Ryan Decker: Obama & Trade

Friend of the blog, Ryan Decker, has a good piece in the latest edition of the BYU Political Review.

In it, he highlights the hypocrisies of President Obama's foreign policy--more particularly, his pledges to change course from the supposedly unilateralist approach of President Bush and move towards a foreign policy that would make him (& presumably the US) the koolest kid on the planet.

during the presidential campaign, Obama’s foreign policy promises were inherently contradictory. On the one hand, he promised a less unilateralist and belligerent foreign policy, supposedly in opposition to Bush. On the other, he promised to renegotiate NAFTA and slow pending trade agreements, prompting public concern from U.S. trading partners. For anyone who understands that trade policy is foreign policy, these promises were clearly crises waiting to happen. Closely related to the campaign was Obama’s bestselling book, in which he admitted that labor unions had been crucial to his political career and therefore deserve special treatment from him (page 119).

The other item of context is Obama’s careful behavior at international forums for addressing the financial crisis. At the G-20 and other venues, Obama and his deputies urged countries to avoid damaging trade protectionism. The lessons of Smoot-Hawley were fresh in the minds of officials concerned that protectionism could spark a race to the bottom.

Given his campaign rhetoric and history with unions, there was always a chance Obama would be an anti-trade president. This concern has been magnified by his foot-dragging on the Colombian free trade agreement (and others), crucial to Washington’s relationship with the regionally besieged Latin American country, but angering to unions. Many had hoped, however, that Obama’s campaign rhetoric about careful foreign policy and his promises at the G-20 would prevent a U.S.-initiated, belligerent trade war.

Any countries that trusted Obama’s trade policies—and therefore foreign policies—have now been proven wrong.

Click the link to read it all; it's worth your time.

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The True Costs Of 'Protected' Trade... (UPDATED)

...Among other things--increased costs for consumers.

This WSJ op-ed by Don Nicolson is focused on the dairy market, but the larger point it makes about the ills of increased protectionism and the decline of free trade is particularly instructive, given the current climate. Subsidies negatively impact consumers everywhere.

In the U.S., DEIP [the dairy subsidy] means American families pay higher taxes to support subsidized dairy farmers, wiping out any savings they might enjoy from lower dairy prices. As in other countries, subsidies effectively shield farmers from true competition. Higher prices always result, and this price increase is passed straight onto consumers. There's nothing inherently "fair" about any form of subsidy.

Beware calls for trade protection. "Buy American," sounds good--who wouldn't want to "support" as it were, their fellow Americans over someone we don't know in some far off country? The reality is, it increases costs for consumers and hurts unrelated industries in the US whose goods are blocked in retaliatory trade protection moves in that far off country.

The Smoot-Hawley Tariff Act deepened the effects of the Great Depression--not only for Americans, but for people around the world. Reject the calls of the protectionists and remember that free trade benefits our exporting industries as well as keeping consumer costs low.

UPDATE 6:00pm BST: Dan K., Cambridge Econ PhD candidate writes:

Here's Robert Lawrence take on why American car manufacturers became embarrassingly uncompetitive: 40 years of Government protectionism

Although we call the big three automobile companies they have basically specialized in building trucks. This left them utterly unable to respond when high gas prices shifted the market towards hybrids and more fuel efficient cars.

One reason is that Americans like to drive SUVs, minivans and small trucks when gasoline costs $1.50 to $2.00 a gallon. But another is that the profit margins have been much higher on trucks and vans because the US protects its domestic market with a twenty-five percent tariff. By contrast, the import tariff on regular automobiles is just 2.5 percent and US duties from tariffs on all imported goods are just one percent of the overall value of merchandise imports. Since many of the inputs used to assemble trucks are not subject to tariffs anywhere near 25 percent -- US tariffs on all goods average only 3.5 percent -- the effective protection and subsidy equivalent of this policy has been huge.

It is no wonder much of the initial foray by Japanese transplants to the US involved setting up trucks assembly plants, no wonder that Automakers only put three doors on SUVs so they can qualify as vans and no wonder that Detroit is so opposed to the US-Korea Free Trade Agreement that would eventually allow trucks built in Korea Duty-Free access to the US market.

Here's the punch line:

If congress wants an explanation for why the big three have been so uncompetitive it should look first at the disguised largess it has been providing them with for years. It has taken a long time -- nearly 47 years -- but it seems that eventually the chickens have finally come home to roost.

47 years of government failure can't just be erased overnight. Sorry Detroit.

There is a certain irony in that US automakers lobbied for the protectionist policies that would ultimately have a large part in their total collapse.

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Barack Obama: No Fan Of Winston Churchill

The Brits said he could keep the Churchill bust for another 4 years (or 16, once he amended the Constitution), but President Obama said, "thanks, but no thanks."

Churchill was the subject of my masters thesis--specifically, his early wartime speeches and their reception. I've admired the man since I first became aware of WWII. He is one of the greatest wartime leaders in the history of the world. Historians who know better than me, say that without Churchill at the helm during a few key moments of the war, Hitler wins.

So, yeah, I think it's dumb that Obama is getting rid of the Churchill bust. Apparently British diplomats are worried it's about more than just a piece of art. According to the article, they are concerned about the state of the "special relationship."

The rejection of the bust has left some British officials nervously reading the runes to see how much influence the UK can wield with the new regime in Washington.

Historically, the Anglo-American relationship is without peer. To my knowledge, there has been no more successful alliance in the history of the world.

Before the election, I would have said that I thought Obama was smart enough to recognize the importance of this relationship. Of course, that's what I thought about economic issues and especially free trade. Given his willingness to bow to protectionist forces despite surrounding himself with free trade economists, I'm less willing to give him the "he's too smart to do something dumb like that" benefit of the doubt.

And speaking of those economists. Who would have thought they would so quickly abandon their principles and kowtow to the President's protectionist advisors? I guess that's a reminder for all of you who thought selection of an advisor with a given set of policy preferences/academic background does not = preferred policy for the administration.

Exhibit A? The Spendulous.

(h/t Uncle Jimbo @ Ace)


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Sweatshops Are Awesome

What's worse than working in a sweatshop? Try living in a dump.

Hip students who routinely protest Western "imperialism" in Iraq & elsewhere frequently campaign for economic imperialism.

Take, for instance, the protesters outside local low-cost retailer, Primark.

