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Two Americas, One Perspective
The NYT profiles John Edwards and Mitt Romney and the opposite lessons they learned accumulating their own wealth. In a nutshell, Edwards believes in "Two Americas," one where the rich get richer and the other rigged against the middle and lower classes. Romney believes economic growth, fueled by reducing government interference in the markets, will trickle down and help everyone.
A few years ago, I would have been completely on the conservative side of this argument. In a way I still am. I'm not a fan of Edwards' corporate-bashing style and I believe free markets and freedom in general do work. I'm a great admirer of Ron Paul's libertarian platform, though that's more about liberty than about economics. But I'm no fan of Mitt Romney's, or any of the other Republican candidates, and their economic platforms are only a part of it.
My former laissez-faire preferences have shifted to a desire to see the government take a limited, focused, smart role in the economy. Studying economics in college, I learned about externalities. Around the same time, I accepted the consensus scientific view of global warming. Now I'm convinced that a carbon tax and cap-and-trade emissions regulation are critical, and only the government can do those. The Democrats are also right that the tax system creates perverse incentives, beyond those of the free market, toward offshoring jobs, and that needs to be fixed with more than tax cuts.
I have also come to question some core economic assumptions. Reading Barbara Ehrenreich's Nickel and Dimed gave me new perspective on the trickle-down theory: it only works if the people at the bottom, doing all the right things, can actually rise. But real estate prices and other factors make that virtually impossible for many people. Even the Economist, a few years back, lamented the declining social mobility in America. Reagonomics assumes the American Dream is real. If it's not anymore, then the approach needs fundamental rethinking. How that should be done exactly, I don't know, but the Republicans' obsession with rising GDP doesn't adequately acknowledge the problem.
Defenders of the free market point to globalization as both the problem and the solution. The economy needs millions of Mexican workers, and offshores citizens' manufacturing jobs, because of globalization; but we shouldn't do anything to impede globalization, they say, because it will hurt economic growth. So the government just sits back and watches. Every other developed country seems to recognize that the transition to the global economy requires a large dose of government intervention to offset dislocations; read any issue of the Economist and there are articles on Asian economies funding health care or helping some industry. More importantly, to maintain predominance in the global market will require tremendous public investments in competitiveness: in education (to compete with India's engineers), in health care (to help auto makers compete with Japan), in the environment (so we don't go bankrupt in 50 years compensating for underwater coastal cities), and so forth. The global markets won't be good for most Americans unless the country takes a proactive approach to integrating into them.
Cutting taxes is good for liberty and probably good for the economy, but it has to be part of a bigger picture of fiscal prudence. It has to be matched or exceeded by reduced spending, in other words. The U.S. Government's financial statements, released last week, records public debt of $8.9 trillion dollars, and admits, "these projected debt levels cannot be sustained indefinitely... Avoiding the catastrophic consequences of this fiscal path will require action to bring program expenditures in line with available resources. How soon those actions are taken will greatly influence their ultimate impact on the Nation." Making the "tax cuts for the rich" permanent without cutting hundreds of billions of dollars out of the budget, therefore, is not good policy; if anything, spending needs to be increased to foster competitiveness, either by diverting funds from other programs or raising taxes.
So I'm back to Ron Paul and Barack Obama. Paul's economic platform may be slightly nutty, but if it's done incrementally, it just might unleash the trickle-down forces the big-spending Republicans have only dreamed of. Anyway, a revolution of Liberty in the United States of America isn't the worst thing that could happen.
But Ron Paul isn't going to be the next President, so I'm rooting for Obama. Even the conservative David Brooks writes, "I’ve been poring over press clippings from Obama’s past, looking for inconsistencies and flip-flops. There are virtually none." His political philosophy in The Audacity of Hope is impressive and realistic. His style is inspiring. He's proven he has the cojones and intelligence to fight the good fights and get things done. His life and campaign seem genuine and scandal-free. His opponents can't even smear him, because it always backfires. And his experiences in both of John Edwards' Americas and around the world give him a perspective none of the other candidates share. I look forward to watching him defeat his Republican opponent next year.
