Tuesday, October 12, 2010

More Bad Economics

Tom Foley just can't understand why PolitiFact would pronounce Russ Feingold's assertion that free trade deals have cost Wisconsin 64,000 jobs to be half true.

Neither can I. I would call it "false" or, were I given that option and inclined to be more charitable, wholly unsubstantiated.

I would direct Tom to Frederic Bastiat who observed that the difference between a good and bad economist is the ability of the former to recognize the unseen.

Feingold's protectionism is the economic equivalent of young earth creationism. Virtually no serious economist buys it. If jobs are moved to where they can be performed more cheaply, the money that is saved does not disappear. We may no longer build typewriters or pay unionized workers premium wages for turning lug nuts, but the difference is invested and new jobs are created. This is true even if other countries engage in protectionist practices.

Looking at the net gain or loss in manufacturing jobs tells us nothing. The new jobs may or may not be manufacturing jobs and, of course, pacts like NAFTA are hardly the only - and probably not the principal - impact on the growth and decline in these jobs. Manufacturing jobs have been declining from well before the passage of NAFTA.

This is the creative destruction that Feingold and his supporters pretend they cannot understand.

Last night's debate: John Galt v. Tom Joad?

It is is a common Democratic trope to call Republicans stupid. Conservatives are insufficiently informed about global warming and the implications of evolutionary science. They don't understand that embryos harvested at the blastocyst stage (before implantation) are just a clump of cells. They don't seem to understand that homosexuality is not a choice (even if its not a gene).

But the economic misunderstandings displayed by Democrats are often staggering. Russ Feingold is quickly becoming Exhibit A. He has taken a rather perceptive comment by Ron Johnson about creative destruction - one that virtually no mainstream economist would disagree with - represents some sort of heartlessness.

We can argue about the extent to which government might ameloriate the impact of creative destruction, but does Sen. Feingold really believe that it should be prevented? Should we tax every day people to prop up typewriter and film manufacturers? Should we have floated municipal bonds to save the blacksmith shop? Should those same every day Joes be forced to pay more for their flat screens to keep Zenith building televisions in the United States?

Feingold's misunderstanding of Atlas Shrugged is of a piece with that. The villians are not every day people who work, but the looting class that wishes to control - and profit from - the work of others; to reap where they did not sow and to rule the innocent by making them criminals.

I am not a Randian, but Johnson may have cited another Rand novel, The Fountainhead, to the effect that the upper class is a nation's past, while the middle class is its future. The difference between the two has to do with the way in which the middle class creates and sustains itself.

Wednesday, October 06, 2010

Does Russ Respect Rights

In the event that people feel that Charlie Sykes criticism of Russ Feingold's use of NFL footage in his ad is partisan hyperbole, it is not.

Those who know me may have heard me say that I think much of Intellectual Property Law is facism. But, in my capacity as General Counsel of a moderately sized multi-national corporation, I was faced - at least once and maybe more often - with questions of whether our marketing people could grab small bits of NFL video in marketing pieces - including one in which we had hired a former NFL player to promote one of our products and wanted to show the guy scoring a touchdown in the Super Bowl. Our IP guy told us - quite correctly - that we couldn't do that. He explained to me that it wasn't even a close question. He showed me that the law was clear and noted the NFL's well known vigilance in protecting its property rights. I didn't like it, but I accepted it.

It really is hard to see this as an honest mistake. Ad agencies and campaigns are lousy with lawyers and no lawyer or agency in business for more than a week and a half would have failed to recognize this issue.

When you combine this with Feingold's creepy attempt to make one of his ads look like a news broadcast, this campaign seems to be in need of some ethical guidance.