Tuesday, June 3, 2008

Barone's Economic Delusion in today's Washington Times

In his column in today's Washington Times, Economic Reality Check, Michael Barone cites many trees but misses the forest. He points out that the economy is not suffering from much unemployment (true), nor is there much inflation (true). Nor is the economy shrinking (true). He does point out that the growth rate is mighty slow, but he doesn't stop to analyze why. His conclusion, Senator Obama's "protectionism" would not help the United States economy!

What he misses is the reason why US growth is so slow, despite the lack of unemployment. It is slow because businesses have not been investing in American production. They have not been investing because they know that if they do, the mercantilist countries that control our level of trade deficits through currency and other trade manipulations will simply drive them out of business. The key to fixing the problem is for the United States to insist on balanced trade.

By the way, he is wrong when he calls Obama a protectionist. Obama would not likely do anything more to balance trade than Senator McCain. The main reason why Senator Clinton was solidly defeating Obama throughout the midwest was because the manufacturing voters detected a phony.

As things currently stand, the Democrats will gain a huge victory in Congress of 1932 proportions as a result of delusional Republican economics, as exemplified by Barone's column. But the Presidential race is completely up in the air. Ohio, Michigan, and the nation will go to the Presidential candidate who persuades voters that he will do the most to balance trade.


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