-
Disabling American Sovereignty
May 22, 2013 | 13 comments
-
Another Correa Problem
April 15, 2013 | 9 comments
-
The Lady Wasn’t for Turning
April 8, 2013 | 20 comments
-
Let’s Lose LOST
March 26, 2013 | 25 comments
-
The Missing Word on Trade
February 15, 2013 | 4 comments
Among the Intellectualoids
The High Price Economy
Obama allies to the world’s poor: Stop this greed. Low prices won’t set you free.
What is to blame for Americans’ economic woes? Why, Americans’ selfish desires, according to a school of thought that appears to be currently dominant in the White House. An excellent example of this line of thinking is former presidential economic advisor Robert Reich’s recent article in the Financial Times, in which he claims America’s “insatiable consumers” have destroyed the economy and the “hubs of our communities” with their relentless pursuit of “great deals.” The “lure of the bargain,” suggests Reich, is a destructive force.
Well that’s rich — Berkeley professor Reich, clearly a member of the 1 percent, attacking the 99. While Reich consider low prices a great evil, he ignores what they actually mean. Low prices indicate that a good or service has become more abundant — that is, more available. This availability of goods and services is the very definition prosperity. The pursuit of low prices, which so offends Reich, is just the pursuit of prosperity — the pursuit of happiness that the Declaration of Independence called “unalienable.”
Reich blames Americans’ desire for lower prices, prosperity, and happiness for sending jobs “elsewhere.” But he ignores the fact that those lower prices mean we have more money available to buy other, costlier goods and services here in America. So rather than make snow globes and t-shirts, Americans develop advanced technology, manufacture airplanes and cars, and provide the world’s best financial, health, and education services. They use iPads that put enormous competitive pressures on laptop manufacturers and publishers to provide more creative services to people who want them.
It is enough to make on wonder whether Reich has ever read Schumpeter, who in 1942 pointed out: “The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.” (Capitalism, Socialism, and Democracy, p. 67)
Trade freed Americans from the sweatshop and now it is freeing them from the factory floor. It will do the same for Asians and Africans. Yet Reich would end trade with poor countries, since their environmental and working conditions “offend common decency.” Does Reich truly believe these workers’ usual alternative, subsistence farming, can gain them a “decent” standard of living? Does he really believe he knows better than the poor in developing countries what is best for them? Not allowing those workers to decide for themselves would keep them in poverty. Meanwhile, middle-class Americans are made worse off by higher prices.
Reich isn’t the only Obama ally who wants higher prices. Treasury Secretary Timothy Geithner wants more subsidies to raise housing prices — even after those policies created a housing bubble that led to the current financial crisis. Commerce Secretary John Bryson has championed the cause of higher energy prices since the 1970s, telling Justice Stephen Breyer during a 2010 panel discussion that “energy prices are going to have to go up.” Breyer responded by saying, “We better get away from oil. That’ll help us.… Raise the price of oil! Raise it through the roof, and then people will look for substitutes.”
It’s easy for rich liberals to ask for higher taxes and higher prices, but these policies dramatically damage Americans’ standard of living. President Obama’s cap and trade bill would have cost each American family $1,761 per year, according to the White House’s own figures. While that bill failed, Obama’s anti-drilling, anti-pipeline, anti-energy agenda is already forcing Americans to spend more on gas as a percentage of their income last year than at any point in the last three decades. Higher prices can and do kill the American dream.
Reich wants to “protect jobs and wages” with “democratic institutions that shape and constrain markets” — the very same institutions he claims are controlled by corporations. The reality is that large corporations do benefit from government meddling in markets. Regulations increase costs that large companies can absorb but that can drive small companies out of business.
Low prices mean abundance and prosperity. High prices mean scarcity and privation. The dynamic capitalism that works to drive prices ever lower has helped make America the most prosperous nation on Earth. The high price economy the Obama administration and its supporters want will benefit no one — except, ironically, some of the 1 percent.
About the Author
Iain Murray heads the Center for Economic Freedom at the Competitive Enterprise Institute and is the author of Stealing You Blind: How Government Fatcats Are Getting Rich Off of You.
About the Author
David Bier is a research associate at the Competitive Enterprise Institute.