Like so many other liberal causes, their good intentions pave the path to even more suffering by the already-suffering.

Nicholas Kristof, NYT (see, I'm speaking their language), expounds on the manifold goodness of sweatshop jobs in places like Cambodia. There, people aspire to these positions and see them, rightly, as a way out of abject poverty.

Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.

Talk to these families in the dump, and a job in a sweatshop is a cherished dream, an escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their children.

“I’d love to get a job in a factory,” said Pim Srey Rath, a 19-year-old woman scavenging for plastic. “At least that work is in the shade. Here is where it’s hot.”

Another woman, Vath Sam Oeun, hopes her 10-year-old boy, scavenging beside her, grows up to get a factory job, partly because she has seen other children run over by garbage trucks. Her boy has never been to a doctor or a dentist, and last bathed when he was 2, so a sweatshop job by comparison would be far more pleasant and less dangerous.

Meanwhile, the self-congratulatory do-gooders protesting in London & elsewhere pressure policy makers to keep these jobs--which people choose to do--away from those who most need them.

Rather than telling other countries and people's what we think is in their best interest--like not working at a sweatshop--we ought to relax trade standards, making trade free-er and let them choose for themselves.

Remember, one 10-year-old boy's sweatshop is another 10-year-old boy's totally awesome way out of living in a friggin' dump.

(thanks to Scott L.)


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Oil: It's Not Black & White (UPDATED)

As a general rule, I look to the efficiency and amorality of the market to solve economic issues. I guess that makes me libertarian. However, my libertarian-ness has limits. I won't get into those here.

From that general rule, I find myself hesitant of any plan that seeks to manipulate the market to attain some desired, utopian end. One example of this would be "an end to oil dependency." You see, I used to just accept, like everyone else, that dependence on oil for our energy use was an unmitigated bad--the blackest of black.

(nor should this be interpreted as a call for laissez faire, whatever)

My opinion is shifting. Like any other traded good, and especially one so vital to the operation of a country, I think oil forces the United States to make compromises and care about parts of the world which would otherwise receive no attention. And I don't buy the "blood for oil" arguments of the most ardent anti-Bush people. Sorry, folks, President Bush doesn't/didn't just take his marching orders from Exxon & Haliburton.

And I'm worried about the unintended consequences of "going green" or even of imposing some sort of pigovian tax. Sure, I'm sympathetic to a plan that trades cuts in income taxes for a carbon tax, but I'm worried that under such a scenario, the poor will pay--and not just the poor of this country. I'm reminded of the failure of the massive ethanol subsidy which contributed to worldwide food shortages and famine.

I bring all of this up because of an article in the Wall Street Journal which argues, essentially, that oil dependency and the moderation in foreign policy it forces is good. It's a persuasive essay written by someone, Roger Howard, who has done his homework.

While there are, of course, circumstances in which oil can exacerbate tensions and be a source of conflict, it can also act as a peacemaker and source of stability. So to identify America's "foreign oil dependency" as a source of vulnerability and weakness is just too neat and easy.

It's at least worth considering because, like so many other things, the question of oil is not black & white.

12 December 12:50am BST: RD at Pendulum Politics responds.


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Bi-Lateral Free Trade Agreement Follow-Up

I don't think there's any doubt that Rahm Emmanuel aka "Ari Gold" is a partisan Democrat--he just happens to be one of the few partisan Democrats willing to buck the influence of unions and promote free trade. That doesn't give him a pass, but it does give him the benefit of the doubt on an issue that is a big deal to me: Free Trade.

A bunch of you emailed me in response to Dan K.'s comments and I appreciate the emails. They've been very illuminating. I'll post a couple of them below but can't post everything you've collectively sent. Don't be mad if yours doesn't get posted, it's because many of you wrote very similar comments.

Ryan D.*

I liked Dan K's comment about FTAs and how they can undermine global efforts.

A note should be made, however: many realists argue that FTAs are better for America because in bilateral agreements, the big country can push the little country for better terms. In other words, lately a lot of big countries have been seeking bilateral or small regional agreements simply because they can get favorable terms.

So to true economic liberals, as Dan K appears to be, FTAs are often perceived as a problem. But for foreign policy realists, FTAs may make more sense.

And Branden B.

Dan is right on bi-lateral FTA's. That may seem obvious given his credentials, but we both know that there are a lot of nuts out there with great credentials. I forget how all the math works, but I remember solving the bi-lateral fta models in Econ 257 and being surprised. His position is absolutely correct. Strong support for all-inclusive trade agreements (Doha, WTO) and opposition to bi-laterals. The bi-laterals might have a few political benefits so they are not altogether detestable, but for a free trader like yourself they are not what you are looking for.

I have just a couple of points to make in response. I don't necessarily disagree, I just think there may be more things to add to the equation.

In the case of the United States, the ag lobby is powerful (I know firsthand) and has been effective at maintaining the various price supports in place. This lobby probably explains, in part, some of the difficulties the US has had at the WTO generally and with Doha in particular.

However, according to my reading of the various Doha reports, the US seemed fairly reasonable willing to compromise. Lacking movement there, it's understandable that they would move to bi-lateral agreements where, as Branden B. and Ryan D. noted above, they could effectively out negotiate the little guy.

To the extent that these types of agreements hinder accomplishing a comprehensive FTA that moves us closer to global efficiency, that's a problem, obviously. But, as both Ryan D. and Branden B. and even Dan K. noted, there are 'political benefits' to be had from these bi-lateral agreements.

In the case of Colombia, there are economic benefits in the tens of billions of dollars in increased, free flowing trade. And we ought not dismiss the strategic benefits of bolstering our relationship with a key ally--especially when that ally is on the frontline of the fight against the drug trade and a help in countering an increasingly belligerent Chavez-ruled Venezuela.

On South Korea, I'm not quite as clear on the details. But Dan K. has spent a number of years examining the many factors at play there, so I'll gladly defer to him. I think it's fair to say that the argument could be made for bolstering a key ally in that region as well--especially if an agreement with South Korea is just a precursor to a multi-lateral Pacific Rim FTA I've heard about.

All of this brings me back to Nafta. Where does that, tri-lateral, agreement fit into the overall discussion of free trade. Everything I've read suggests that it is an unmitigated success. Has it, too, been damaging to efforts to adopt a world-wide FTA? I don't know.