A few years ago, I would have been completely on the conservative side of this argument. In a way I still am. I'm not a fan of Edwards' corporate-bashing style and I believe free markets and freedom in general do work. I'm a great admirer of Ron Paul's libertarian platform, though that's more about liberty than about economics. But I'm no fan of Mitt Romney's, or any of the other Republican candidates, and their economic platforms are only a part of it.
My former laissez-faire preferences have shifted to a desire to see the government take a limited, focused, smart role in the economy. Studying economics in college, I learned about externalities. Around the same time, I accepted the consensus scientific view of global warming. Now I'm convinced that a carbon tax and cap-and-trade emissions regulation are critical, and only the government can do those. The Democrats are also right that the tax system creates perverse incentives, beyond those of the free market, toward offshoring jobs, and that needs to be fixed with more than tax cuts.
I have also come to question some core economic assumptions. Reading Barbara Ehrenreich's Nickel and Dimed gave me new perspective on the trickle-down theory: it only works if the people at the bottom, doing all the right things, can actually rise. But real estate prices and other factors make that virtually impossible for many people. Even the Economist, a few years back, lamented the declining social mobility in America. Reagonomics assumes the American Dream is real. If it's not anymore, then the approach needs fundamental rethinking. How that should be done exactly, I don't know, but the Republicans' obsession with rising GDP doesn't adequately acknowledge the problem.
Defenders of the free market point to globalization as both the problem and the solution. The economy needs millions of Mexican workers, and offshores citizens' manufacturing jobs, because of globalization; but we shouldn't do anything to impede globalization, they say, because it will hurt economic growth. So the government just sits back and watches. Every other developed country seems to recognize that the transition to the global economy requires a large dose of government intervention to offset dislocations; read any issue of the Economist and there are articles on Asian economies funding health care or helping some industry. More importantly, to maintain predominance in the global market will require tremendous public investments in competitiveness: in education (to compete with India's engineers), in health care (to help auto makers compete with Japan), in the environment (so we don't go bankrupt in 50 years compensating for underwater coastal cities), and so forth. The global markets won't be good for most Americans unless the country takes a proactive approach to integrating into them.
Cutting taxes is good for liberty and probably good for the economy, but it has to be part of a bigger picture of fiscal prudence. It has to be matched or exceeded by reduced spending, in other words. The U.S. Government's financial statements, released last week, records public debt of $8.9 trillion dollars, and admits, "these projected debt levels cannot be sustained indefinitely... Avoiding the catastrophic consequences of this fiscal path will require action to bring program expenditures in line with available resources. How soon those actions are taken will greatly influence their ultimate impact on the Nation." Making the "tax cuts for the rich" permanent without cutting hundreds of billions of dollars out of the budget, therefore, is not good policy; if anything, spending needs to be increased to foster competitiveness, either by diverting funds from other programs or raising taxes.
So I'm back to Ron Paul and Barack Obama. Paul's economic platform may be slightly nutty, but if it's done incrementally, it just might unleash the trickle-down forces the big-spending Republicans have only dreamed of. Anyway, a revolution of Liberty in the United States of America isn't the worst thing that could happen.
But Ron Paul isn't going to be the next President, so I'm rooting for Obama. Even the conservative David Brooks writes, "I’ve been poring over press clippings from Obama’s past, looking for inconsistencies and flip-flops. There are virtually none." His political philosophy in The Audacity of Hope is impressive and realistic. His style is inspiring. He's proven he has the cojones and intelligence to fight the good fights and get things done. His life and campaign seem genuine and scandal-free. His opponents can't even smear him, because it always backfires. And his experiences in both of John Edwards' Americas and around the world give him a perspective none of the other candidates share. I look forward to watching him defeat his Republican opponent next year.