g m g D e s i g n . c o m

Thomas Sowell provides a good critique of gov’t meddling in the economy. His critique suggests that the gov’t is largely responsible for both the subprime mortgage crisis in this country and is partially responsible for the water shortage in California (seriously, read his argument on that).

When I read Sowell’s editorials, I tend to get the feeling that he’s so fixated on economic libertarianism that he might be missing the total picture. Nonetheless, as a Milton Friedman capitalist, I like Sowell’s line of thinking and, personally speaking, I tend to sympathize w/ libertarians (for me, this translates to, “I agree w/ libertarians on economic issues but due to their often-whacky positions on other issues, they’re probably not electable on a national scale”). Gov’t meddling in the economy for political gain to ease the burden on the downtrodden tends to just make things worse (though, in non-transparent ways which don’t necessarily translate to a commensurate political backlash.

Lastly, both Dems & Repubs make liberal use of meddling techniques–from subsidies to protectionist mechanisms. This isn’t specific to a party, making it–conveniently–a “bi-partisan” problem that politicians have.

Here’s an always-interesting article by Thomas Barnett regarding America & its relatively recent disinclination to expand. Surmising that this unfortunate trend can’t possibly last, he makes educated guesses as to what the next 5 American states will be.

Fascinating stuff from the foremost social/economic/political visionary of our time.

Excellent blog by the always-informative Thomas Barnett regarding the twin acts of stupidity, one by the Dem-controlled Congress, the other by the White House. The criticism is sound: the Dems look backward and bring up a controversial topic that insults the Turks. The White House compounds that strategic stupidity & ticks off the Chinese gov (the potential powerful ally of the future; as in, in a future administration & Congress).

Title of blog entry says it all: “Unsatisfied with angering Turks just when we need them most on Iraq, U.S. now does same with China just when we need them most on Iran and North Korea.”

Bjorne Lomborg isn’t pleased w/ the fact that Al Gore won (along with a UN panel) the Nobel Peace Prize. Some key excerpts:

Gore has helped the world to worry. Unfortunately, our attention is diverted from where it matters. Climate change is not the only problem facing the globe.

Gore concentrates on his call for world leaders to cut CO2 emissions, yet there are other policies that would do much more for the planet. Over the coming century, developing nations will be increasingly dependent on food imports from developed countries. This is not primarily a result of global warming, but a consequence of more people and less arable land in the developing world.

The number of hungry people depends much less on climate than on demographics and income. Extremely expensive cuts in carbon emissions could mean more malnourished people. If our goal is to fight malnutrition, policies like getting nutrients to those who need them are 5,000 times more effective at saving lives than spending billions of dollars cutting carbon emissions.

Likewise, global warming will probably slightly increase malaria, but CO2 reductions will be far less effective at fighting this disease than mosquito nets and medication, which can cheaply save 850,000 lives every year. By contrast, the expensive Kyoto Protocol will prevent just 1,400 deaths from malaria each year.

[...]

Gore has an unshakable faith that climate change is the world’s biggest challenge. To be fair, he deserves some recognition for his resolute passion. However, the contrast between the Nobel winners could not be sharper. The IPCC engages in meticulous research where facts rule over everything else. Gore has a different approach.

Excellent view point, in my opinion. Gore has served himself well; but humanity was ill-served by his entertaining documentary.

But we should be concerned about global warming, right? Yes, we should. Global warming is happening, due in part to human consumption and waste (carbon emissions that trap heat in the atmosphere). Gore is right that we need to “do something”; but our approach should be strategic and far-sighted. Radical environmentalism does more harm than good.

Good post by global strategist Thomas Barnett on why we don’t need to worry about Russia in the long-term.

If you’re like most “experts” in the media and think Iran is our enemy, here’s an NY Times piece on Iranian student protesters (one of numerous such articles that I’ve come across in the past few years). In a country where most of the population is under 30 and most people under 30 despise their theocratic-authoritarian rulers, the implication is that the next generation of leadership in Iran is potentially very pro-American–if, that is, we don’t screw things up by bombing Iran or giving the go-ahead for Israel to bomb.