Letter to the Editor View all comments (30) | Leave a comment
More Articles by Iain Murray
More Articles by David Bier
More Articles From Among the Intellectualoids
http://spectator.org/archives/2012/01/20/the-high-price-economy
Follow us:
ADVERTISEMENT
Current Issue
- The Welfarians
- The Demise of Money and Credit
- The Great Train Robbery
SPONSORED LINKS
FLASHBACK TO: 1995
-
Pope Culture
A man of faith in a godless age is hitting Americans where it hurts.
-
Why the GOP Does Not, Like, Totally Suck
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
-
Dames at Sea
-
In the Absence of Guns
In Britain, defending your property can get you life.
-
The Metaphysical Martini
-
Counting the Costs of Clintonism
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
-
Chuck McHagel
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
-
The Legacy of Old John and Mother Fresh-Roasted
-
It’s the Best Time of the Year
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
-
The Bush Crack-Up
Was the President done in by the economy, or by the politics of the economy?
Clip of the Day
ADVERTISEMENT
Bill Hussein O'Stalin| 1.20.12 @ 6:39AM
The entire group in the White House hates America, hates mankind and suffers from many delusions.
Their only hope to hang on to power is to destroy the middle class which is the opposite of what they are claiming.
Let's hope November sees their collective mind sets thrown out of government.
Alan Brooks| 1.20.12 @ 1:01PM
You all think your descendants will be on top , but they wont.
Dave | 1.21.12 @ 1:37PM
Interesting that Bobby Reich seems to blame our current economic dumper on greedy ol' Americans looking for a good deal.
Whoa, Bobby! Imagine ANYONE wanting to buy something for a lower price. I'm thinkin' the only groups against that line of thought are union guys who's inflated wages, benefits and healthcare packages are a direct cause and affect of higher retail prices. But of course, that little attitude adjustment could still be ... adjusted if F.D. Obama gets another forty-eight months at 1600. The Constitution he's already in the process of shredding, and those executive orders are soon to be the norm.
We've been looking for someone to send-out a rescue party, but so far, Sheriff's Boehner and McConnell have been too busy dabbing their eyes and whimpering ... "Please, don't call us bad names. We promise to be good."
In the meantime, I suspect Bobby Reich will still be buying his suit jackets at a lower price. Not because he's such a loyal union supporter, but as a general rule, threads are usually cheaper to buy when the only place that carries your size is the boys department at J.C.Penny's.
Appleby| 1.20.12 @ 6:47AM
Its another case of I've Got Mine. In the 19th century when the Industrial Revolution made it possible for peasants to produce and own mass-produced goods for the first time (the original blueprint for Wal-Mart), the cry was heard by those Upstairs that it was wrong for peasants to have things as abundantly although not as high class, as their "betters" -- because how could one promote revolution if everybody was comfortable in the current state of affairs? This is one reason socialism has been slow to engulf America; people who came to America from socialist countries could compare what they'd had with what they could have in America, and they knew better than to fall for that.
Let us hope that America catches on and throws this group of rascals out.
VonMisesJr| 1.20.12 @ 10:51AM
Appleby is right again. If you read Tocqueville and understand the "Enlightenment" philosophers, you will find that what really ticked off the Monarchy, Nobles and Aristocrats was the "Industrial Revolution." Serfs were not slaves, but indentured servants that had a contract that did not transfer to their progeny. But before the "Industrial Revolution," they had nowhere to go. Once factories opened and technology allowed average people access to wealth, it turned their class society on its head. The Burghers and former serfs became wealthy and the elites lost their workers. Moreover, the new rising class no longer needed the elites, and resented or refused to pay quitrents and other taxes. Walla, revolutions gripped continental Europe from 1760-1800.
So this is what Von Mises explains in his writings as the root of the union bashing of industrial work. While there were early abuses, on the whole, the industrial revolution freed serfs from working their lords land for their sustenance. Now they could work hard for themselves (capitalism and Smith's "Wealth of Nations") and steadily progress financially and intellectually.
So to understand Obama, Pelosi, "Righteous" Reich and all other socialist; all you need to understand is that they want to take the Noble status for themselves, and condemn you and your progeny to work their land and pay their quitrents.
Appleby| 1.20.12 @ 7:15PM
The Industrial Revolution also made it possible for women to live independently of men and of their parents, and vastly spread out the gene pool which raised the IQ of the countries where it took hold. (The No. 1 effect of the popular low-priced automobile, although it was unlooked-for and pretty much ignored, was the change in mating habits it engendered (and I use the term advisedly)). Later the automobile made it possible for extended families to escape from one another and live in communities of people solely in their own generation/age group, which was not an improvement. But until the Pill came among us, the automobile and the Industrial Revolution that spawned it did a lot to raise the IQ of the Western World.
