Has anyone noticed that, despite the rhetoric from members of both political parties, the Federal deficit is shrinking?
For instance, in last week's Republican Presidential 'debate,' Congressman Ron Paul incorrectly stated that the deficit was increasing to horrific levels. Typical hand-wringing stuff.
In reality, though, the Wall Street Journal reported this week that for fiscal 2007, the Federal deficit had declined to $162.8B, from $248B in 2006. This was a 34% reduction in the annual deficit.
Ever the party of economic lies, North Dakota Democratic Senator Kent Conrad said,
"As we approach the end of President Bush's term in office, he is desperately trying to remake his image as a fiscal conservative. But it's too little, too late. He will go down in history as the most fiscally irresponsible president ever."
Wow. That's big. But, wait. Wasn't that special 'most fiscally irresponsible' title reserved for the Gipper two decades ago? Didn't Tip O'Neill used to bellyache about Reagan borrowing 'a trillion dollars and throwing a party?'
If that's all he, and our current President, had done, how did our economy continue to grow with such low inflation?
The truth, inconvenient as it may be, is that, despite fighting a war, President Bush has managed to bring down the deficit in three straight years.
Yes, there's that Nobel-class phrase- an inconvenient truth.
Personally, I think it's more a President vs. Congress thing, rather than just a party difference now. The recent Republican-dominated Congresses demonstrated their weakness for spending every buck the Federal government could tax into its coffers.
I honestly think it's a few, rare Presidents that can manage to keep their perspective, spending where necessary, without succumbing to every big-ticket liberal program that crosses their desk.
Even if President Bush should have vetoed more extravagant spending earlier in his administration, that does not alter the fact that he still has presided over three years of achievements- declining annual deficits- that Congress refuses to acknowledge.
Monday, October 15, 2007
Sunday, October 14, 2007
Economic Visions: Conservatives vs. Liberals
You can write a lot about the differences on economic topics between American political conservatives and liberals.
However, in my opinion, there is one truly fundamental difference. I described it last week in this post on my companion business blog. In part, I wrote,
"I think this, frankly, is the central economic issue of the day.Government does not plan the economy. We don't, by and large, run a socialist or fascist economic system in America.
Instead, the idea is that government sets certain conditions of law, safety, taxation, etc., then lets individuals, either solely or collectively, decide how to operate within those parameters to pursue their dreams and achieve economic prosperity."
Conservatives understand that government sets up conditions for people to pursue their individual economic well-being and amass wealth. How that's done is up to the person, or groups of self-organized persons. Therefore, what government attempts to provide is opportunity, not work or jobs, per se. And certainly not the same job, in the same place, in perpetuity.
American political liberals, including most Democrats, and certainly the more extreme ones on both coasts, seem to play on economic misfortune, assuring the poor that by taxing the rich, the liberals will help the poor with some of that transferred wealth. The implication being,
'You are too poor and inept to help yourself. Just keep voting for us, and the subsidies will continue to flow.....'
When they aren't busy taxing the 'rich' to fund welfare payments to the 'poor,' these Democrats are trying to codify industrial policy, via, for example, legislated universal health care, mandated insurance policy coverages, various tariffs and subsidies. All of which serve to frustrate and distort the market pricing of goods, services, and, often, their inputs.
If these confounding legislative activities ceased, and market prices drove business activity, then people would be more easily able to understand and follow the flow of business activity to where it most profitably will occur.
The specific products produced on US shores may change, but it's always going to be in the interest of savvy entrepreneurs to use educated, productive Americans to provide goods or services at competitive prices, or on competitive service terms. In fact, it's not the dollar volume of American manufacturing production that has decreased over the past decades- it's just the number of jobs.
We've gotten more productive, and that's a good thing. The Democrats would insist that each old, less productive worker be retained and paid as before, no matter that there were more productive alternatives elsewhere.
We cannot manage an economy by attempting to control and price inputs. That simply drives business people away, to more flexible locations.
Instead, government needs to simply set consistent conditions for the conduct of business activity, then let those who risk capital figure out what will make them money.
Jack Welch actually managed to articulate a clear, succinct explanation of this last week in an interview on CNBC. When asked his opinion of Hillary's programs and candidacy, he shot back something like,
'I don't think her programs (to nationalize health care and insurance) will work. When have you ever seen government do something better than the private sector can do it?'
American has historically succeeded economically because of its flexibility and hospitality to new ideas. That's why immigrants come here to make a better life. And most do. Hispanic, Southeast Asian, Korean, Chinese. Before them, Germans, Scots, Irish, Poles, and Italians.
In the long run, I really don't think the liberal economic message, most recently articulated by Hillary, will sell. People like to believe they can escape poverty, provide better opportunities for their children, and earn a share of the American Dream
Candidates like Edwards, Obama and Hillary try to tell Americans that they are failing, hopeless, and bound for poverty. The truth is that our country's political economic fabric has done the opposite- it's provided the opportunity for literally millions of immigrants and citizens to move themselves from poverty to economic self-sufficiency, by participating in the globe's most dynamic, attractive economic zone.
