Posted inUncategorized

Learning from the Lone Star State

If anyone thought the Sun Belt was in danger from the Great Disruption, they can find swaggering solace in The Economist's panting, sheet-clawing passion over Texas, in an article headlined Lone Star Rising. The teaser says, "Thanks to low taxes and light regulation, Texas is booming. But demography will bring profound changes."

The Economist's journalism is often some of the best around, and even its editorials can challenge the psychotic screamathon that has become American "conservatism." But it can't completely escape its Tory establishment roots, or its intellectual grounding in the conventional wisdom, BGD — Before the Great Disruption. I don't doubt that America, and probably Britain, will exhaust themselves trying to resuscitate the old order. That will render it no less dead than the ubiquitous armadillos decorating the highways of Texas.

American right-wingers are no doubt sending the article to the faithful — and using it to further cow the Democrats, if such a thing is possible. But a close reading of even this article — and a better understanding of Texas — shows that the Lone Star State's success has relatively little to do with "low taxes and light regulation." I speak as one who covered organized crime and the oil industry there, and whose family roots go back to the bloody pre-Civil War Texas frontier.

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Posted inUncategorized

The biggest issue no one wants to discuss

Financial Times pronounced the recent Davos conference the gloomiest in its history. The "global agenda" of world leaders has crumbled. With the Doha round of trade liberalization in shambles, "protectionism" is seen on the rise. This is one thing that happens during historic economic collapses: old arrangements, particularly unsustainable ones, crash down. This is what happens when an old order enters an pivot point of discontinuity, where the future will be profoundly different from the recent past.

Dangerous destabilization is headed our way. This is why Dennis Blair, the national intelligence director, said this week that the global economic collapse is the biggest threat to the United States, bigger than al Qaeda. The more we try to deny the current reality, or return to the bubbles of the past decade, the worse the reckoning. This is also true of trade. The "free trade" regime that has coalesced since 2000 has hugely benefited the swells and oligarchs that attend Davos, especially by increasing their personal wealth thanks to cheap labor in developing countries.

But the millions of Americans who have lost well-paid manufacturing jobs as a result, with nothing to replace them but a collapsed housing bubble, don't do Davos. They are not all blameless, to be sure. Like all Americans, they are blissfully unaware of the consequences of their consumer decisions. So they happily shopped at Wal-Mart as their jobs went away. No matter. Beware the meme that facing this, as in an abortive House attempt to put a "buy American" provision in the stim package, is "protectionism." Going forward, a new world trade arrangement is essential. It is the biggest issue facing the country that no one in power wants to discuss.

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Posted inPolitics: National

When we say NAFTA, what do we really mean?

NAFTA figured heavily into the Democratic primary in Ohio, yet most of the news coverage and the debates themselves proved unsatisfying. We were served the canard that NAFTA helps consumers but hurt manufacturing jobs. NPR made it sound as if the trade agreement’s consequences are ancient history. The Democrats were more muted on NAFTA in Texas, where Laredo has boomed as a trade port.

Of course, NAFTA is a proxy for trade liberalization and globalization. China has hurt Ohio manufacturing more than Mexico. So, too, have the domestic automakers, undergirding the state economy, that continue to make boring, homely cars that fewer Americans want to buy.

But the real issue goes deeper even than that, and any fixes will be problematic. That doesn’t mean we shouldn’t make them.

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