An Exercise in Liberal American Economic Thought

Hop in the Captain's F-22 fighter jet and let's go for a ride.  We're going to do an exercise in liberal economic thought.  Specifically, we are going to follow the typical American liberal's economic model or beliefs to their logical conclusion or end, and in doing so learn a lesson I think all people in the political spectrum can appreciate.

Without taking too many liberties (and simplifying things down a lot) the average non-economist American liberal is more prone to believe in a watered down Keynesian version of economics that goes something like this -

"Productivity doesn't matter, activity matters - any activity.  As long as there is some kind of economic activity, specifically transactions and things are 'movin' around' inevitably the economy will grow.  If there isn't enough sloshing around in the economic primordial goo or "Great Liberal Economic Oort Cloud," government can come in and with ANY kind of stimulus, shake things up a bit, and boom, we're magically back to economic growth."

Again, I'm not saying I agree with this, but I think we can all agree this is more or less what the average, non-economist American liberal has in terms of an economic model or understanding of how the economy works (and intellectually honest liberals will admit this).  Besides, you don't have to take my word for it.  All you have to do is look at statements made by Barack Obama and Nancy Pelosi.  Obama claims he'll just "create" 600,000 more teaching jobs, 200,000 in clean energy, etc. etc., with no plans or details on how, just mix it up.  And evidencing to the "activity over productivity" aspect of this liberal model, Nancy Pelosi (and I believe Joe Biden) have said unemployment checks help stimulate the economy.  So even though this simplified, genuinely dumbed down version of an economic model sounds insulting, that really is how most liberals believe an economy operates.

Now since productivity ultimately doesn't matter in the liberal's economic model, by logic (and tell me if I'm wrong here) this means it doesn't matter what we produce.  Under a free market, real world economic model, it is the demands and desires of the customer that drives production.  But under this liberal economic mindset we just need the absolute value of "ACTIVITY."  And since "any activity" is "good activity," said activity is NOT dictated by the demands and desires of the people.

The question is, who or what determines then is going to be this magical Keynesian "activity?"

Answer - the government.

However, there's more to it than simply "government."  Specifically, we have to ask ourselves how will agents of the government come around to determining what activity to engage in?

It's simple.  They'll choose something that's easy and fun.

When given the choice of "what to produce" (because, again, according to this model it doesn't matter WHAT we produce, long as we're doing something) do you think liberals, government bureaucrats, and public sector union members are going champion making hard-to-produce items that require math, technology, engineer, studying, rigor, research and sweat?
Hell no. They're going to choose something easy.

Ergo, what do liberals ALWAYS ALWAYS ALWAYS ALWAYS ALWAYS champion as their "path" or "route" to economic growth?  There are five that come to mind.
1.  Health care (not nursing, doctors or pharmaceuticals, but spending on health programs and the like)
2.  Education
3.  "Green Anything"
4.  Activism/Non-Profit
5.  Welfare

"Industries" or "jobs" that require no skill and no effort, and are PURELY there, in an economically ass-backwards way, to serve the worker and not the customer.  And understand the logic here.  If it isn't going to be up to the customer as to what is produced, then the choice of what to produce defaults to the employee/producer (this goes along way in explaining why so many idiot children major in the liberal arts).

I'd like to say this is the only reason these type of industries are championed by the government - that they're "fun" and "easy."  But sadly, logic also tells us there are other reasons liberals champion such "industries," namely politics.

If you look at the list above, you'll realize championing such industries does two things beyond the supposed Keynesian benefits.  One, it benefits the politician who's advocating spending on these things because they're all "noble and good."  He/she can claim they're "investing in our future" when in reality they're merely mortgaging it and pissing it away.  Doesn't matter than these things are SPENDING with no positive rate of return (which  if there was a return would make it a GENUINE investment), Americans are too stupid to know the difference between an investment and spending.  The politician benefits from this ignorance.  Two, it inoculates the politician championing these causes from his/her rivals because they can hide behind the nobility of these causes.

Are you against education?  You hate children.
Are you against government spending on green programs?  You hate the environment.
Are you against welfare?  You hate poor people, women, children and minorities.

In the end you have what I believe to be the most brilliant, pinnacle achievement in all of political history - a political organism or entity, that produces nothing, gets it financing from other sectors of the economy, to employ its own political agents in (largely) make-work jobs, while at the same time commandeering and hiding behind various noble social aims (help the poor, help the children) to rationalize its parasitic nature, ALL WHILE GETTING THE BLESSING FROM ITS HOST IN THE FORM OF BEING ELECTED IN TIME AND TIME AGAIN.  It's brilliant because people willingly vote this in!

Now I know, I know.  If you're like me your blood pressure is rising because you too are also gifted with Super Awesome Economic Genius (TM) and can plainly see none of this leads to economic growth.  But remember our original goal here.  This is an exercise in liberal economic thought to follow it to its logical end, not a political analysis.  So let's have ourselves a shot of Rumpie, set politics aside and return to economics.

