Wednesday, November 28, 2007

Giving Credit Where Due...

My last essay, and let's be honest, a great many of my posts to this blog, was an attempt to call out an example of what I consider to be one of the basic flaws of conservatism.

Yet, I have always hoped that my positions on issues are not mere partisan hack-ary. There are reasonable and intelligent conservative people and ideas that I respect, admire, and agree with. I have conservative friends that I enjoy talking issues with because they are thoughtful, they recognize nuance, and they are as willing to consider ideas that don't come from their "side" as I feel I am.

So, after railing against the Logic (or lack thereof) of the Conservative in my last post, here I am to promote the reasoned commentary, and yes - logic - of a conservative, David Brooks. In his NY Times op-ed column yesterday, Follow the Fundamentals, Brooks made some excellent points that I agree with - yet are conservative in nature. Exerpts follow:

Once upon a time, the fact that hundreds of millions of people around the world are rising out of poverty would have been a source of pride and optimism. But if you listen to the presidential candidates, improvements in the developing world are menacing. Their speeches constitute a symphony of woe about lead-painted toys, manipulated currencies and stolen jobs.
In the first place, despite the ups and downs of the business cycle, the United States still possesses the most potent economy on earth.
Second, America’s fundamental economic strength is rooted in the most stable of assets — its values. The U.S. is still an astonishing assimilation machine. It has successfully absorbed more than 20 million legal immigrants over the past quarter-century, an extraordinary influx of human capital. Americans are remarkably fertile. Birthrates are relatively high, meaning that in 2050, the average American will be under 40, while the average European, Chinese and Japanese will be more than a decade older.

The American economy benefits from low levels of corruption. American culture still transmits some ineffable spirit of adventure.
Third, not every economic dislocation has been caused by trade and the Chinese. Between 1991 and 2007, the U.S. trade deficit exploded to $818 billion from $31 billion. Yet as Robert Samuelson has pointed out, during that time the U.S. created 28 million jobs and the unemployment rate dipped to 4.6 percent from 6.8 percent.

That’s because, as Robert Lawrence of Harvard and Martin Baily of McKinsey have calculated, 90 percent of manufacturing job losses are due to domestic forces. As companies become more technologically advanced, they shed workers (the Chinese shed 25 million manufacturing jobs between 1994 and 2004).
Absolutely. Whether it is on the right or left, Demoratic or Republican presidential hopefuls - there is an irrational fear being preached of America's ability to compete in a world market. We can compete anywhere, anytime, in any arena - and politicians and commentators shouldn't grasp for the low-hanging fruit in order to scare people into votes. We don't need to be reactionary - we need to be leading.

Are there perils and downsides to globalization? Absolutely. But nothing that America cannot deal with - especially if we deal with it in a prudent, progressive way. But to bury our head in the sand and scream "It's Mexico's fault" or "It's China's fault" is no answer. As Brooks closes:
I’m writing this column from Beijing. I can look out the window and see the explosive growth. But as the Chinese will be the first to tell you, their dazzling prosperity is built on fragile foundations. In the United States, the situation is the reverse. We have obvious problems. But the foundations of American prosperity are strong. The U.S. still has much more to gain than to lose from openness, trade and globalization.

1 comment:

MGK821ZA said...

Although he is conservative, to me Brooks seems to write more from the perspective of a supporter of the party in power, which always wishes people to believe that things are basically proceeding optimistically forward under their watchful and prudent leadership. Any water that the ship of state is taking on is not to be considered as serious problem which cannot be easily corrected by simply turning on another bilge pump (or adding a new tax cut, if you will.) Any problems are viewed as over statements by the ‘liberal media’, except for the problem threat of the radial Islamofascists which is seen as receiving too little coverage. So naturally the business health of America is reported to be in good condition by Bush’s economic team. The mortgage default mess was not an issue at all, until Treasury Secretary Paulson suddenly realized (oops) maybe it was a problem and reversed course by calling for an interest freeze bailout program.

Brooks also writes from the position of a sideline member of the New York City financial community. The financial system housed in NYC has greatly benefited from mergers, acquisitions, and real estate deals, which may not provide much long tern benefit to the country as a whole. While manufacturing jobs move overseas, the surplus capital flows back into the financial system through stock buyouts and acquisitions. The recent infusion of capital from Abu Dhabi into Citigroup Corp was seen by Wall Street as a positive rather that a negative. Since we don't make anything, I suppose we will just sell them our corporations. Foreign trade as free trade is constantly bantered about as an almost sacred commandment which can not be modified. China must not be viewed in any negative light less they pull out some of their reserves from our capital and government financial bonds, which would really cause a panic on Wall Street. Yet our current trade situation cannot be said to be working to our advantage as long as we continue to pile up huge foreign trade deficits. I think Paul Krugman has been more accurate in his reporting on the financial condition of America where he notes the average (median) person has not benefited that much during the Bush years.

You wrote about globalization: “nothing that America cannot deal with - especially if we deal with it in a prudent, progressive way”. Perhaps, but there has been little action from the Bush Administration, and I have yet to hear much promising from the Presidential candidates on either side.

On the bright side, the sky is not falling and there is always the fall back solution to monstrous fiscal and trade deficits - inflation and its accompanying devalued currency will make any debt seem relatively smaller.