Things I’m Tired Of: Economic Ignorance (Volume 5)

(Source of photo:https://realmoney.thestreet.com/articles/06/12/2015/national-debt-hey-u.s.-assets-are-greater)

Preface: I’m exercising a non-attribution policy with today’s post because I want to focus on cause and effect (facts) rather than on personalities (feelings). The facts don’t care about your feelings.

With the house note out of the way, today I’m going to rail against economic ignorance and how it will likely (but hopefully not) lead to the first time in history where economic ignorance at the highest levels of our government might trigger a recession rather than the normal business cycle.

Firstly, let’s briefly discuss how the debt clock is a symbol of this economic ignorance…

The national debt, which as of this posting now stands at $22,430,652,209,581.70, is NOT the same thing as your personal debt, a private or publicly owned company’s debt, or even a state government’s debt.

Why?

The short answer is because none of those aforementioned entities are monetarily sovereign, meaning they are not the issuer of the currency like the federal government is. Additionally, we (“we” meaning our government) do not “owe” other countries (contrary to popular belief) nor is our currency issued by or tied to another country.

And before anyone “goes there”, China does not lend us money, nor are we indebted to them. We buy their goods in exchange for their holding our paper (our currency), which makes them investors in our country, not “currency manipulators”.

This point leads me to the crux of what I’m tired of today…

Sincere ignorance and conscientious stupidity are currently driving our nation’s economic policy.

As I said in a previous post, political ideology is based on normative, wishful thinking and government operates in descriptive reality. Ergo, government should never apply the ideological to things that require pragmatism.

Starting a “trade war” with our most important trading partner to appease an even more ignorant group of people in order to exploit their ignorance and anger at feeling “left behind by the economy and cultural changes” constitutes conscientious stupidity.

This is not to suggest that China is not doing unfair things in its trading practices with the United States and the rest of the world. Their outright, state-sponsored theft of intellectual property is a very serious problem that should absolutely be dealt with. However, a trade war via tariffs isn’t remotely the way to solve the problem.

Ordering American companies to move their operations in China into to the U.S. is not only laughable (no one in power in this country can order private enterprise to do anything of the sort), but reeks of a desperate attempt by the conscientiously stupid to appeal to the sincerely ignorant.

The American worker has advanced far past the point of working for a dollar an hour to make Nike shoes and Apple iPhones in sweat shops (i.e. the kinds of jobs American companies export to China), unless the American consumer is ready to pay $5000 for an iPhone or $500 for a pair of Nike running shoes.

Those jobs are in China and other Asian countries for a reason.

Does the out of work coal miners or the out of work auto worker want to go to work assembling microprocessors in iPhones or stitch Nike shoes together for less than a third of the money in a sweat shop 12-16 hours (or more) a day?

That’s an obvious rhetorical question.

To paraphrase something comedian and radio/podcast host D.L. Hughley said on his weekday broadcast recently, our country is divided into two factions, the Flintstones and the Jetsons and right now, the Flintstones are in charge.

Obviously, the “Flintstones” represent those who wish to return to a time where coal mining and traditional manufacturing in the Rust Belt reigned and employment was assured on a generational level.

The “Jetsons” represent the new economy where the educated, intellectual, and adaptable are driving the country’s economic growth in places like Dallas, Nashville, San Francisco, Huntsville, Atlanta, New York City, Austin, San Jose, and other places that are either blue cities in red states or blue cities in blue states, working and thriving in a 21st century economy.

Only the economically ignorant would stay in an area where the jobs have dried up and expect a messianic politician to come along and turn back the hands of time to return to them a job that is obsolete rather than move to a place and an industry where their skills are needed.

That is obviously too logical a move to make and therein lies the problem.

Sadly, it might take the first recession caused by economic ignorance to put the Jetsons back in charge and bring the Flintstones into the 21st century.

-The Rational Ram