March 10, 2009

Global Free-Riding

Bill Anderson reads the Slim Times so that you don?t have to, and this morning he does a job on David Brooks. (Hat tip: RSMc)

Brooks then gives us this one, which is full of ‘internal contradictions,’ to use a socialist phrase:

…Republicans could get out in front of this crisis for once. That would mean being out front with ideas to support the wealth-creating parts of the economy rather than merely propping up the fading parts. That would mean supporting President Obama?s plan for global stimulus coordination, because right now most of the world is free-riding off our expenditures. That would mean eliminating all this populist talk about letting Citigroup fail, because a cascade of insolvency would inevitably lead to full-scale nationalization. It would mean coming up with a bold banking plan, rather than just whining about whatever the Democrats have on offer.

Whoa! He complains about propping up the “fading parts” and then advocates propping up a fading company. And then there is the line about the rest of the world “free-riding off our expenditures.” People, that is rich, rich, rich.

As Peter Schiff has said, it is the USA that has been free-riding off the rest of the world, taking their products for our green paper, which they then use to buy more U.S.

Government debt, and then continue the practice over and over again. The “stimulus” is just another episode in this same sorry and unsustainable chain of events.

I must admit that while Brooks does not have the academic “credentials” of Paul Krugman, this column truly is worthy of Krugman’s praise and adoration. However, I would bet that Krugman himself would claim that this was a “free-market” column.

It?s rather amusing that Brooks thinks of Obama?s Washington as Atlas supporting the world?no telling how much Asia is benefiting from our ensuring of the bonuses of Citigroup banksters, or our propping up of our failing companies, or our expansion of unemployment compensation!

The reality is the moment the world cuts Uncle Sam off (i.e. stops buying its T-Bill junk bonds) is the moment it starts to become much wealthier and freer. 

Moreover, as Schiff points out, something like a ?global stimulus? is a contradiction in terms. We can?t all borrow money and run massive deficits; some people actually have to save. The only way this idea makes sense is if the entire world went on a big low-interest rate money-printing spree. 

Obama may simply not know what?s he?s talking about?Obanomics has mainly been an act of flailing around. But Bernanke and the central bankers do know what the score is. So far, interest rate cuts have been coordinated globally, and my guess is that the Fed is going to try to coax its peer banks into working in unison to inflate currencies worldwide.

Again, the moment a foreign central banker decides to buck the Washington consensus is the moment his country will begin to become wealthier. 


Subscribe to Taki’s Magazine for an ad-free experience and help us stand against political correctness.


Sign Up to Receive Our Latest Updates!


Daily updates with TM’s latest