[biztech-discussion] Re: Some interesting articles from the other side

  • From: Bruce Hartford <bruceh@xxxxxxxxxxxxx>
  • To: biztech-discussion@xxxxxxxxxxxxx
  • Date: Sat, 26 Jun 2004 13:18:44 -0500

I too disagree with many of the assertions in the Sowell article.=20

1. Sowell chastises those of us who question Free Trade for being
uninterested in the facts and ignorant of the realities. He quotes "As
former House majority leader Dick Armey=97an economist by trade=97put it:
=93Demagoguery beats data in making public policy.=94

Demagoguery ? Hmmmm. When I was a kid we used to taunt "It takes one to
know one." One of the themes in many of Shakespear's plays is that the
guilty charge others of what they themselves have done. Surely that applies
to Neocons charging others with Demagoguery. Remember the myths of the
"welfare queens," "supply side" and "trickle-down" economics, "tax cuts for
the wealthy will lower the deficit," "deregulation of the power industry
will result in cheaper electricity," and so on ad infinitum.

2. Sowell says: "In reality, the number of jobs in the United States
increased by millions after NAFTA went into effect and the unemployment
rate fell to low levels not seen in years."

Here he's talking about the boom during the Clinton years. A boom that many
professional non-demogogic economists attribute to elimination of the
deficit and considerable reduction in military spending relative to total
GNP, not to "free trade." And what he omits is that most of the job
increases were in the low-paid, minimum-wage, services as those who lost
union-wage jobs in manufacturing ended up flipping burgers at MacDonalds.=20

3. Sowell says: "Siemens alone employs tens of thousands of American
workers, and Toyota has already produced its ten millionth car in the
United States." Well, not anymore. My brother worked for Siemens in Silicon
Valley until they outsourced his entire department to Accenture (a front
for Arthur Anderson) who then offshored the division to India. And while it
is true that Toyota produces cars, with one exception those cars are made
in non-union plants with significantly lower wages and benefits than in UAW

4. Sowell claims: "Free international trade produces both the benefits of
increased productivity and the adjustment problems that all other forms of
increased productivity produce=97namely, job losses in the less competitive
firms and industries."=20

I wasn't aware that the U.S. high-tech industry was "less competitive."
Quite the contrary.=20

"The typewriter industry was devastated by the rise of the computer, as the
horse and buggy industry was devastated by the rise of the automobile.
Histories of the industrial revolution lament the plight of the hand-loom
weavers when power looms were introduced."=20

All quite true. But totally irrelevant to the offshoring issue. Offshoring
is not inventing new technologies or industries, it is simply seeking the
lowest labor rate in existing industries. What was the word? "Demagoguery?"

5. Sowell states: "One of the apparently invincible fallacies of our times
is the belief that President Ronald Reagan=92s tax cuts caused the federal
budget deficits of the 1980s. In reality, the federal government collected
more tax revenue in every year of the Reagan administration than had ever
been collected in any year of any previous administration. But there is no
amount of money that Congress cannot outspend."

Well it may be true that total tax revenues increased (at a slower rate
than they would have without the tax cuts). That increase was mainly caused
by population increase and inflation. But what caused the deficit was the
combination of tax cuts plus the vast increase in military spending rammed
through by Reagon and the others who favord the tax cuts.=20

6. Sowell repeats a familiar neocon distraction: "When you know that
central planners in the Soviet Union had to set 24 million prices=97and keep
adjusting them, relative to one another, as conditions changed=97you realize
that central planning did not just happen to fail. It had no chance of
succeeding from the outset."

What does central planning have to do with offshoring? Nothing at all. It's
the economic equivilent of red-baiting, a favorite form of neocon
demagoguery. He's insinuating that any government regulation of business,
such as limiting or regulating offshoring, is the equivilent of socialist
central planning.=20


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