February 23^rd

 

Today we have a column by Patric J. Buchanan. Pat has regurgitated the ideas he presented to us a few weeks ago, on February 2^nd. His column’s title then was “There’s a Syriza in our future.” Syriza is the far left Greek political party that has managed to put a coalition together and it is now in the driver’s seat of the Greek economic wreck. I see no need to repeat my remarks about this column which appeared the same day. Pat has managed some new twists but he does repeat his horror of Congreee fast tracking the new trade bill. Fast tracking means that congress agrees to vote the bill up or down but not to ammend it. Without this agreement the bill would be held up for endless debate which is Pat’s hope. As our foremost isolationist he is sternly against foreign trade which he sees as taking American jobs…and so it does.

 

Pat quotes Teddy Roosevelt and and Wm. McKinley (1892)who were both adamantly opposed to free trade. I guess Pat thinks their remarks then, 115 years ago, are right on target today. We have lost jobs but these were mostly jobs that simply required sweat not skill and the result has been an increase in our standard of living. Much of what you buy is made abroad and if it were made here you might find you couldn’t afford it.The cost of living index has risen by 59 percent over the last twenty years, that is one hundred dollars of goods and services in 1994 would cost one hundred-fifty- nine dollars today. Now go back another twenty years before all this free trade. One-hundred dollars in 1974 would require  just over three hundred dollars in 1994. Inflation has been cut in half over the las twenty years. Pat doesn’t mention that; I doubt that Pat knows about it.

 

Our economy is based on the free enterprise system,  so we are told. This means that companies must cut their costs as well as increase their sales. Having plants in other countries can backfire as Caterpillar Tractor (CAT) has recently discovered. CAT had a locomotive plant in London Ontario, Canada. They decided that Canadian workers were making more money than they would have to pay in Indiana so they closed the Ontario plan putting  some 450 workers out of a job. They moved that facility to Indiana where they could pay about half the Canadian labor rate. The plant in Canada had achieved record profits with the workers pay as it was, no matter; moving the assembly would be even more profitable in Indiana. This was not well received in Ontario where a move gained traction to boycott all CAT products. The point here is that as foreign workers get higher wages more jobs move and some of them move back here. CAT will probably discover that there are other diesel electric locomotive manufacturers in the world and that these will be more attractive to Canadians.

 

Not all economic pronouncements from the turn of the twentieth century make much sense today..

( It is odd to see an isolationist like Buchanan quoting the expansionist Theodore Rooosevelt.)