Wednesday, June 22, 2011

Technology Isn't The Problem

Russell Roberts, professor of economics at George Mason University and research fellow at Stanford's Hoover Institution, writes a strong critique in the Wall Street Journal of Obama's foolish attacks on technology.  He quotes Obama's comments blaming technological change as a structural issue and cause of job losses.
There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers.... You see it when you go to a bank and you use an ATM, you don't go to a bank teller, or you go to the airport and you're using a kiosk instead of checking in at the gate.

This argument, as Roberts successfully explains, it complete bunk.  Productivity increases are the backbone of a successfully growing economy.  Such increases free up resources to be used in new industries, thus raising the standard of living for everyone.  Roberts argues that,
Somehow, new jobs get created to replace the old ones. Despite losing millions of jobs to technology and to trade, even in a recession we have more total jobs than we did when the steel and auto and telephone and food industries had a lot more workers and a lot fewer machines.

Roberts' economic argument is sound and history bares out his logic.  Tellingly, despite years of technological progress, unemployment rates have fluctuated around a band of 2.5% to a little over 10%.  If Obama's assertion that technology causes job losses and hurts the economy is correct, we would arguably see much greater unemployment, particularly as our history progressed.  After all, millions have left the agricultural industry, for instance, over the US's relatively short history.

The attempt to link technology growth and jobs loss is not only poor economics but down-right bad for the future of our country.  We already see this problem rampant in the discussion over free trade.  By confusing the masses, these arguments only help special interests gain from the loss of the country.  Technology, like trade, helps everyone in the long-run.  While some may be hurt in the short-run transition, there are far better and more efficient ways to help them than by criticizing or tampering with technological growth.

Obama and other politicians (this happens all too frequently on both sides of the aisle) should think before they whip out the rhetoric - it only serves to distract, "miseducate", and ultimately drive our country down the wrong policy paths.

Tuesday, June 21, 2011

Huntsman Has Some Potential

Former Utah governor and ambassador to China, Jon Huntsman has formally announced his candidacy for president.  He joins a thick field in the GOP primaries, most directly competing with Mitt Romney and Tim Pawlenty for the moderate and establishment wing of the party.

However, Politico seems to think there is little room for Huntsman in the mix, although conceding that
The former governor’s aim is to appeal to independents and moderate Republican voters that the rest of the field has so far largely ignored. While Huntsman’s opening video calls him the “ultimate conservative,” he has taken moderate positions on the environment, immigration and supports same sex civil unions....
Depending on how Huntsman's campaign shakes out, these moderate positions may very well be the ticket the GOP needs to successfully court independent voters and give Obama a much needed one-way ticket back to Chicago.

Nevertheless, some on the right have already ripped into Huntsman for his role as Obama's ambassador to China, claiming that by working with the president he has become tarnished goods.  Rush Limbaugh cries that "I also know that Reagan never served in Jimmy Carter's regime or administration.  Jon Huntsman did serve in Obama's; he was ambassador to the ChiComs."

Fortunately this argument is completely backwards.  What better ammunition against the current administration than someone who served in it and left.  Not only does Huntsman have more (and highly relevant) foreign policy experience than Obama did when elected, but he has the endorsement of his (potential) opponent. Obama would be ill-at-ease to criticize the foreign policy of a man he appointed to lead the relationship with one of the world's most important nations.  Just imagine Huntsman's potential response to Obama's foreign policy criticisms during the first presidential debate!

"Yes, Mr. President, I believe it was you that expressed confidence in my ability to manage foreign affairs when you chose me as ambassador to China!"

Wednesday, June 1, 2011

Time to Fix the Economy: The Debt Limit and Spending

Yesterday's vote on raising the debt limit was, as expected, voted down by the vast majority of the House of Representatives.  While Democrats, including Minority Whip Steny Hoyer (who voted against the bill), are hurling accusations of political theatre, the rejection of the "clean debt limit vote" was appropriate.  The message sent is unequivocal:  America cannot continue to spend beyond its means.  Cuts are needed and any increased ability to spend must be countered by reduced expenditures.

In a sense the Democrats are right.  This vote was not really about the debt limit.  Speaker of the House John Boehner (R-OH), said it clearly “It’s true that allowing America to default would be irresponsible....”  However, default is certainly not an issue, at least at this point.  Instead, the vote was much more about changing the prevailing economic discourse in this country, where for far too long it has been easy to spend beyond our means and push off the consequences.  It is necessary and laudable for Congress to stand its ground and show that there really is no such thing (anymore) as "easy money".

The debt limit may ultimately need to be raised (a default would be catastrophic), but not without meaningful reassessment of the government's fiscal condition.  We are, as a nation, spending far too much.  Former Republican governor of Utah and possible presidential candidate, John Huntsman eloquently articulated the need to reevaluate our economic position, in what can fairly be described as a campaign speech in today's Wall Street Journal.

Amongst other points, Huntsman argued that the debt level must be cut while difficult choices need to be made regarding Medicare, Social Security and other government expenditures including agricultural subsidies.  Even Sarah Palin has jumped in the fray, smartly calling for an end to all energy subsidies.

Boehner is taking this message directly to the president, in a meeting scheduled for today, where he and fellow GOP congressmen aim to push Obama to make deep spending cuts in order salvage the US's fiscal sanity.  Backed by a number of leading economists, Boehner argues that "“To help our economy grow and create jobs, any debt limit increase needs to be met with even larger spending cuts.”

The GOP and those 82 House Democrats that voted against raising the debt limit are right to stand firm.  America must realize that our situation is perilous and that it is time to adjust our system before it becomes too difficult.  Huntsman summed up the sentiment nicely "Some argue for half-measures, or for delaying the inevitable because the politics are too hard. But delay is a decision to let America decline. The longer we wait, the harder our choices become."