As Roger Ailes noted in an interview with the Wall Street Journal, about which I wrote in this post,
"If you watch some news -- I always say to my people, when I see something particularly horrible about America that I think is a little out of proportion to what is actually going on, I call up the desk and say, "Do you have any pictures of people lined up at the border trying to get out?" They say, "What do you mean?" I say, "I just watched that and hell, we've got to get out of here, America's a terrible place. We need to get out fast. There must be guys stacked up at the airport trying to get out of here." No. It turns out everybody's trying to get in, and nobody's trying to get out. We've got to keep that perspective in mind when you cover the news. It doesn't mean you don't cover the bad news about America. You do. It means you don't get up in the morning hating your country. And so, until somebody shows me lines at the border trying to get out, I think there's some good news."
And that, dear readers, is how you know that Hillary, Obama, Edwards, Pelosi, and Harry Reid have the wrong idea about America, business and economic development. People are not lining up at our borders to leave, because economic conditions are so bad.
Instead, one of the biggest recent Congressional tussles has been how to set an immigration policy to deal with the rush of illegal entrants to our country, all trying to create their own version of the American Dream.
Really, it's a good, "high class" problem to have. So long as we continue to have a government that only sets economic conditions, rather than legislates business operations, this will continue to be true.
However, in my opinion, there is one truly fundamental difference. I described it last week in this post on my companion business blog. In part, I wrote,
"I think this, frankly, is the central economic issue of the day.Government does not plan the economy. We don't, by and large, run a socialist or fascist economic system in America.
Instead, the idea is that government sets certain conditions of law, safety, taxation, etc., then lets individuals, either solely or collectively, decide how to operate within those parameters to pursue their dreams and achieve economic prosperity."
Conservatives understand that government sets up conditions for people to pursue their individual economic well-being and amass wealth. How that's done is up to the person, or groups of self-organized persons. Therefore, what government attempts to provide is opportunity, not work or jobs, per se. And certainly not the same job, in the same place, in perpetuity.
American political liberals, including most Democrats, and certainly the more extreme ones on both coasts, seem to play on economic misfortune, assuring the poor that by taxing the rich, the liberals will help the poor with some of that transferred wealth. The implication being,
'You are too poor and inept to help yourself. Just keep voting for us, and the subsidies will continue to flow.....'
When they aren't busy taxing the 'rich' to fund welfare payments to the 'poor,' these Democrats are trying to codify industrial policy, via, for example, legislated universal health care, mandated insurance policy coverages, various tariffs and subsidies. All of which serve to frustrate and distort the market pricing of goods, services, and, often, their inputs.
If these confounding legislative activities ceased, and market prices drove business activity, then people would be more easily able to understand and follow the flow of business activity to where it most profitably will occur.
The specific products produced on US shores may change, but it's always going to be in the interest of savvy entrepreneurs to use educated, productive Americans to provide goods or services at competitive prices, or on competitive service terms. In fact, it's not the dollar volume of American manufacturing production that has decreased over the past decades- it's just the number of jobs.
We've gotten more productive, and that's a good thing. The Democrats would insist that each old, less productive worker be retained and paid as before, no matter that there were more productive alternatives elsewhere.
We cannot manage an economy by attempting to control and price inputs. That simply drives business people away, to more flexible locations.
Instead, government needs to simply set consistent conditions for the conduct of business activity, then let those who risk capital figure out what will make them money.
Jack Welch actually managed to articulate a clear, succinct explanation of this last week in an interview on CNBC. When asked his opinion of Hillary's programs and candidacy, he shot back something like,
'I don't think her programs (to nationalize health care and insurance) will work. When have you ever seen government do something better than the private sector can do it?'
American has historically succeeded economically because of its flexibility and hospitality to new ideas. That's why immigrants come here to make a better life. And most do. Hispanic, Southeast Asian, Korean, Chinese. Before them, Germans, Scots, Irish, Poles, and Italians.
In the long run, I really don't think the liberal economic message, most recently articulated by Hillary, will sell. People like to believe they can escape poverty, provide better opportunities for their children, and earn a share of the American Dream
Candidates like Edwards, Obama and Hillary try to tell Americans that they are failing, hopeless, and bound for poverty. The truth is that our country's political economic fabric has done the opposite- it's provided the opportunity for literally millions of immigrants and citizens to move themselves from poverty to economic self-sufficiency, by participating in the globe's most dynamic, attractive economic zone.
As Roger Ailes noted in an interview with the Wall Street Journal, about which I wrote in this post,
"If you watch some news -- I always say to my people, when I see something particularly horrible about America that I think is a little out of proportion to what is actually going on, I call up the desk and say, "Do you have any pictures of people lined up at the border trying to get out?" They say, "What do you mean?" I say, "I just watched that and hell, we've got to get out of here, America's a terrible place. We need to get out fast. There must be guys stacked up at the airport trying to get out of here." No. It turns out everybody's trying to get in, and nobody's trying to get out. We've got to keep that perspective in mind when you cover the news. It doesn't mean you don't cover the bad news about America. You do. It means you don't get up in the morning hating your country. And so, until somebody shows me lines at the border trying to get out, I think there's some good news."
And that, dear readers, is how you know that Hillary, Obama, Edwards, Pelosi, and Harry Reid have the wrong idea about America, business and economic development. People are not lining up at our borders to leave, because economic conditions are so bad.
Instead, one of the biggest recent Congressional tussles has been how to set an immigration policy to deal with the rush of illegal entrants to our country, all trying to create their own version of the American Dream.
Really, it's a good, "high class" problem to have. So long as we continue to have a government that only sets economic conditions, rather than legislates business operations, this will continue to be true.
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