Biggest lies of ‘11?

Well reading Foreign Policy for that North Korean blog entry, I came across “The 14 Biggest Lies of 2011,” by David J. Rothkopf. I like list articles a lot; lots of information, in a very short time span, and gets you to focus on them. Sometimes, lists are completely, totally wrong; other times they are spot on; and in this case, it’s quite mixed. I want to offer some rebuttals to a few of his items, because they seem, to me, to be wildly inaccurate. Perhaps they are lies, but his own answers to them are not exactly encouraging. I will only focus on that we disagree on, to save space, but do read the entire list. I actually find it rather humorous…in a morbid sort of way.

I will start out by agreeing 100% with his introduction, however, that in DC, that lying is not an art form, but rather “is more reflexive, like breathing or taking cash from fat cats.” It is nothing but a pit of lies, and the Great Obamessiah himself is one of the best of them. All for civil liberties and ending the wars while running for president, not so much when he actually got into office. What a shame.

But onto Mr. Rothkopf’s list:

6 - “America is unthreatened by China’s growth.”

Rothkopf does not offer much as to why this is a lie, other than “it’s not true.” But there are many reasons why we are not threatened by China’s economy. The first is, of course, the classic free trade argument. The Chinese and American economies are, at this point, quite interdependent; we are not “threatened” by Chinese growth because Chinese growth is our growth. Cheap Chinese labor gives us relatively cheap electronic consumer goods (could you imagine how expensive an iPod would be if Apple had to make it in America? Good lord—going price would be around $700, at least) which saves American consumers money, and thus makes us better off all around. As Mish Shedlock puts it:

If someone wanted to give you tires for free would you take it? If you needed new tires, surely you would. Would there be anything wrong with it?

The answer is of course not. Chinese manufacturers should be able to sell tires at whatever price they want, including giving them away. If China “underprices” tires, it is to the advantage of US consumers who have more money to spend on other things, including cars, boats, and houses, perhaps made in the US, perhaps not, but definitely shipped within the us providing countless jobs along the way.

Trade is not between nations, trade is between individuals. Both parties have to agree the transaction is mutually beneficial or there is no trade.

The other argument is that China is going through its own recession right now, and is facing its own economic crash. If anything, we’re threatened more by Chinese contraction than Chinese growth, though due to links in the commodities market, Australia should be worrying more about it than us.

These fears of “Chinese growth is a threat to America!” is old-school protectionist, jingoist nonsense, only cropping up again because of the recession. Junk it. That’s the lie.

7 - “We believe diplomatic pressure may stop Iran’s nuclear program.”

Mixed bag here: on the one hand, I agree with Rothkopf that the auxiliary lie—“America will never attack Iran”—is bogus because we kind of already have done that. I also agree that diplomatic pressure won’t stop Iran; they will continue with it no matter what we say. But I get an implication that we should use force to stop Iran, which I completely disagree with. I might just be reading that into it, though.

8 - Tie: “Republicans are the problem” and “Democrats are the problem.”

Actually, I disagree with Rothkopf here, for two different reasons. One, he says that “neither party is the problem,” but actually, I would say both parties are the problem, for their rigid division of the US populace and their inflexibility in the face of new challenges, plus the fact they are thoroughly, thoroughly corrupt. Which brings me to the second reason why I think Rothkopf is wrong: he misunderstands why money is in politics. He says money is the problem, as if it’s just in and of itself, but he doesn’t ask why is it the problem. And this comes down to one of the bigger differences between libertarians and so-called “progressives.”

There’s only one reason why so much money flows into politics: to influence the outcomes of government policy. And the only reason you would want to influence the outcomes of government policy is if the government had the ability and power to control the markets, like it does today. Give government that power to meddle freely in markets, to regulate, tax, and throw up ludicrous barriers to entry, and of course Big Business is going to invest in Big Government. The larger you make government, the more business wants to invest in it. It’s really that simple.

What Rothkopf and most who lament the same thing are ignoring is that you really can’t get the money out of politics. If there’s going to be someone with the power of life or death over your business and your livelihood, you’re going to do your utmost to influence that person in your favor and screw the other guy. No amount of “campaign finance reform” is going to fix that, period. The money will always be there. The only way to minimize it’s influence is to get the government out of intervening in the marketplace, aside from very limited and clearly delineated functions designed to create a level playing field for all. That’s it.

9 - “Cutting the taxes of millionaires helps creates U.S. jobs.”

I am so sick of people saying that this is a lie and crap and whatnot and, in Rothkopf’s case, “it’s an idiotic, insupportable idea.” First of all, if I may be a pedant, it’s unsupportable, and second, if this were so true, why did we have an economic boom after Ronald Reagan came into office? Did you forget that? Did you forget the 90’s? Come on: these are the guys paying everyone else in the country. You don’t see how that won’t bring better economic prospects for all?

I do honestly believe that lowering taxes on the middle class would be a good start, and indeed, I think taxes should be lowered across the board, but when you tally up income taxes and capital gains taxes and whatnot, you actually find that the rich pay the most. As the USAToday notes, “The 10% of households with the highest incomes pay more than half of all federal taxes. They pay more than 70% of federal income taxes, according to the Congressional Budget Office.”

This idea that, somehow, the rich don’t pay anything while everyone else does is the real lie, and furthermore, the idea that not decreasing taxes on the job creators will not lead to more growth (besides being an Orwellianism) is a lie. Rothkopf should stop peddling such inanity.

10 - “The U.S. might default on its debt.”

This one is a mixed bag. I don’t think that the US will default in the next 3-5 years, certainly. We’re in a deep, dark hole, but it’s not imminent. Furthermore, we do have options open to us for the short-term. But on the other hand, when you look at how much unfunded liabilities we have, how our debt is now outpacing our GDP, and that any long-term option other than cutting spending, such as money-printing, would destroy the economy, I can’t say that the US wouldn’t default on its debt. It’s certainly a possibility.

I suppose, on the long term, that disagreeing with only 5 out of 14 is pretty good. Unfortunately, those 5 points we disagree on mean a lot for our country’s future. These idiocy peddlers need to be called out. For too long we’ve muddled through because we haven’t had enough people who will stand up and say, “That’s crap!” That’s why we’re in this recession. That’s why we’re seeing more saber-rattling. That’s why our freedoms are disappearing.

I, for one, don’t want to see them disappear any more than they already have.

 


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