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Hart aber herzlich ;-) / Bush's Latest Blarney - Artikel mises.org

verfasst von - Elli -, 04.09.2003, 18:45

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Bush's Latest Blarney
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by
Sean Corrigan

[Posted
September 04, 2003]

<blockquote dir="ltr" style="MARGIN-RIGHT: 0px">
"One
way to make sure that the manufacturing sector does well is to send a
message overseas, [to] say, look, we expect there to be a fair playing field
when it comes to trade. See, we in <ST1:COUNTRY-REGION>
<ST1:PLACE>
America
believe</ST1:PLACE>
</ST1:COUNTRY-REGION>
 we can
compete with anybody, just so long as the rules are fair, and we intend to
keep the rules fair."

Dubya-Dubya-III
in <ST1:PLACE>
<ST1:CITY>
Richfield</ST1:CITY>
, <ST1:STATE>
Ohio</ST1:STATE>
</ST1:PLACE>

[/i]
<img alt src="http://www.mises.org/images3/bushlabor.jpg" align="right" border="0" width="209" height="164">In
a shameless piece of propagandist posing, if not quite one which plumbed the
depths of his Mav'n'Goose carrier landing, God's Anointed Defender of
Civilization milked a crowd (Oh, all right! After all those job losses, a
gaggle) of midwest manufacturing workers. He went so far as to dress in a
union cap and bomber (oops!) jacket.

With
Treasury Secretary John Snow simultaneously raising
hirsute eyebrows at his Oriental hosts over the value of their currencies,
we should see all this as part of the same weary old Protectionism to which
politically astute, but economically illiterate and morally bankrupt office
holders usually stoop when things get tough at home.

The
same whining tone has its counterpart in a bleating Washington Post
story which bemoans the fact that—for now at least—governments elsewhere
in the world are unwilling to fleece their taxpayers, or dragoon their sons
into subsidizing or otherwise reinforcing the rapidly deteriorating situation
in post-Conquest Iraq.

Well,
'Quelle surprise!' as those dastardly French enemies of freedom might
say.     

Dubya's
bright idea to appoint another unelected bureaucratic meddler at the
Department of Commerce with specific responsibility for manufacturing cannot
otherwise possibly portend anything good. His or her sole mandate will be to
rustle up votes by blaming all those shifty foreigners who have had the
temerity to satisfy American consumers' needs at a lower price than any one
else has cared to. These foreigners have then compounded their
crimes by lending the government the money to fuel its war fleets and its
citizens the cash necessary to keep their housing bubble going, into the
bargain.

The
implications of this newly heightened emphasis could be far-reaching.

Know
that there is nothing more inimical to economic recovery—as well as to
personal liberty—than the doctrine encapsulated by Bush in the words: "We
have a responsibility that when somebody hurts, government has got to move."

A
fine sentiment, no doubt, but what this translates to in practice is a policy
of taking from those more successful in the ongoing struggle to adjust to the
new realities of post-Bubble America and redistributing the spoils among the
losers, with an ear always on where this commandeered largesse will make the
most political noise.

Whatever
short-term palliative effects this might bring about, you can be sure that, in
the long run, it will be detrimental both to personal enterprise and to
private capital.

Perhaps
more immediately, like the spendthrift Medieval kings who invariably blamed
Venetian bankers or Jewish money-lenders for woes very much of their own
making, this should heighten international concerns that America's biggest
creditors do not get a vote in America's elections.

Given
that cumulative flows into the US just since the Bubble began in 1995 have
come to close to $4.1 trillion, fully 68% of the $6 trillion remitted to the
Imperium in the past 50 years (a sum whose current market value is estimated
at around $7.7 trillion), this might give pause for thought in finance
ministries and investment committees around the world.

At
its simplest, we have the spectacle of a US Treasury Secretary trooping around
the <ST1:PLACE>
Far East</ST1:PLACE>
, effectively
telling everyone he needs their acquiescence in a write-down of their
painstakingly-acquired foreign assets simply because the Global Hegemon is
unable to compete with them commercially in any other way.

At
its most damaging, we face the ongoing prospect of barriers to trade being
erected by the world's biggest market—but also by the world's biggest debtor.

Given
that international trade—not to mention international money flows—have
expanded far beyond any underlying increase in output over the course of the
past decade, and given further that a fragile global economy needs less,
rather than more, uncertainty to motivate investors and businessmen to take on
risk anew, this could easily snowball.

With
international relations already highly strained—thanks largely, if not
wholly, to the unwontedly belligerent approach generally adopted by the
current US Administration in its dealings with others—the clear peril here
is that a series of escalating trade disputes impairs the ability of flows of
goods to discharge the existing financial burdens of debt service and
repayment as they come due.

If
international credit does become restricted in this manner, it will impose a
further strain on financial sector balance sheets, already, in far too many
cases, in a parlous condition, thanks to the fallout from the US-led Bubble.

It
should be recognized that exactly this process was a key feature in the
appalling series of policy mistakes which turned the '29 Crash into the Great
Depression.

What
it also does is raise the prospect that an <ST1:COUNTRY-REGION>
<ST1:PLACE>
America</ST1:PLACE>
</ST1:COUNTRY-REGION>
 living
wildly beyond its means at all levels of society will get rather more of an
adjustment in its currency than it bargained for.

Yes,
many of us in the West—not just in the US—have been living too high on the
hog on newly-printed money. We will all either have to perform heroics of
productive endeavour to restore the balance, or face the grim reckoning that
we are not as wealthy as we currently believe. A drastic adjustment in
currency parities may well be a part of that.

However,
to the extent this is sudden and if, as will sadly be the case, it is not
matched by greater thrift at home, this will also concentrate monetary
inflation onto import prices (even as our attempt to offset this with our own
exports may face greater retaliatory hurdles abroad). It will further
destabilize an already crumbling bond market, with foreign repatriation adding
to the wounds inflicted by the Fed's own foolishness.

It
is hard to overstate the risks which will attach to such a development. That
inveterate political trimmer and wannabe Ben Strong-beater, Alan Greenspan, is
highly unlikely to do what should be done in that circumstance and administer
the necessary purgative to expunge the poison as rapidly as possible. Rather,
he will run true to form, continuing to fight the market by expanding credit
yet further, and we would thus face the very real danger of him triggering a
devastating inflationary runaway. Thus are monetary policy and trade policy
bound up with each other, as are all governmental attacks on freedom and
prosperity.


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Sean Corrigan is a principal of  www.capital-insight.com,
a London-based economic consultancy. He is also comanager of the Bermuda-based 
Edelweiss
Fund. See his Mises.org 
Articles
Archive, or send him 
MAIL.
See also the  Study
Guide on Business Cycles.

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gesamter Thread:

Hart aber herzlich ;-) / Bush's Latest Blarney - Artikel mises.org - - Elli -, 04.09.2003, 18:45
- Re: Bush's Latest Blarney - Das hat Sean Corrigan gestern etwas ausführlicher... - Firmian, 04.09.2003, 19:22