The only thing we have to fear …

… is ignorance. Franklin D. Roosevelt may have believed that fear itself was the enemy, but he was wrong. What he really faced was ignorance of the forces that led to the Great Depression – the ignorance that allowed the forces of greed – corporate tycoons, buttressed by their well-meaning economists, armed with their primitive, 18th century theories about free trade and comparative advantage, to convince our nation’s leaders that an abandonment of successful trade policy would send exports soaring along with their self-interests. Only ignorance could have allowed that generation to believe that a $0.67 billion decline in trade volume could cause a $33 billion decline in their GDP, and that a tweaking of tariffs that had been so successful for over 150 years could have collapsed the global economy.

It’s the same ignorance we face today – an ignorance that settles for superficial explanations for the latest economic collapse – a housing bubble and sub-prime mortgage crisis – without ever questioning why we had to resort to the concept of sub-prime mortgages to make housing seem affordable in the first place. It’s the same ignorance that plagues our economists today, still adamant in their refusal to give consideration to how population growth may impact the macro-economy. It’s the same ignorance that fails to recognize the relationship between population density and per capita consumption, and what happens when nations grossly disparate in in these characteristics attempt to trade freely with each other.

It’s only ignorance that allows economists to believe that a global economy which is utterly dependent on the draining of resources of its wealthiest state can be sustained indefinitely. It’s ignorance that leads us to believe that that same state, now collapsing under the weight of its debt, can only be saved by force-feeding it more debt. It’s only ignorance that allows economists to believe that never-ending population growth is the only path to a healthy economy, or that it’s even possible.  It’s ignorance that places total trust in the World Trade Organization, loudly critical of protectionist forces in the United States while very quietly enforcing protectionism in favor of two thirds of its member countries – but not the U.S., of course.

Will Barack Obama carry on this tradition of ignorance by settling upon policy spoon-fed him by his staff and advisers, as his predecessors have done for decades? If policy is crafted by the most capable of ignorant advisers, is it any less ignorant? Or is Mr. Obama wise enough to recognize when policies recommended by his advisers are the same that have been tried before and ultimately led to where we stand now? Will he be courageous enough to trust his own instincts and reach far enough back in history to find policy -especially trade policy – that was a time-tested and proven success? For now, all we can do is hope.

 

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2 Responses to The only thing we have to fear …

  1. Pete,
    It certainly doesn’t appear that Mr. Obama has any of the traits of your latter description. But certainly of the former as is evidenced by his Maynard Keynes approach to ever greater consumption spurred by massive increases in public debt.

    Keynes did so without the bothersome consideration of the natural limits to growth. At least limits to growth while at the same time maintaining a steady or inclining standard of living. In the end, Thomas Malthus will be proven correct.

    This was an excellent article and points to the greatest force in the universe; that of human greed without concern for future consequences.

    • Pete Murphy says:

      I see Obama as a highly intelligent person fiercely committed to doing what’s right for the country but, not yet understanding the limits of growth or the role of overpopulation in eroding the economy, is currently a man of contradictions. He wants to reduce unemployment, cut carbon emissions and reduce our dependence on foreign oil but, at the same time, remains committed to immigration, stoking a labor pool already in a state of oversupply while importing more carbon emitters and oil consumers. He’s falling back on the Keynesian approach of printing and spending money, but seems committed to a “grand bargain” to restore fiscal responsibility. It’s going to be very interesting to watch this clash of contradictions and see which Obama wins out. While we’ve had presidents before who were committed to restoring the economy, just as Obama is, we’ve never had one committed to the global climate change and energy issues which, when examined in depth by a thoughtful person, can only bring one around to the conclusion that unending population growth can’t be sustained. That’s the Obama that I hope emerges.

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