Clearly, political reality plays a role in every one of these scenarios. I've said many times that if I had ultimate power, one of the first things I would do would be to eliminate barriers to trade worldwide--that I think it is the single act that could to the most good for the most people.

But I'm also not so naive that I would make the perfect enemy of the good. That may be what we're looking at with these bi-lateral FTAs, but I don't know. I'm open to persuasion on this point.

Let's bring this home, again: Dan K. chided me about Obama's anti-Nafta primary rhetoric. I hope he's right. I hope it was just that--rhetoric--and not a commitment to actually seek an massive re-write of the agreement. He has, as Dan K. & Ryan D. have said, surrounded himself with people who support free trade. But as both of you know, that's no guarantee.

Indeed, Democrats willingness (and narrow defeat in this Congress) to pass "card check" legislation, effectively destroying secret ballot unionization, signals a disturbing amount of willingness to bend to the demands of their union supporters. No less a leftist than George McGovern (George McGovern!) opposed this legislation.

Let me put it this way: If Obama is willing to go along with that type of legislation, I don't think free trade is the sacred cow many of you believe. Even if he does, initially, protect Nafta and support free trade, resurgent unions in the US, as a result of this new legislation, would have even more clout than they do today and could exert significant pressure on The One.

It might take one of his much hoped for miracles to resist them.


*Ryan D. blogs at Pendulum Politics.


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More On Rahm Emmanuel & Free Trade

Longtime friend, Dan K., an econ PhD student at Cambridge, provided a very instructive response to my earlier post about the prospects of free trade under an Obama administration.

Just a few things regarding your concerns about free trade.

1. Clinton promised to renegotiate NAFTA to include strong labor and environmental measures. And he did, which took an extra year to get to congress. In reality, those measures deliberately had zero enforcement power. The Clinton negotiators wanted it that way. And the Mexican and Canadian negotiators laughed at the lack of enforcement power, particularly with labor. The book "How the Deal was Done" by Cameron and Tomlin documents this well. The lesson seems to be that while the democrats signal an awareness of labor and environmental concerns with trade agreements, it's not really a credible threat. It's largely because all of that involves the creation and enforcement of international labor and environmental laws which are close to impossible to create and enforce. They do pander to labor unions. But that's because they can't get elected without them. But the end result is the same. So if empty rhetoric and promises are what it takes to calm down the labor groups, then so be it. We now have one President who is exceptionally good at it. I think Obama knows that playbook.

2. No trade economist (that I know of) think it is possible that Obama would unilaterally renegotiate NAFTA. Why? Because it sets a dangerous precedent of unilateral renegotiation on regional and multilateral FTA's for other countries who feel 'cheated' by such agreements. As you know, while the overall benefits of free trade is positive, there are bound to be losers within a domestic setting. Unskilled labor is the loser of NAFTA (economical jargon: less abundant production factor). Every free trade agreement has losers, thus domestic pressure for reform. The precednet for Unilateral negotiation means that many free trade agreements could unravel, to say nothing of the WTO. So, unilateral renegotiations of NAFTA is not an option for Obama, and he knows that. (Let it go Jake. He did what he had to beat Hilary, which I don't mind at all.) He may not be a complete free trader, but he also does not want the blame of dismantling the world free trade network.

3. Have a look at the current tarriff rates of the United States. Almost every product is close to zero (large exception being agriculture). There are not that much more trade benefits to be had with more FTA's. The South Korean FTA is more of a gesture to strengthen political ties anyway. The only (real) thing left now is to promote global efficiency by concentrating on the WTO. There's significant evidence to suggest that bilateral FTA's hurt that goal. By definition, FTA's create preferential treatment. This diverts trade from efficient to inefficient producers (equals dead weight losses). So, if you really want to be a free trader, argue about granting fast-track authority to the Obama administration and pushing through the Doha round. Because the other FTA's are not going to create much benefit (in fact it may create losses in the long run). I say this because you can be a free trader (like myself) and oppose the Columbia and South Korean FTA's (provided for a strong support for WTO). The WTO is the battle ground where the big boys (Brazil India China Russia and EU) play their economic games. I don't mind the least bit if Obama scores some political capital by opposing regional and bilateral FTA's and gets the job done at the WTO.

Dan blogs at From One Cambridge To Another.
(better start blogging again, Dan)


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Obama Selects Ari Gold As White House COS

He's name had been floated for awhile, but yesterday it became official as President elect Barack Obama selected Rahm Emmanuel as his chief-of-staff. Reader Morgan H. weighs in:

Looks like Obama picked Ari Emmanuel's brother to be his Chief of Staff. In case you didn't know, Ari Emmanuel is the founder of Endeavor, a well known agency here in LA. Ari Emmanuel reps Marky Mark among others Ari/Endeavor is who and what Ari Gold and his agency on Entourage is/are rumored to be based on. I can't imagine what Yom Kippur gatherings must be like in that family. Especially if they play a "friendly" game of Monopoly or Acqui[re].

Now, imagine Ari Gold running the White House. Good times.

Honestly though, according to a bio of the Emmanuel brothers from the NYT that my brother, Matt L., dug up, Rahm comes across as a pragmatic centrist. His signature piece of policy whatever was helping push through Nafta.

As a free-tradist, this bit-o-news is encouraging. However, and conversely speaking, if he is more pragmatist than centrist (they are not the same thing), he may be ideally suited to unilaterally re-negotatiating Nafta per Obama's twice stated campaign promise.

It doesn't help that Democrats in Congress have experienced a bit of a 'back-to-the-future' of their own and have opposed free trade agreements with Colombia & South Korea. Additionally, their desire to eliminate unionizing by secret ballot indicates an altogether higher level of pandering to their Union donors--the likes of which hasn't been seen around DC since unions actually mattered. You know, back in like 1980something.

This is one of my Big Problems with the Democrat Party--their complete ignorance of the economic gains to be had from free trade. Alternatively, maybe they're not ignorant about the gains to be had an are just flat out selling their principles to the unions. Clearly, the latter optino is worse. I'll give them the benefit of the doubt and assume they just don't know any better.

I do not buy the "better labor & environmental regulations" argument as their reasoning for opposing free trade. I think it's a smoke screen of a type with the anti-genetically modified foods posture taken by the Europeans. They're both crap reasons.

