The New Mercantilism and the New, New Deal

Vox Day mentions Ian Fletcher and the New Mercantilism:

If corporate America pretty much has to make a profit by selling goods to Americans by Americans, this means that corporate America has an intrinsic interest in the productivity of Americans and in their ability to consume. Now, productivity plus consumption is prosperity, I mean, that’s pretty much all it is, so if you have an economy that’s set up that way then corporate America pretty much wants what the rest of us want, and for decades in this country, roughly from 1940 to 1975 there was an arrangement in this country where things were set up that way. It wasn’t perfect, but there was, broadly speaking, a structural alignment between what was in the interests of big corporations in this country and what was in the interest of the average American.

No, I can’t sign on to this. No “New, New Deal.”

America is set up to systematically screw the worker because Congress (95% Democrat-controlled), “roughly from 1940 to 1975,” took more and more money from workers and sold it back to older workers, collecting their votes “in kind.” It was a neat grift, but you can’t jack the rates anymore, and I cannot and will not endorse it. (“Employer-based” “health care”: same grift, different sector.) We need to undo the damage and return Americans to a competitive position by unf–king the system.

Yes, protectionism works in some areas. Defense plants must be built in the US. US agriculture subsidies should be paid out from the Department of Defense, since they protect us from dependence on foreign foodstuffs but D.C. loves denial, so the Ag Dept does it. A small tariff on goods entering the US is probably a good idea for tracking and to stabilize trade between nations. (If your sleeve is being tugged by a Liber-tard mooing about dem ebul $21 bn in ag subsidies, remember $112 bn, 80% of DeptAg budget, goes to SNAP, the new name for food stamps.)

Vox, you’re wrong; so is Fletcher. Yes, we need massive reform, but 85-90% of these wounds are self-inflicted. The GOP has failed all reform; they do not have the ruthlessness to win, or even set up a win.

Massive Left Signalling While Admitting the Painful, anti-Left Truth

First: you are not a Liberal. You’re, at best, a semi-democratic Socialist.

Your litany of Proper Left Positions is humorous at best. Wave your little flag all you like: haven’t you noticed how a lot of the Left never cared about consistency? You oppose them on misandry, they hate you. You agree with them on the public health “option,” suddenly they love you. You are personed and unpersoned at need.

You glow with nostalgia over the Abraham Lincoln Brigade and the Spanish Civil War, but this was when principled people first began abandoning the Left over Stalinism: John Dos Passos, George Orwell, Norman Podhoretz.

PIRGIM: I canvassed for them long, long ago. And wow am I heartily ashamed of that. At least Sanders is not anti-gun (so far).

The Left abandoned the working class years ago. What you see in the upper class now is a kind of ritualism: since they can’t hunt a two-legged scapegoat or nationalize the steel and coal industry, they’ve moved onto “cultural issues.”

The word “globalization” is a lie: it is the world's nations updating their economies to a more Liberal stance. Your daddies and grandaddies had it easy: the Soviet Union and the CHICOMs kept billions of people off the labor force, while the Indians imitated Soviet Socialism and crippled their people. American wages stayed unnaturally high and, today, we have a lot of bad habits we picked up then. The bigotry of the Democratic 1944 employer tax breaks for employee “health care” punishes us to this day.

The rest of the world deserves prosperity. And America needs to rework Social Security, Big Healthcare and all the other bad habits to compete. Which we can, in spades, if we allow ourselves.

You noted the SPLC is explicitly operating “on behalf of” minorities from “noblesse oblige.” That would actually be a step up for the Left. The Ivy League is staging a hostile takeover of race issues from Afro-Americans. Nobility is not an issue here.

Unlimited Quantitative Easing

Market monetarism is Keynesianism in Monetarist drag. It is based on inflating the currency, on Quantitative Easing. And the Federal Reserve is hoping you won't notice.

Ben Bernanke just held a press conference and declared a market monetarist stance, namely growth and inflation targets. Economist Tyler Cowen called today Scott Sumner Day. Sumner is the blogger at The Money Illusion. Basically, this is Sumner's idea. (Paul Krugman is also a fan.)

So what is his idea? Nothing but endless Quantitative Easing:

Today the Fed adopted one of those three recommendations; open ended QE.

Whats changed since June? That’s pretty easy to answer; Woodford’s paper was obviously very influential, and that changed the politics on level targeting. So Woodford also deserves a lot of credit. It’s not as specific as Woodford or I would like, but it’s something. More specifically it’s a dog whistle that Bernanke hopes the markets will hear, but which he also hopes will be missed by the Tea Party.

Sumner spells it out some more:

Bernanke emphasized that monetary stimulus is not like fiscal stimulus, it actually reduces the budget deficit. That’s right.

Remember: the problem is not inflating or deflating the money supply. The dreaded Keynesian bugaboo is the awful, nasty rabbit from Monty Python's Holy Grail: the "Liquidity Trap." This is the idea that money earning no interest and being slowly eaten by inflation will never be pulled out and invested. This is, of course, completely ridiculous.

The real problem is public confidence in economic growth. As Ludwig von Mises noted in The Theory of Money and Credit, this is a monetary solution to fiscal and policy problems. Quit telling investors you hate them, quit confiscating their money, and wealth, real wealth goods and services will flow. Till then, Bernanke is not only whistling past the graveyard, he's decked out in garlic and wolfsbane.

p.s. Market monetarism from Wikipedia: "In contrast to traditional monetarists, market monetarists do not believe monetary aggregates or commodity prices such as gold are the optimal guide to intervention. Market monetarists also reject the New Keynesian focus on interest rates as the primary instrument of monetary policy."