Two Years Later, ABC News No More Economically Developed

Some students (we're all students of life, I'd hope) are tougher cases than others.  It's been more than two years since my last post and David Muir and team at ABC News continue bravely reporting on the prosperity created by shrinking the size of our economic world (and helping get this message to those least equipped to question it).  They even had the breathtaking vapidity to travel to Mexico and promote "Made in America"--no mention of why Mexicans should root for "Made in America" rather than, I don't know, "Made in Mexico."  In tonight's edition, one can even hear a faint paean to inefficiency when Mr. Muir concludes his piece (about Winnebagos made in Iowa) with:

"...And a number we love: for every one of those Winnebagos, it takes on average 165 of those dedicated workers to get it on the road..."

My question about this is: what is it about that number that David Muir and his colleagues so adore?  Presumably, it's not that it's small.  Would it be a bad thing, then, if through innovation that number were trimmed to 150?  125?  100?  What if the very same Winnebago could be made in the same amount of time, at no greater (and probably lower) cost, by just 50 dedicated Hawkeye State workers--perhaps 50 Jack Rebneys?  Would that be a net positive for the company?  Iowa?  The country?  Humanity?  Would Diane chime in about what "great news" such ingenuity is?

Forgive me if I find an appreciation of the benefits of doing more with less to be inconsistent with the tenor of the reporting coming out of ABC America World News.  Would that it were "great news" issuing from the dedicated workers at "Made in America."  I hope it doesn't take 165 of them to stitch that segment together.

Think Locally, Demonize Extradimensionally

It's not entirely surprising that somebody who wrote a book titled Free Trade Doesn't Work is now claiming that people who think free trade does work are anti-American.  But, think about it for longer than it takes to read a Tweet and any sense to it evaporates.  Why suggest that somebody is anti-American just because they disagree with you about trade policy?  Isn't that more about means than ends?  It doesn't matter what they think is the best policy, says Fletcher (when questioned), because "the bad guys" have already admitted to having freedom as their one and only value and that means they can't prefer American prosperity over prosperity abroad.  Never having met anyone with fewer than two values, I found this to be a new and exotic argument.  See my dissection of this noxious subspecies in the comments section here (look for "voxpolitico").

Default Folklore

If you have a nose for political economy, hold it. The murky doubt swirling around the Great Bailout is congealing into a hasty pudding of conventional wisdom--at least for the boosters of TB2F (Too Big To Fail), TARP, Inflationism, Do Somethingism, and etc. And, as long as nobody on the other side of that strategic, shrapnel-filled, yet strangely silent bluff bothers to lay out a rigorous, up-to-date refutation, those Liquidity Trappist Monks can scrawl the official history of the Great Obsession of '08 unhindered for the unwashed.

The apparent shortage of focused 2010 exposés by free market scholars on the multifarious costs and suspect benefits of TARP has been nagging at me for weeks--ever since the TARPorrists began crowing over reports that the shape-shifting program is going to end up costing little more than a used biography of John Kenneth Galbraith. But, more on this later.

A colleague of mine recently asserted that, at the height of the Paternalistic Panic of '08 (the Patroniziclysm?), while some experts may have opposed TARP, even they agreed we would go over a cliff without it. I decided to do some digging on that one. Here are some arguments made at the time. You may judge whether my TARP-defending friend is correct:

• At 5:50 here Peter Schiff says what he thinks "no bailout" would mean.

• Here's Cato's Dan Mitchell defending us from Stephen Moore.

• And here's a nearly admirable piece by Geoff Colvin.

• Finally, there was this piece by Steve Chapman in the reason. Excerpts:

George Kaufman, a finance professor at Loyola University Chicago, is skeptical... He notes that aside from inter-bank lending, the credit markets were functioning tolerably well at the height of the crisis. Rates on 30-year mortgages actually dropped last week.

...A group of 122 economists, including at least two Nobel laureates, signed a letter this week summarizing the danger: "If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted."

(Here's that letter.)

(TARP wasn't even used for what it was sold as. So, it's not surprising if its consequences don't match predictions.)

With so many weaknesses in the rationale for gigantic governmental rescues of private enterprise, one might anticipate that true defenders of free economies (not mere upside allies) would produce a glut of full-throated criticism of what TARP began and ended as. But, and I hope this is due to my own shabby job of searching, I have so far found few articles that qualify.  If you know of any, please post a link in the comments [if comments are disabled, send me a Tweet].

12/20/10 UPDATE: Forgot something.  See my own 9/29/08 post here.  It quoted this very interesting 9/26/08 WaPo article, which begins:

Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets.

The industry is resilient despite the struggles of some members. Washington Mutual, a troubled Seattle savings and loan that was among the nation's largest mortgage lenders, yesterday was seized by the government and sold to J.P. Morgan Chase.

At the same time, many smaller banks said they were actually benefiting from the problems on Wall Street. Deposits are flowing in as customers flee riskier investments, and well-qualified borrowers are lining up for loans.

Ed vs. Claude Frédéric Bastiat

It can be only a pleasant dream, I guess, but wouldn't it be wonderful if Frederic Bastiat could travel 160 or so years forward in time, get a plane ticket to the U.S. and be a guest on The Ed Show (MSNBC) or on a similar forum where cheap labor is still seen as a terrible threat?

Ed: "Big business addiction to cheap labor, in my opinion, is un-American. They have no sense of economic patriotism any more and it seems to me that the U.S. Chamber of Commerce wants to protect American [sic] jobs in India and doesn't give a damn about jobs in Indiana."

Bastiat: "If man were a solitary animal, if he worked solely for himself, if he consumed directly the fruits of his labor—in short, if he did not engage in exchange—the theory of scarcity could never have been introduced into the world. It would be all too evident, in that case, that abundance would be advantageous for him, whatever its source, whether he owed it to his industriousness, to the ingenious tools and powerful machines that he had invented, to the fertility of the soil, to the liberality of Nature, ox even to a mysterious invasion of goods that the tide had carried from abroad and left on the shore. No solitary man would ever conclude that, in order to make sure that his own labor had something to occupy it, he should break the tools that save him labor, neutralize the fertility of the soil, or return to the sea the goods it may have brought him. He would easily understand that labor is not an end in itself, but a means, and that it would be absurd to reject the end for fear of doing injury to the means...But exchange hampers our view of so simple a truth." [Bold added.]

Import more of Frenchman Bastiat's economic wisdom for $0/hour here.

And the gas pedal is the main engine of the automobile

"Consumer spending, the main engine of the U.S. economy..."

ABC World News, 7/31/2009

Accidental Economic Editorializing

Some opinions are so ingrained in a subculture that that subculture is not even aware that they are not facts, but opinions. There are few if any more certain indicators of being out of touch with the intellectual climate than to not be aware that some visible and accomplished members of the population not only do not share this assumption of facthood, but are actually demonstrating superior situational awareness in contradicting it than are proponents of said opinions in espousing it.

That is the best I can do right now to summarize my thoughts a few hours after watching an astonishing episode of ABC's World News Tonight (12/16/08). The lead report, of course, begins with coverage of the Federal Reserve's historic interest rate action. The opinion-as-fact comes when the report segues to consumer credit:

"But, the economy won't improve until interest rates fall for consumers as well."

But, this is an opinion, not an established fact. Evidence here, here, here and heck, even here.

Wait, what?

Are we really going to add to our $9,200,000,000,000 national debt to send checks to every couple earning less than $174,000, etc.!? It's looking that way, sadly. What's next, self-esteem classes for supermodels? More cold water here.