Let's bring this back to where we started: I hope Obama's choice of Rahm Emmanuel signals two things: Love for free trade and a pro-Israel foreign policy stance.


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"Free-Market Capitalism Will Save Us"

Not in the religious sense.

Steve Forbes's latest column on the causes of the credit crises and its historical ramifications is enlightening. Though I don't agree with everything he says, his characterization of the Great Depression and the lessons to be learned from past mistakes feels right. I particularly like this pasasge:

The Depression was actually triggered by the Smoot-Hawley Tariff of 1929--30, which imposed massive taxes on countless imports. Other countries retaliated in kind. The global trading system collapsed. International capital flows dried up. The legislative history of Smoot-Hawley is instructive. When it first surfaced in Congress during the fall of 1929, the stock market cratered. When near the end of 1929 it appeared that Smoot-Hawley was being sidetracked, stocks rallied, ending the year almost where they had begun. But then in early 1930 Smoot-Hawley resurfaced, and stocks resumed their slide, which continued after Smoot-Hawley was signed into law that June. A devastating global contraction ensued.

Compounding that error was the U.S.' giant tax increase in 1932. President Herbert Hoover thought a balanced budget would restore confidence. The top income tax rate was raised from 25% to 63%. Hoover even legislated an excise tax on checks--you had to pay Uncle Sam a fee every time you wrote a check. Not surprisingly, strapped consumers withdrew massive amounts of cash from banks in order to conduct their business, which put even more stress on troubled banks. This check tax was one of the factors leading to the bank closures of 1933. The huge tax increase deepened the U.S. economic slump.

If not for the Depression, Hitler would never have come to power--the Nazis had carried only 2% of the vote in 1928.

It's impossible to separate the political from the economic. Protectionism and isolationism have already begun to rear their ugly heads--Obama's posturing on Nafta and other free trade agreements is just one example.

And, lest you think it's nothing more than airy campaign talk, bear in mind that trade unions are some of his biggest financial contributors and supporters. They would like nothing more than to kill Nafta and impose protectionist measures all in the name of, as Forbes puts it, "better" labor and environmental rules. This is entirely disingenuous.

Rather, expanding free-trade--revisiting Doha and continuing to pursue bi- and multi-lateral free trade agreements (Colombia, South Korea, Pacific Rim)--is the answer.

"Free-market capitalism will save us, if we let it."

(h/t Matt B.)


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Economists For McCain

There's lots of 'em. I wish I had more time to opine and generally fill in with some commentary and observations, but I don't. Be sure to read through both the statements for John McCain and against Barack Obama's (Guitar Hero*) economic plan.

Here's an excerpt from the official McCain press release:

ARLINGTON, VA -- Today, McCain-Palin 2008 released the following statement signed by 100 distinguished and experienced economists at major American universities and research organizations, including five Nobel Prize winners Gary Becker, James Buchanan, Robert Mundell, Edward Prescott, and Vernon Smith. The economists explain why Barack Obama's proposals, including "misguided tax hikes," would "decrease the number of jobs in America." The prospects of such tax rate increases under Barack Obama are already harming the economy. The economists conclude that "Barack Obama's economic proposals are wrong for the American economy." The proposals "defy both economic reason and economic experience."

From the statement in favor of McCain's economic plan:

We enthusiastically support John McCain's economic plan. It is a comprehensive, pro-growth, reform agenda. The reform focuses on the real economic problems Americans face today and will face in the future. And it builds on the core economic principles that have made America great.

And finally, from the statement opposing Obama's plan:

Barack Obama argues that his proposals to raise tax rates and halt international trade agreements would benefit the American economy. They would do nothing of the sort. Economic analysis and historical experience show that they would do the opposite. They would reduce economic growth and decrease the number of jobs in America. Moreover, with the credit crunch, the housing slump, and high energy prices weakening the U.S. economy, his proposals run a high risk of throwing the economy into a deep recession. It was exactly such misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s, that greatly increased the severity of the Great Depression.

We are very concerned with Barack Obama's opposition to trade agreements such as the pending one with Colombia, the new one with Central America, or the established one with Canada and Mexico. Exports from the United States to other countries create jobs for Americans. Imports make goods available to Americans at lower prices and are a particular benefit to families and individuals with low incomes. International trade is also a powerful source of strength in a weak economy. In the second quarter of this year, for example, increased international trade did far more to stimulate the U.S. economy than the federal government's "stimulus" package.

Ironically, rather than supporting international trade, Barack Obama is now proposing yet another so-called stimulus package, which would do very little to grow the economy. And his proposal to finance the package with higher taxes on oil would raise oil prices directly and by reducing exploration and production.

Briefly on Obama's opposition to free trade. Whatever you think about his primary rhetoric, he has done nothing to push through the aforementioned trade agreement with Colombia or one with South Korea.

I am a free trader. If asked for my solution to the current economic crisis, beyond what's already been done (some good, a lot bad), I would push through the current negotiated agreements with Colombia and South Korea and try and complete the Pacific Rim agreement currently under negotiation. Additionally, I would cut capital gains taxes.

Obama's opposition to free trade is a deal breaker for me. Another one. In addition to all the other ones.

*Over-the-top performance, no real skill or experience.


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John McCain Is A Free Trader

Courtesy, Mary Kissel, WSJ Political Diary:

HONG KONG -- One of the two guys now running in the U.S. will be president, so the rest of the world is hungry for signs about what the election means for them. Quietly, the McCain campaign has set out an Asia policy that's worth paying attention to.

In an op-ed piece for The Australian newspaper last week, Mr. McCain put heavy emphasis on building traditional alliances with Asian democracies. The 100-year-old U.S.-Australian alliance "sets the standard," he says. Mr. McCain also laid down a strong call for "American leadership" on trade, noting that free trade agreements with Australia and Singapore "are critical building blocks for an open and inclusive economic order in the Asia-Pacific region." In a statement voters back home might like to hear, he added: "America has never won respect or created jobs by hiding behind protectionist walls and I will continue making the case for free trade, regardless of political expediency."

Right-thinking Australians loved the op-ed. The Lowy Institute's Andrew Shearer lauded Mr. McCain's "deeply personal engagement in the alliance and our shared history," and recalled that Mr. McCain's grandfather and father had served "side by side with the Royal Australian Navy" in the Pacific during World War II.