Wait it out & the Iranian people themselves will do the leg-work for us in that country. Imagine that. A huge, influential country in a region where we badly need more allies (real allies, not absurd pseudo-allies like the Saudis).

Foreign Policy magazine’s (incredibly insightful) blog site has a post that suggests the following: TV will lead to reform in the insular (and very screwed up) Kingdom of Saudia Arabia. Excerpt:

Now, a similar “TV effect” could be occurring in Saudi Arabia, the only country where women aren’t allowed to drive cars. Women’s right to drive has now become a growing topic of debate, and Saudi women are saying that this debate stems in part from what women see on satellite TV and read on the Internet.

Indeed, TV and the ‘Net are challenging the harsh and backward ideas in the Kingdom. This sort of “change via outside connectivity” is the only real long-term strategy for dealing with terrorist ideology.

Tom Friedman makes a good point about what our post-9/11 mind-set should be, but isn’t. Last (spoiler) paragraph:

We can’t afford to keep being this stupid! We have got to get our groove back. We need a president who will unite us around a common purpose, not a common enemy. Al Qaeda is about 9/11. We are about 9/12, we are about the Fourth of July — which is why I hope that anyone who runs on the 9/11 platform gets trounced.

I guess Tom’s not a big Rudolph Giuliani fan. Anyway, he makes a good point that I’d sum up as:

Short term goal: defeat bad int’l actors and their supporting networks (yes, this involves hunting them down & killing them). The long term goal: build bridges (metaphorically) that advance globalization & global peace in a sustainable fashion more than any “war on terror” slogan could possibly hope for. The first is the necessary, realist doctrine. The second is the long-term vision that any future US leader should have to be worthy of holding office.

I doubt most people agree that unionism is good for aggregate economic growth, but is unionism nonetheless for the “greater good” of society? A couple weeks back, workers at GM went on strike due to a failure of GM and the UAW to agree on benefits & potential layoffs. That crisis was settled, but it begs the question: what is the future of unionism in America?

There was an interesting and pretty well-balanced article in the Financial Times regarding unionism. Key quote:

Weak unions make for flexibility and rapid growth in productivity, the engines of US economic pre-eminence. To see what strong unions do for industrial competitiveness, look at GM. But weak unions also squeeze wages at the bottom, worsen inequality and create economic insecurity, the issues that most preoccupy the country and its politicians.

Further, Clive Crook points out that while unions can be destructive (incl self-destructive), this need not be the case:

Unions and works councils in Germany and Japan have not impoverished those countries. Unions do raise wages, sympathetic economists point out. When they do, it is usually in industries where product markets are not very competitive and there is a rent for managers to share with labour. When product markets are competitive, there is no rent to divide: the effect of unions on wages is then typically smaller and no economic harm is done.

Further:

As a rule, though, unions are bad at accommodating disruptive change – the very thing the US does best. The weakness of the country’s unions is surely no coincidence: they are weak because the economy is dynamic, and vice versa. American unionism has modernised lately, but much of what remains is still political and adversarial. Its body language says, we are out to get the bosses. It seeks a voice not just for workers in the office or factory, but for labour in the aggregate. Its agenda is anti-competitive and stridently protectionist, and consequently anti-growth.

My thoughts on this? I think unions are economically damaging in advanced economies like that of the US. The benefits afforded by unionism can be found via less destructive means and, furthermore, are outweighed by the detriments of unionism. Note that the same is not true in all economies, like that of developing nations, whose worker protection laws are not analogous to ours. Also note that while I give unionism credit in some respects, I think that unionism is detrimental in the aggregate, including for the supposed beneficiaries (i.e., an employee who is laid off due to an unsustainable system is not better off than, say, an employee at Toyota, nor are, say, GM employees more “protected” in such an unsustainable model).

Lastly, unionism runs contrary to globalization (since unionism is protectionist in nature). Since I support globalization, it is very difficult to support unionist constructs.