near Chicago and Philadelphia. However, the pace of the purchases, and interactions with Messrs. Cooper and Burkle did not go well.

Overlaid on this, of course, is a muddle involving Follieri and Hillary Clinton's campaign. Follieri alleges that Hillary's campaign staff requested his help to woo Catholic voters, while the staffers counter that Follieri offered his help to them.

Either way, the entire mess seems to be par for the course for Slick Willy. Follieri approached him for entree to partners with more money for investments. In exchange for buying access via Clinton's key aide, Mr. Band, Follieri came away with more than $100MM from a partnership formed by Clinton's new business base. Then things fell apart, and Clinton's partners are suing the young Italian who had suddenly become part of Clinton's expanded circle of international contacts.

Pictures of Follieri and his significant other, actress Anne Hathaway, with the Clintons, are now explained with that familiar 'he gets his picture taken with lots of people whom he really doesn't know' line.

Somehow, you get the feeling that Clinton and his minions did a lot less sniffing around Follieri's past dealings than the Journal's reporters did. They carefully avoid libel, but leave the distinct impression that Follieri is an Italian on the make in the US, puffing up his prior business accomplishments, and running a very agreeable-sounding sort of con game to shake tens of millions of investment capital from gullible American financiers.

Some things don't seem to change. I saw Maria Bartiromo of CNBC interviewing Clinton last week, I suppose in connection with his big 'Clinton Global Initiative' meeting in New York. Why she, or her network, thinks Bill Clinton has the experience or background to opine on any business matter, such as the recent mortgage market meltdown, is beyond me.

It seems that scandal, losses, and shady business dealings seem to cling to Bill Clinton even now, eight years after his rather scandalous departure from the White House.