JmsA| 1.20.12 @ 10:42PM
The problem is that the offspring of those immigrants from socialist countries had been dumbed-down and indoctrinated by socialists in academia, the arts, the press, etc., etc., etc.--with very rare exceptions.
VonMisesJr| 1.21.12 @ 9:40AM
JmsA, You are spot on in that centrally planned statist regimes stiffle innovation. Even if a great man like Thomas Edison invented the dictation machine that became our phonographs, the light bulb and many other innovations; there is no guarantee the government controlled entities would produce them.
But chances are that he would have never tried since the government would be picking his occupation or demanding he participate in a state approved venture. Look at Cuba who still repairs and drives 57 car models and earlier. The Soviets have no Apple or Microsoft. China steals our military and technology secrets currently.
The only thing our elitist have stolen from Cuba, the Soviets and China is their ideology!
pellet mill | 3.12.12 @ 6:24AM
The problem is that the offspring of those immigrants from socialist countries had been dumbed-down and indoctrinated by socialists in academia, the arts, the press, etc., etc., etc.--with very rare exceptions.
PattyMor| 1.20.12 @ 7:44AM
I watch how things are made from time to time. I am always amazed at how great these companies are, from making pencils, cheese crackers to engines. The engineering is a marvel and the industrial processes are truly productive. Cranking out a multitude of goods at good prices
Reich is emblamatic of the Ruling Class. Goods and riches for me, but not for thee.
numbatdog| 1.20.12 @ 8:14AM
Reich.s comments are typical socialist / marxist beliefs once they've taken their guard down. They dont believe in private property ownership or personal possesions and are therefore opposed to technical advances that make it easier for the individual. So they are against advanced drilling techniques which make oil and gas abundent and cheap, provide jobs and sell more cars. Instead they push high speed trains which they will control.
Leftist technocrats want to control you from A - Z. Anything else is just detail.
Big Tony| 1.20.12 @ 8:30AM
Great point Appleby! The Report from Iron Mountain expands on it by stating that if the people become too comfortable they will discover that they do not need the government to keep them safe and secure. This is a threat to those in power, so the common person must be keep from acheiving a life of abundance. This is mainly accomplished high taxes, which are then wasted on various boondoggles and war. But governmental regulation also server that same purpose.
buckeyeman| 1.20.12 @ 10:38AM
There's never been a left-right schism about whether acute appendicitis should result in an appendectomy. But pseudo sciences like economics and, apparently, meteorology are driven by politics. I'm always amazed that "economists", who speak in a pseudo intellectual jargon, actually don't have the first clue about how economies actually work.
Indiana Alex| 1.20.12 @ 10:54AM
Whenever I hear someone suggest that the problem with the American economy is that we don't have enough manufacturing jobs my immediate question is "why is that a problem?"
The ultimate answer seems to be that we don't have enough low skilled jobs that pay above market wages.
When looked at from this perspective I think it becomes clear that the actual problem is that the current administration is making economic policy decisions based on thinking that this is a problem.
Buck Ofama| 1.20.12 @ 12:09PM
We must exterminate the commie rat cocksucker from the white house asap.
cicero| 1.20.12 @ 2:23PM
The problem with people like Reich is that they have never produced anything, but have spent their entire lives being grossly overcompensated for associating with one another, and with politicians. They only have a glamorized vision of the noble working man. They don't see him as a human being who wants to obtain the best things in life, without killing himself in the process.
One of the problems we have in analyzing where our economy is vis a vis our overly expensive public sector is that we include the fruits of the labor of those such as Reich in the GDP. Right now, banking and financial services count for about 30% or our calculated GDP. These transactions produce nothing but images on paper. If they were taken out of the mix, we would see what the actuall cost of this bloated Leviathan are. What has Reich ever produced to justify the numbers on his tax returns?
Certainly nothing of any value to the people of this nation.
cvrgrl| 1.21.12 @ 10:42AM
@cicero
Winner, well played!
applies equally to barry, puppet failure and betrayer of america
Legarto Rey| 1.20.12 @ 2:28PM
The march of the "subsistence-ists". Western elites who are maniacally driven to force the masses into a subsistence lifestyle, while they live the high life.