Mr. McCain is the only presidential candidate so far who has put forth a coherent foreign policy vision for engagement with Asia, one of the world's most volatile regions. His strong endorsement of free trade was especially welcome to Asians who frequently understand better than Americans how much it has contributed to the world's prosperity.

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Mostly Democratic Economists Mostly Favor Obama (UPDATED)

I'm not trying to spin this report, commissioned by Dilbert creator, Scott Adams. It is what it is.

Here's their polling sample:

48 percent -- Democrats

17 percent -- Republicans

27 percent -- Independents

3 percent -- Libertarian

5 percent -- Other or not registered

I'd been led to believe there were more libertarian economists.

I'm not entirely surprised about these ideological splits--econ is still heavily influenced by the huge amount of liberals in higher education, though perhaps less so than other departments because of econ's emphasis on empirical evidence--facts--something with which most leftists have a tenuous relationship.

Anyway, most of the economists polled favored Barack Obama. The breakdown on individual issues--where they think each candidate is better--is ... interesting.

(This is analysis, not spin)

I want to point out two things:

On international trade, McCain is favored 51% to 26%. This probably has something to do with the fact that McCain is a free-trader and has demonstrated that time and time again, even when it has hurt him. He has opposed the ethanol guys and told Michiganians that the old jobs weren't coming back.

In my opinion, the single greatest thing that could be done for the world--especially the world's poor--would be an immediate end to trade barriers, subsidies, etc.--in short, free trade everywhere.

Meanwhile, Obama wants to unilaterally re-negotiate Nafta--a free trade agreement that is arguably George H.W. Bush (his administration did the heavy lifting) and Bill Clinton's greatest co-accomplishment. This might have something to do with his low score, despite the huge ideological split which should result in an unbeatable advantage.

The other thing I want to point out is item #12: "Increase taxes on wealthy." This is classic, leftist, redistributive, class-warfare language and causes me to question the neutrality of this poll. A neutral poll would not phrase a question like this. It would be something without classist language like, "tax policy."

UPDATE 3:06pm MDT: Pendulum Politics contributor, RD, writes:

I agree with your conclusions about economists in today's post. I don't know for sure, but it looks like the survey methods were biased. For example, question 12 might have read, "who is more likely to increase taxes on the wealthy?" The answer to that is obvious, and may not reflect normative conclusions of those surveyed. I have a hard time believing that most economists think Obama will be good for the economy, though they are likely to have widely varying views about other issues.

In a follow-up, he added this caveat:

When I say most economists don't think Obama would be good for the economy, I am basing this on his rhetoric. Whether he sticks to his platform when in office has yet to be seen (and is, in my opinion, unlikely).

(emphasis added)


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Re: Drilling, A Few Points of Clarification

After reading a few of your comments, we figured the discussion on this blog would benefit from a little issue elucidation.

- First off, though we endorse a carbon tax, we do not believe that it is realistic to expect one in our lifetime. Americans would probably throw the president and party who enacted such legislation out on their posteriors. The only way this works is if it is coupled with a cut in income taxes and corporate taxes as we suggested in our last post. Even then, passage of of a carbon tax remains an extremely long shot.

- Let drilling be part of a comprehensive plan. The global warming fetishists also happen to be the same people who have been anti-nuclear and in our neck of the woods (Washington State) anti-hydropower. Of the alternatives to fossil fuels in providing electricity to Americans, nuclear power is the only one even close to having proven capacity to produce. All the other "alternative" energy options combined produce something like 0.5% of all the energy consumed in this country. And this, even after the huge subsidy to their production and the high price of oil.

- All of which brings us to our point about R&D (research & development, to the uninitiated). Spend money on R&D, but do so in a cost effective fashion. We'd like to see a competition with a $100 million prize to the team or corporation or university or whoever was able to come up with the cleanest most viable alternative energy source. It does no good to simply throw money at wind or solar or whatever when the "solution" (though we doubt there will ever be just one OR that we'll ever truly go away from fossil fuels) may be something that has not ever been discovered yet.

A command and control solution to our energy problem will not solve the problem. We guarantee that the cure will be worse than the disease. For those of you who doubt this guarantee, we point, once again, to the ethanol debacle. Mandate ethanol, starve the already poor and starving in lesser developed countries.

- We agree with Lomborg and the consensus conference of earlier this year. The money being expended trying to cool the earth could be better spent in other areas. And, efforts to curb global warming, which studies show will have little to no impact, will hinder economic development that would, in the future, enable us to develop the technology necessary to actually do something.

Want to do some good in this world? Good that would actually save lives and make them better--make the world a better place?

Per the consensus, the most cost-effective ways to help the world's poor:

1. Vitamin A & zinc supplements
2. Doha trade round
3. Iron supplements and salt iodization
4. Expanded youth immunization
5. Biofortification of seed stocks

Those of you who click through to the article will find global warming-related initiatives at the bottom of the list. Even global warming R&D is near the bottom of the list. But then, we don't really care about developing new energy sources because of the environment. We don't think it's as serious a problem as the GW fetishists.

- Re: the millions less miles Americans drive today versus a few years ago: this is due far more to the price of gasoline than to any efforts of the GWF's.

- Drilling off the coasts is only part of the solution. And admittedly, not a short term one. We hope only to derive short term political gain from the issue, but we believe, and there is reason to do so, that drilling could help America's long term issues with energy dependence. Banning development of domestic oil and shale-oil is a stupid policy and stupid Democrat Party "article of faith." If they want to hold to it, they should be punished at the polls. But in addition to drilling off-shore and in ANWR, we think Congress should open up America's shale-oil supply to development and production. The numbers we've read--1.5-2.6 trillion barrels--that could potentially come from those sources are huge. They could be and would be developed and produce oil the same way as the Canadian tar sands. Coal liquefaction is another fossil fuel alternative.

There is energy to be had on American soil. And it can be extracted cost effectively. We should free American corporations to get at it. Fossil fuels will always be part of the American energy picture because they are there and they are cheap--far cheaper than the "alternatives." And, as they dwindle, market forces will drive innovation that will bring other energy alternatives online--the same way we went from whale oil to light sweet crude.

- For those of you religiously opposed to fossil fuels, your next alternative should be nuclear power. It is proven and it is clean. Call on your local representatives to do what is necessary to free the American nuclear industry from onerous regulations and frivolous lawsuits. In the nuclear sense, we should follow the example of the French, whose energy needs are satisfied in large measure by their extensive nuclear power program.

