Buchanan: GOP should embrace xenophobia, not economics
Pat Buchanan on Townhall.com calls for an automakers bailout based on xenophobia and on repeating the mistakes of the past, rather than sound economic policy.
Is the Republican Party so fanatic in its ideology that, rather than sin against a commandment of Milton Friedman, it is willing to see America written forever out of this fantastic market, let millions of jobs vanish and write off the industrial Midwest?
And, unlike Mitsubishi, General Motors didn’t bomb Pearl Harbor.
The use of “xenophobia” here is akin to the misapplication of the word “homophobia” by homosexuals in their debate with those who oppose same-sex marriage, et al. One can support tariffs or bailouts without being a xenophobe. That being said, I am against the bailout; however Buchanan raises two interesting realities about the GOP’s view of the current role of government in the economy and the fairness of trade:
1) How does the GOP go from approving a $700 billion bailout for bankers to drawing a line in the sand over a $14 billion bailout for the automakers? Can you say “erratic”?
2) Yes, the “foreign” plants operate more efficiently, but no one seems to mention they are getting their fair share of taxpayer subsidies to be here. In fact I didn’t know that, and it angers me. If we shut down the bailout for the Big Three then we ought to cease the subsidies to foreign competitors, too.
One more thought on “free trade.” Adam Smith offered free trade as ONE leg in a stool that presupposed many other legs being in place, i.e. equalized labor and wage laws and regulatory environment. To take all the legs out from under the stool but one and assume that one leg (free trade) will hold up the stool is foolhardy.
All of these are weak points — Buchanan is attempting to justify a bad policy by using other bad policies as a historical reference.
1) Some argued that the financial sector was different. We disagreed, but regardless, there has to be a line drawn in the sand somewhere. The financial bailout was a bad policy, but even those who think it was good agree than endless bailouts are a bad policy. Two wrongs don’t make a right.
2) “Domestic” manufacturers also get subsidies/incentives from state and local governments when building plants and such — as we have shown these are poor economic policy. So stop doing it. Don’t give GM/UAW more money.
You are not entirely correct about equalized wages and regulations. Free Trade is good for our economy regardless of the wage laws in Mexico and China. And as Don Boudreaux points out, that logic would imply Pennsylvania would be better off with high tariffs on products from other states – right-to-work states, states with lower taxes, and states with lower minimum wage laws, which is of course preposterous.
Yes, our wage laws, tax climate, and regulations hurt our economic competitiveness (both PA and the US), so change them. This does not justify protectionism, which make us all poorer.