Richard Baker| 1.20.12 @ 6:54PM
Reich epitomizes Orwell's comment "There are some ideas so absurd that only an intellectual could believe them.”
Mrs.Vito| 1.20.12 @ 7:22PM
How is it that these schlubs Reichman and Krugman can claim to be economists, yet put forth the most ludicrous theories? But the bigger question is why is it legal for a liberal to major in economics (lol)? I'm incredulous!!
POST American| 1.20.12 @ 9:07PM
-------------------BOTTOM LINE-----------------------
USURY, and most certainly psychopathic,
unaccountable, international, fractional reserve
USURY ----is---- DEGENERATE economy.
It's money is a deviant creation,
upheld by deviance and begetting,
ever begetting, debt serfdom, plunder and
------------------EUGENICS--------------------.
----------BOTTOMLESS EUGENICS---------
"All ye know, and all ye need to know. . ."
Judas| 1.21.12 @ 4:55AM
ian fung fisting a goat
Theo Prinse| 1.21.12 @ 10:47AM
The only way free western man can Measure its scientific and technological proceeding is in terms of Wealth and the Way western man produces wealth is called Capitalism. Capitalism is a balance between growing usury, crony, re-distributive capitalists in corroboration with the top of trade unions, communists, mafia etc ... versus innovative venture entrepreneurship. According to the CIA factbook the worlds total BNP is USD 75 trillion.
In the midst of the financial crisis .. total public (crony) debt is 45 trillion and private (mafia) debt 17 trillion.
Of course islam oil dependency in connection with the antique manned F-35 (30 years) US car industry tied with the Clinton's and their Muslim Brotherhood Outreach betraying the western oriented youth of the Arab world like those in Persia 1979 under Dhimmy Carter .. is also a parameter.
Reich, the Kenian puppet but also Romney as the most viable candidate have already acquiesced in a Weimar, Keynesian Japanese zombie banking economical stagnation for a decade or more to come ...
shipley130| 1.21.12 @ 6:18PM
Morons elected a moron and then that moron hired more morons. What a moronic thing to do.
POST American| 1.21.12 @ 9:11PM
----------------------FINAL WORD----------------------
"---ALL ye need to know. . ."
Those with an ear -----TAKE HEED
DANSHANTEAL| 1.22.12 @ 12:54PM
I FOLLOW BOBBY REICH VIA HUFFPOST. HE'S A REAL CARD. HE WANTS HILLARY IN THE WHITE HOUSE AFTER OBAMA. SHE AND HER OLD MAN ARE STARTING A HEDGE FUND TO GO WITH THE HUNDRED MILLION MADE BY SPEECHESAND BOOKS. IT'S A SIMPLE MATTER OF DO AS I SAY NOT AS I DO.
POST American| 1.22.12 @ 9:22PM
---------------------------P.S.------------------------------
---And speaking of the CFR and political
figures et al---
"WHY is their membership in this
organization important? Because it's
avowed purpose is to create a NWO
-a Global Government based on the
model of collectivism -and that includes
the elimination of U.S. sovereignty
and nations worldwide.
That's WHY it's important.
The people running our country
are determined to destroy it."
-G Edward Griffin
(Historian)
----------------------------------THAT'S WHY
Petronius| 1.23.12 @ 1:18AM
Reich does not ignore the Fact that low prices leaves people with more disposable income. He hates it for that reason. So did Marx
POST American| 1.23.12 @ 10:01PM
------------------BOTTOMLESS LINE------------------
Put aside the 'perception managers'.
KEEP ALL EYES on the Globalist CFR
RED China economic transfer and full-spectrum
-------------------TREASON OP---------------------.
USURY, and so much more, unaccountable,
psychopathic, Global, fractional reserve
USURY ----is ABOMINATION.
Their 'Free Trade' ---is insider trading
and monopoly.
The long term agenda is world authoritatian
CON-solidation and CON-troll
----and BOTTOMLESS EUGENICS.
Even when USURY is 'working' it begets
deviant economy.
Their 'capitaliism' supplants and stamps
out FREE ENTERPRISE.
"Communism is nothing but capitalism
without competition."
SO, clean out your churches.
Heed the LAW of MOSES.
Close with the aged, your family,
your neighbors, your locality.
The Globalist RED China TREASON OP
----------------is being X-posed---------------.
EUGENICS is in the spotlight.
-------HUAC/ Nuremberg------------is coming.