Thursday, April 05, 2007

Economics impacting new Administration

James Pethokoukis suggests that the new President may enter Office in 2009 with a Budget surplus, rather than with a Budget deficit. Here is a serious misreading of the situation. The current Republican Congress and President are in high Pork Barrel mode, and unlikely to discontinue their activity; expect a 9% increase in Federal Spending in the coming Year. A new Republican administration and Congress will continue their suppression of Business taxation at all levels–including Capital Gains. A new Democratic administration and Congress will possess an entire list of social programs which will rival the Republican Spending of the Bush years. It is high unreliable to belief any new Administration will reverse any Spending excesses of previous years. Do not expect any Budget surpluses in the near future.

Readers of this blog also know I am closer to being a Protectionist than a Free Trader, ranking me alongside the pretax Democrats though I don’t happen to be a Democrat at all. I say this for a number of reasons. I first do not believe there is any economic efficiency left in Trade, though there might be a Ricardian Comparative Advantage. Energy Consumption basically eats up whatever Profitability in Trade Goods remain, and the World is highly indicative that they will not continue any greater Copyright and Patent protection other than lip-service in the coming future; the real impediment currently consisting solely of inferior technological bootlegging. American enterprise places far too much faith in information selling. Republican, Democrat, and most especially Free Trader, expect We have a Lock on Development which constitutes the most grievous mistake of all at every level of American society.

I almost wish the above tendencies were more rapid in progression, because the more rapid the progression, the quicker the alteration of practice. American R&D should concentrate on redesign of American industry. American Capital should be invested in the American economy. American Products should be built by American Labor. This should all be done before foreign economies find little reason to trade with the United States, or to supply the huge American consumption of Energy. lgl

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