Our comprehensive energy/environment policy recommendations:
- open American coastlines, ANWR to traditional oil drilling.
- permit development of shale-oil extraction.
- enact a carbon tax combined with a cut in income and corporate tax.
- expand nuclear power plant construction.
- introduce cost effective, competitive R&D legislation
- start worldwide campaign to divert money now being spent on ineffective global warming policy towards the Top 5 cost-effective ways to help the world's poor.


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BYU Political Review: More Econ, Less Poly Sci

Just finished reviewing the latest copy of the BYU Political Review. We'll give them this: they're miles ahead of the opinion writing in the Daily Universe. But all articles are not created equal. And for some reason, some political science majors misuse big words, presumably to make themselves sound smart.

Anywho, we general-ly (salute) find ourselves agreeing more with the articles written by econ majors than we do poly sci majors.

(Full disclosure: we were once a poly sci major. Whew. Feels good to get that one off the chest.)

Click the links to see what we mean.

Good (in our opinion):

• Critiquing Society by Ryan Fairchild
• Stupor Tuesday by Tim Taylor
• Mitt Can't Blame The Ref by Ryan Decker
• Why Romney Lost by Zach Davis

Bad (as above):

• Why You Will End Up Voting For Obama by Craig Janis
• Why I'm Voting For McCain by Austin Baird
• So What If Democrats Like McCain? by Robert Liddle
• An Open Letter To The President Of Banana Republic by Tristan Call

Among the ones we liked, there are many points and even entire articles with which we did not agree. But we liked them. Because they were logical and made sense. And didn't try to use or misuse too many big words to make themselves sound smart (cue someone's critique of us for using schadenfreude). Additionally, one of the ones we didn't like was written by one of our friends. Just because he's our buddy doesn't mean he gets a pass.

Our liberal friends will be happy to note that many of these articles embrace, at the very least, a liberal foreign policy agenda. And though we've mentioned it before, it merits bringing up again in this post: BYU professors politics by-and-large match the politics of their peers at other universities. That is to say, they tend to be Democrats.

Of the 39 or so professors in our major (history), two were registered as Republicans. An informal poll of the poly sci department showed some 80-90% were dems. Economics is probably more conservative/libertarian. Business school is no doubt conservativeish. But if they're in an arts, humanities, social science department(engineering probably leans conservative as well), they're more likely to be left-leaning. We're sure they do their best to be fair. But it's hard not to let your bias infiltrate your teaching. As anyone knows, it's the biases we're not aware of that are often most damaging.

All of this is by the by. Back to BYU PR. The article that annoyed us the most was the protectionist, "open letter to the president of Banana Republic." The condescension of this little article probably matches the condescending tone we use when critiquing other writers' word usage and grammar. Seriously. Take for example, this line:

I am unconvinced by your rationale for not publishing a list of the factories that Gap contracts with. The reasoning, from your online FAQ, was that: “We invest a lot of time, effort and money in identifying factories that meet our product-quality and vendor-compliance standards…We believe it would be unwise to provide a complete list of approved factories for our competitors to use.” Without question, I believe that protection and accountability for labor standards is worth the cost and the competition. I do not accept that obscuring specific and detailed information on particular contracts and factories is necessary for Gap’s financial survival.

How, exactly, does Tristan expect Gap to gain a competitive advantage over their rivals if they disclose all of this information? Tristan's lecturing tone belies a total ignorance of economics and business. When confronted by a so-called sweat shop, the only question he should ask is, "can they quit if they want?" That's it. Because if they can, and they don't, it's because their sweat shop job is better than the alternative. And who is he to tell them otherwise? It's that kind of sanctimonious, condescending, know-it-all-ism, that really chaps our asterisk.

His last graph centers on the "excesses" of executive pay. Again, Tristan, it's basic economics. Low level workers get paid like low level workers because they are easily replaced. Top level execs get paid gazillions of dollars because they are not easily replaced. And they do the things that keep Gap in business and employ all the people at those 2000 factories you mentioned. If they weren't doing their jobs or weren't worth the money, they would get fired.

Congratulations, Tristan. You bought the talking points of the protectionists--especially labor unions. They don't care about the environment in Brazil or Chinese working conditions. They just care about their jobs. The truth is, who are we to tell Brazil what to do with their rain forest? Or to tell the Chinese workers that they shouldn't work 15 hour days for 25 cents? Obviously they chose that job because it was better than the alternative.

We'd like to go on and pound on all the fair traders, but it's late, and mom says it's time for us to get off the soap box.

Justin, Spikers, can we agree on free trade?


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Daily Primer: Oil Companies are Awesome

- Today marks the 10 year anniversary of the Information Technology Agreement. This agreement enabled the technology led expansion of the last decade. Don't believe us? Check out this bit of information from a great article on the impacts of this free trade agreement:

What impact did all this have on the U.S.? The best way to answer is in terms of productivity, which is the single most important metric to gauge the standard of living for any country. From 1973 to 1995, output per worker hour in the nonfarm business sector grew at just 1.35% per year. Then in 1995, productivity growth began to accelerate. From 1996 through 2006 it doubled, to an average annual rate of 2.7%.

The importance of this productivity acceleration is difficult to overstate. At the previous generation's growth rate, average living standards required 52 years to double. At the current growth rate, average living standards need just 26 years to double. This carries profound implications for the well-being of all Americans.

It's this type of growth that makes America the richest nation in the world. This is why our definition of poverty includes households that own multiple tv's and have air conditioning. And free trade doesn't only enrich America, it raises the standard of living of every country that engages with America in these sorts of free trade pacts. It's why Hong Kong is richer than mainland China and why Taiwan, Japan, and South Korea exploded economically over the last 20-30 years.

We should all be free traders and sometimes we wonder that we're not. And then we walk past that pesky "Fairtrade" cafe at school. To see what else we've posted about free trade & business click here, here, here, here, and here.

- Check out this great defense of the oil industry. These guys are politicians' favorite punching bag and it's a shame they even need a public defense. From the article:

There are two American oil industries. One exists only in the minds of its critics, many of whom are politicians. When prices and profits rise, as happens in a cyclical business, the critics demand new antitrust and other legislation. When prices and profits inevitably fall? Silence.

The other American oil industry exists in the real world. It's intensely competitive, innovative and subject to more scrutiny and tougher antitrust enforcement than any other segment of the economy. And it's adept at meeting the diverse and dynamic needs of American consumers.

They endured 15 years of below average profits, finally have a few good years, and now Congress wants to nail them for "price gouging." Does anyone even know what that is? Then, rather than easing regulations that would speed up exploration for new oil supplies (and alleviate our dependence on Middle East oil) or build new refineries, Congress adds more hoops (ethanol, anyone?). All of this combines to make gas more expensive. It's a testament to the market and oil companies themselves that the price of gas has remained relatively low. In fact, when taking inflation into account, the price of gasoline has experienced only mild increases since Americans first started putting it into their Model T's.


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Outsourcing Redux

Free trade is one of those ideas that seems so great and so logical, we often forget that not everyone agrees. That is, we forget until we walk past a "fair trade" protest in Seattle or the "Fair Trade" cafe on campus at UCL. We can safely conclude that these people have never taken a basic economics course.

Today, after discussing CEO pay, Wal-Mart, free trade and other cool economic things, we did a little online research, re-watched the first volume of Milton Friedman's "Free to Choose," and found Greg Mankiw's blog. Among the many things posted was this gem, written back in 2004 about the outsourcing debate, but very readable and applicable today.

This dedication goes out to all you protectionists out there, wherever you may be. We know Valentine's Day was last week, but we hope you'll forgive our tardiness.

_____

Adam Smith on Outsourcing

By N. Greg Mankiw

If the American Economic Association were to give an award for the Most Politically Inept Paraphrasing of Adam Smith, I would be a leading candidate. But the recent furor about outsourcing, and my injudiciously worded comments about the benefits of international trade, should not eclipse the basic lessons that economists have understood for more than two centuries.

To avoid making the same mistake twice and clinching the award, I should let Mr. Smith speak for himself. Here is what he said in his 1776 classic The Wealth of Nations: “It is maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy...What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage.”

This is the basic theory of international trade. Since Smith penned these words, economists have added rigor to the analysis (thank you, David Ricardo) and have conducted numerous empirical and historical studies of the effects of trade. The verdict is in: Smith was right. Few propositions command as much consensus among professional economists as that open world trade increases economic growth and raises living standards. Smith’s insights are now standard fare in Econ 101.

Yet, whenever the economy goes through a difficult time, as it has in recent years, free trade comes under fire. Some people now fear that trade is responsible for recent weakness in U.S. labor markets. The concern is understandable, but it is simply not true. Over the past three years, job losses are more closely related to declines in domestic investment and weak exports than to import-competition. To the extent that the rest of the world threatens U.S. prosperity, the main problem is not rapid growth in China and India, but slow growth in Japan and Europe.

Of course, global competition has caused employment declines in some industries. The world trading system is changing along with technology. Goods that could once be produced only domestically can now be produced abroad and imported over fiber optic cable. The Internet and advances in telecommunications have meant that more Americans are competing with workers in other nations. Even if more competition is good for consumers, it can produce very understandable anxiety among some workers and their families.

These technological changes, however, have not rendered Smith’s insights obsolete. The same principles apply to offshore outsourcing of services as to traditional trade in goods. This has been confirmed in a recent study by the McKinsey Global Institute. McKinsey researchers tallied up the costs and benefits associated with outsourcing and found that for every dollar the United States sends abroad, we get back about $1.12, resulting in a net gain of $0.12. Smith would not have been surprised.

Some people fear that Americans cannot compete with low-wage workers abroad, or that global competition will mean that wages will “race to the bottom.” The truth is that we can prosper in a global economy because our workers are among the best in the world. Our real wages are ultimately determined by our productivity, and American productivity growth has been spectacular over the past three years.

So, if trade is not the problem ailing the U.S. economy, what is? Smith again has the answer. “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things." This fits perfectly with three of the President’s priorities: defending the homeland against terrorist threats, reducing the tax burden on the American people, and reforming the tort system. (If Smith overlooked the importance of ensuring a reliable energy supply and reducing the cost of health care, we can forgive his eighteenth-century myopia.)

The President, like Smith, believes in the free enterprise system. The goal of policy should be to open up markets, not to retreat behind walls or throw rocks in our harbors. Economic growth is not zero-sum. Prosperity in one country is not a threat to prosperity in another. Free and open markets can mean better jobs both for Americans and for our trading partners around the world.

It may be a mere coincidence that Smith’s great book was published the exact same year that the Declaration of Independence was signed. But the founding fathers of the United States share an intellectual bond with the founding father of economics. They both believed that liberty and prosperity go hand in hand. Our founding fathers were well aware of Smith’s work. Benjamin Franklin knew Smith personally. When Franklin quipped that “No nation was ever ruined by trade,” he likely meant it as an understatement.

Perhaps quoting Adam Smith is risky. Smith was British, so some people may accuse me of outsourcing economic advice. But import competition is not a threat. I have great confidence that President Bush’s policies will grow the economy and create a job for every American who wants one, including his politically tone-deaf economist.

Dr. Mankiw is a professor economics at Harvard and former chairman of the Council of Economic Advisors.


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Trade Deficits: Good or Bad?

By Walter E. Williams

Two recent articles ought to give pause to current political and journalistic ignorance, perhaps demagoguery, about our international trade deficit. In a December Wall Street Journal article titled "Embrace the Deficit," Bear Stearns' chief economist David Malpass lays additional waste to predictions of gloom and doom associated with our trade deficit.

Since 2001, our economy has created 9.3 million new jobs, compared with 360,000 in Japan and 1.1 million in the euro zone (European Union countries that have adopted the euro), excluding Spain. Japan and euro zone countries had trade surpluses, while we had large and increasing trade deficits. Mr. Malpass says that both Spain and the U.K., like the U.S., ran trade deficits, but they created 3.6 and 1.3 million new jobs, respectively. Moreover, wages rose in the U.S., Spain and the U.K.

Professor Don Boudreaux, chairman of George Mason University's Economics Department, wrote "If Trade Surpluses Are So Great, the 1930s Should Have Been a Booming Decade" (www.cafehayek.com). According to data he found at the National Bureau of Economic Research's "Macrohistory Database", it turns out that the U.S. ran a trade surplus in nine of the 10 years of the Great Depression, with 1936 being the lone exception.

During those 10 years, we had a significant trade surplus, with exports totaling $26.05 billion and imports totaling only $21.13 billion. So what do trade surpluses during a depression and trade deficits during an economic boom prove, considering we've had trade deficits for most of our history? Professor Boudreaux says they prove absolutely nothing. Economies are far too complex to draw simplistic causal connections between trade deficits and surpluses and economic welfare and growth.

Despite all the criticism from abroad and the doom-mongers at home, the world finds our economy attractive. Just as we've been chomping at the bit to buy foreign goods and services, foreigners have been chomping at the bit to invest trillions of dollars in the U.S. Mr. Malpass says our 10-year government bonds yield 4.6 percent per year compared with Japan's 1.6 percent; our government debt is 38 percent of GDP versus 86 percent in Japan; and while Europe's debt to GDP ratio is not as extreme as Japan's, it's not nearly as favorable as ours.

Here's a smell test. Pretend you're a man from Mars knowing absolutely nothing about Earth and you're looking for a nice place to land. You find out that there's one country, say, country A, where earthlings from other countries voluntarily invest and entrust trillions of dollars of their hard earnings. There are other countries where they're not nearly as willing to make the same investment. Which one of those countries would you deem the most prosperous and with the greatest growth prospects? You'd pick country A, which turns out to be the United States. As such, you'd be just like most of the world's population who, if free to do so, would invest and live in the U.S.

The late Professor Milton Friedman said, "Underlying most arguments against the free market is a lack of belief in freedom itself." Some people justify their calls for protectionism by claiming that they're for free trade but fair trade. That's nonsense. Think about it: When I purchased my Lexus from a Japanese producer, through an intermediary, I received what I wanted. The Japanese producer received what he wanted. In my book, that's a fair trade.

Of course, an American auto producer, from whom I didn't purchase my car, might whine that it was unfair. He would like Congress to impose import tariffs and quotas to make Japanese-produced cars less attractive and available in the hopes that I'd buy an American-produced car. In my book, that would be unfair.

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of More Liberty Means Less Government: Our Founders Knew This Well.


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This Guy is a Genius

In the Core Course of our Masters program, we explore the question, "what's modern, about modern history?" It's broken up into 4 themes which are taught by 3 different professors. The first set of seminars explored the Historiography of Modern History and History in general and the second, current seminar, has explored history through Nationalism.

This week we gave a presentation based on an article by Prasenjit Duara entitled, "Transnationalism and the Challenge of National Histories." It is from Rethinking American History in a Global Age, Thomas Bender, editor. Among other things, he warns against the use of history to promote ultranationalism and encourages a study of history that does avoids using the current evolutionary borders as limits or guidelines to historical research ie. British History, American History, Modern Germany, etc. He cites several examples in China and the Mexican border that show how history cuts across borders and must, to be truly understood, be examined locally.

In his Chinese local example, he shows how two different regimes in China plus Japan all used a folk history to promote different ends. He argues that this is part of the tension that exists between modernity and tradition--a Marxist argument that has been passed as fact. The Fascist regime in Japan and the Marxist and Fascist regimes he refers to in China most assuredly bent the history to establish their legitimacy as governors of Japan and China respectively. This does not, however, necessarily mean that an either/or dichotomy exists between tradition and modernization.

The Unites States, unlike those Chinese and Japanese governments, does not suppress alternate histories. We have, collectively, been forced to come to terms with the ugliness of our history--treatment of native peoples, slavery, women, etc., have all been incorporated into our history and collective memory. Despite these scars of history, we continue to embrace the good traditions of our past while looking forward to continued modernization. Such is the case in democratic, pluralistic societies.

We've linked to One Cosmos a couple of times in the past, and do so again here because of the light he sheds on this tension between tradition and modernization.

How do you tie free trade, progressivism, the tradition of the religious right, and scientific revolution into one post? Like this:

But what to do about it? The paradox, or “complementarity” at the heart of the modern conservative movement is the tension between tradition, which preserves, and the free market, which relentlessly destroys in order to build. While individual conservatives may or may not contain this tension within themselves, the conservative coalition definitely does, with the “religious right” on one end and libertarians and free marketeers on the other. People wonder how these seeming opposites can coexist in the same tent, but the key may lie in their dynamic complementarity, for freedom only becomes operative, or "evolutionary," when it is bound by transcendent limitations -- which, by the way, is equally true for the individual.

The ironically named progressive left is an inverse image of this evolutionary complementarity. This is because it rejects both the creative destruction of capitalism and the restraints of tradition. Therefore, it is static where it should be dynamic, and dynamic where it should be static. It is as if they want to stop the world and “freeze frame” one version of capitalism, which is why, for example, they oppose free trade. While free trade is always beneficial in the long run, it is obviously going to displace some people and some occupations. It is as if the progressive is an “economic traditionalist,” transferring the resistance to change to the immament realm of economics instead of the spiritual realm of transcendent essences.

I know this is true, because it is what I used to believe when I was a liberal. For example, I grew up at a time when most people worked for large corporations that gave their employees generous pensions and health benefits. As such, it seemed "natural" or normative. In reality, this was just a brief phase of American capitalism, lasting from the mid-1950’s through the 1970’s. But backward looking progressives act as if this aberration was “in the nature of things.” They have a similar attitude toward factory jobs in heavy industry, as if we could somehow go back in time and preserve these high-wage, low-skill jobs.

But while the progressive is thoroughly backward looking with regard to economics, he is the opposite with regard to the spiritual realm. For him, mankind was basically worthless until the scientific revolution, mired as he was in myth, magic, and superstition. Rather, the only reliable way to understand the world is through the scientific method, which has the effect of throwing overboard centuries of truly priceless accumulated spiritual wisdom. It literally severs man from his deepest metaphysical roots and ruptures his vertical continuity. In reality, it destroys the very possibility of man in the archetypal sense -- i.e., actualizing his "spiritual blueprint."

A new kind of man is born out of this progressive spiritual inversion. Yesterday we spoke of castes and of “spiritual DNA.” Progressives, starting with Karl Marx, waged an assault on labor, eliminating its spiritual significance and reducing it to a mindless, collective “proletariat.” You might say that the left honors labor in the same way they honor the military: both are losers.

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