First, the lunacy. Alabama’s Senator Richard Shelby, despite his love of pork and earmarks generally, has taken a semi-principled stand against the financial bailout and, now, the automaker bailout. I applaud him for that and wish that more of our congresscritters would oppose these needless, wasteful bailouts. However, Joe Babiasz, a GM employee, believes that Alabama as a whole should be boycotted because of Shelby’s stance against the automaker bailout. To that end, Joe has created Boycott Alabama Now designed to encourage people to boycott Alabama products like the Mercedes M Class and avoid spending money while in Alabama. Trying to boycott an entire state because for once the congresscritters stand against the usual horse-trading and waste in Washington? Give me a break, Joe!
It’s at times like these that I’m glad the US founders created the largest free trade zone in history, so that the absurdity of protectionism could be shown once and for all. The US has been artificially propping up the domestic auto industry for years through tariffs and subsidies, like the “loan” to Chrysler. Such protection insulated the auto execs from the changing realities of the auto market and relying on that protection, they failed to adapt. As a result, the US auto industry cannot compete on the global market. So, after years of protection, they want more in the form of subsidized “loans”? Utterly ridiculous.
It doesn’t matter whether our cars are made in Wyoming or Bangalore. Protectionists always rely on jingoist pleas (“true Americans”) to make folks believe that you have to buy American or Albanian or Australian. And people like Joe and the American consumer of domestic automobiles get screwed because their job was made to appear stable and those products were made to appear economical, when nothing could be further from the truth. Both were subsidized for decades. If you want something to boycott Joe, you should boycott the protectionist policies that got us in the mess we’re in now.
This current crisis also demonstrates the flaw in Keynesian economic policy: it depends on consumption. If your economic system is heavily dependent on consumption, the bubble will eventually break and the downturn will worsen as long as your currency is inflated. That’s what’s happening here and it’s a direct result of politicians trying to manage what no person or group of people ever can, an economy. The Soviets tried to do it in a less subtle way and failed and if we continue to believe that economies can be controlled, we will continue to face downturns, some severe, every few years or so. End of rant:)
And now for some wisdom:
Peter Schiff, one of Ron Paul’s economic advisors, routs Detroit Mayor Virg Bernero in the CNN segment below: