Buchanan Raises Alarm, SWNID Quiets Irrational Fears

Respected gentle reader and Honorary Co-Blogger JB in CA today invites our comments on a recent column by distinguished protectionist ranter and occasional third-party candidate Patrick Buchanan. In this column Buchanan does what he has done since 1988: declare the imminent fall of the sky. In this case, he is declaring the actual collapse of conservatism under Dubya.

Buchanan outlines his objections to Bushism in four points:

• It is about big government instead of small-government, giving us No Child Left Behind and Medicare Part D.
• It is Wilsonian interventionism instead of isolationism, giving us the Iraq War.
• It is in favor of more open immigration, giving us, well, more immigrants.
• It is pro-free-trade, giving us lots of imports from countries that don't buy our stuff.

And the results of this, per Buchanan, are big federal deficits, the worst strategic blunder in history, a backlash against the Republican party because Americans don't want more immigrants, and a massive trade deficit, giving dollars to the Chinese to invest in American businesses.

JB ask us, why should we not be concerned?

Well, to be frank, SWNID isn't concerned.

First, on big versus small government. These are relative terms. Part of the Bush calculation is to offer a relatively smaller federal program where the body politic for a big federal program and the Ds are ready to deliver all that and more. Bush's approach to the federalization of primary and secondary education and prescription drug coverage for seniors may not have been doctrinaire conservatism, but they at least kept the reins on what could otherwise have been much worse. NCLB is largely about demanding results for money spent, and Medicare D is still largely driven by the market. Still, we'll concede a bit of unease on some parts of this.

But on the rest, we're really comfortable.

Buchanan complains that Bush's big-government binge has frittered away the federal surplus and yielded big deficits. First, let's remember that in war, countries run deficits. But then, let's get real about the deficit. It's a record only in unadjusted dollars. As a percentage of the GDP, it's currently below the average for the last 50 years.

Further, let's be honest, as Greenspan was in his recent book. In the long term, federal surpluses are worse than deficits. With surpluses, once the federal debt is paid down (and it doesn't take a lot of years of surpluses to do that, despite the size of the debt), there's nothing to do with a surplus except to spend it (making bigger government), give it back (lowering taxes, a good thing, but will anyone do it?) or invest it. That last one is what the Democrat deficit hawks want to do: let Uncle Sam decide where America's money needs to be invested. We find that unsettling. Central economic planning has a miserable record to date.

However, the notion that the best budget is a balanced federal budget ignores other economic realities. Like Adam Smith, let's use a household as an example. Who are the wiser managers of household money: the father and mother who refuse ever to borrow a penny and so live with their children in a rented apartment until they can scrape together enough to buy a house at the end of their lives, or the father and mother who buy a house with a mortgage, raise their family in it, and pay it off near the end of their lives? The answer has to do with the fact that judicious borrowing for capital expenditures is wise because the value of the capital will be realized over the time that the loan is paid off.

So it is with federal deficits. Much governmental expenditure is capital: buildings, roads, tanks, ships, planes. Borrowing for such things is wise, and that means deficit spending. So treating a surplus budget like the best kind of budget is like treating a home mortgage like an unwise thing.

On Bush's muscular Wilsonianism, we continue to applaud the notion that American power can be used to bring freedom and democracy to other parts of the world. Iraq demonstrates that this requires wisdom and patience, that it will never go perfectly and so action must be judicious and sparing. But it doesn't disprove the value of the ideal. The idea that we could effectively advance democracy with diplomacy apart from the threat of force simply misjudges the nature of the undemocratic folk who lead the countries who need democracy. Buchanan would think that using diplomacy to advance democracy is even more ridiculous, and rightly so. But Buchanan just wants the rest of the world to ... well ... you know.

On open immigration, we insist that those nations in the present world and in history that have been most prosperous also have been most open to accepting and assimilating immigrants. Why, for example, are so many Poles living and working in Ireland right now? We think it's great to be in a country where everyone else wants to live and work, and we welcome everyone who wants to contribute to the welfare of others who live here.

On free trade, Buchanan doesn't realize the economic dogma that trade deficits are self-correcting. The weak dollar resulting from our trade deficit is a good thing, part of the cycle of correction, and will stimulate American manufacturing growth and exports. Likewise, who is worried that the Chinese are buying interests in US businesses? Their money will buy capital improvements that will increase productivity and create jobs and wealth for Americans. Their investments, their hiring of employees and their business activities will be regulated by American law. The more invested the Chinese are here, and the more we are invested there, the less likely we are to go to war with them.

SWNID is about to make an unfair judgment, which is what SWNID does best. Pat Buchanan is insecure and consequently xenophobic. He thinks that the good that we have in this country is fragile, that it must be protected or it will collapse. We think that there are people who, given the opportunity, would take stuff from us, including our lives. But America won't collapse because we buy grapes from Chile or TVs from China or because they guy who puts siding on our house came from Mexico or Ukraine. Neither will it collapse because some of our businesses are owned by folks who look different from us (BTW, the UK remains the biggest foreign investor in the US, but Buchanan doesn't use them as an example, does he?).

We do remain concerned that the electorate is unaware of these realities. But we aren't in favor of pandering to their fears. Rather, let's just keep telling the truth.