Now, since it doesn't matter what we produce, just as long as we're doing something and mixing it up in the economic goo, according to the average American liberal, our GDP would ideally look something like this:

(I threw in "Whole Foods" "Coffee Shops" and "Unicorns" to account for the sliver of private sector production liberals typically accept as "permissible private sector activity")

Of course we know this isn't a viable or sustainable economy.  Nobody is producing the food.  Nobody is producing the power.  Nobody is producing the doctors.  Nobody is producing the Priuses.  A lot of things are missing for a sustainable economy.  So if this economic model isn't sustainable, how can anybody (liberal or conservative) support this?  Very simple young aspiring economists.

International trade.

You see, according to this liberal economic model, thank god we have the Chinese, Mexicans and Indians, because while we're

• educating our children merely for the sake of educating them, 
• spending trillions of health programs to keep people alive while expecting them to do nothing in return, 
• going to the local OWS camp to protest reality, 
• majoring in English though we speak it, 
• and blowing $500 million on the the likes of Solyndra, 

those suckers..errr...I mean "charitable foreign folk" are slaving away making all the stuff we inevitably really do want to consume.  Things like, oh, I don't know, FOOD and ummm...APPLE PRODUCTS and um...CELL PHONES and umm...COMPUTERS and umm....CARS and um...well, frankly, anything that requires a skill liberal-art majoring Americans are too damn lazy to learn and do themselves. 

Now, in the average, non-economist liberal's mind, problem solved!  We produce what we want to make while foreign suckers...errr...our "foreign friends" produce the stuff we actually want.  And as a bonus, our foreign friends will even loan us the money to pay for all this stuff.

It is here, I believe I have fully flushed out and thought through the average American liberal's economic model to its logical end in their minds.  As far as they're concerned, this is a complete economic model.  They not only get to do what they want, they get to consume what they want, warm kumbayaa fuzzies for everyone.

The problem is it doesn't stop there.

Just because the average non-economist American liberal doesn't understand international trade, debt, not to mention the difference between a billion and a trillion, doesn't mean the realities of economics won't come crashing down on this model.  Carrying it further, we obviously see some problems.

One, their entire economic system hinges on debt.  That foreign countries are going to not only perpetually make what we want while we offer them nothing in return (ie - we want electronics, how many Chinese want a book on "Women's Studies?"), they going to stop loaning us money because they're afraid we'll never pay them back.  If you were the chairman of the economic committee in China would you continue to loan money to a country that spends all of its money on people who don't produce, people who are going to die soon, and people who major in "Art History" instead of chemical engineering?  Set the nobility of welfare and social security and the chilllllldrnnnnnn aside.  China doesn't care.  They want their money back, and we, frankly, don't have the productive capacity to produce they valuable stuff to pay them back.

Second, it also assumes the dollar never collapses.  Understand what gives a currency its value.  It's not because the government SAYS it has value.  It's because people (either here or abroad) can take our dollars and buy US made goods with them.  But if the US DOESN'T MAKE ANYTHING ANYBODY WANTS WHO IS GOING TO WANT TO BUY DOLLARS???  What are they going to buy??  An "English Degree?"  50 Shades of Gray?  Are those the US-made goods we're going to make to pay back our $16 trillion debt?  If I did my math right, that's 800 billion copies of 50 Shades of Gray.  So every person on the planet needs to buy, what, roughly 133 copies of "50 Shades of Grey?"  Are you kidding me?

And finally, it is an enormous display of arrogance on our part.  I didn't realize this until I talked to a student at Macalester College in St. Paul.  I asked her what she was studying, she said, "international studies."  I asked her what she was going to do with that and she said, "Oh, well, I go work for the UN or government."  Don't you want to produce something or don't you need experience?  Why would they hire you?  "Oh, that school doesn't offer degrees in those things.  They teach us leadership and management."

I realized what I was witnessing.  A veritable child thinking she has the wisdom and experience to lead - aka - tell other people what to do, just because she went to a really overpriced and crappy school.

This led me to realize just what we are effectively "telling" the rest of the world when our kids major in "Literature" while the rest of the world's children major in math and the sciences.

"Take care of us."

And it's worse than that.  In pursuing the policies that are implied by the average, non-economist, American liberal's economic model, we are essentially dictating roles to the rest of the world.

China will be the manufacturers and workers of the world.  They'll produce our physical wares and electronics.

Mexico will be the farmers.  They will grow our food.

India will be our computer programmers and make those Chinese-made computers really fun.

Brazil and Australia will provide the raw materials so all those other countries can make the stuff we want.

And the US?  Oh, us?  we'll be the stay at home trophy wife.  We'll be the world's shopping mall.  Nothing is made here, just bought and consumed, and all those other countries will finance our spending habits.

Oh, what's what?

"What will we provide in return to all those countries slaving away making our stuff?

Why, leadership of course!

Through the UN, non-profits, Peace Corp, Ameri-Corps, consultancies, our educational institutions, and other various NGO's, we'll tell the rest of the world how they should behave and act.  You see, we're really good at it.  We have millions of 25 year old children who never worked a day in their lives, but that's OK.  They all have masters degrees in "International Studies" and "International Gay Lesbian Art Studies."  They're really smart and will tell you what to do!  You can thank us later!

Heh, I'm sure the rest of you can complete this exercise and logically figure out where it ends.