Thursday, November 16, 2006 :::
After considering yesterday's op-ed from Jim Webb in the Wall Street Journal, it seems to me that there are more, and stronger, parallels between Webb's economic outlook and that of the paleoconservatives.
Consider this cover story by Prof. James Kurth in the "American Conservative" -- written, interestingly enough -- a few weeks before Webb's Journal piece. While not perfect matches, the threads are woven from similar cloth. First, Webb's introduction:
The most important -- and unfortunately the least debated -- issue in politics today is our society's steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America's top tier has grown infinitely richer and more removed over the past 25 years. It is not unfair to say that they are literally living in a different country. Few among them send their children to public schools; fewer still send their loved ones to fight our wars. They own most of our stocks, making the stock market an unreliable indicator of the economic health of working people. The top 1% now takes in an astounding 16% of national income, up from 8% in 1980. The tax codes protect them, just as they protect corporate America, through a vast system of loopholes.
And from Prof. Kurth:
In 1914, Henry Ford paid his factory workers $5 a day, twice the going rate, with the aim of creating a broad middle class able to buy the cars they were building. Today, that project isn't faring so well: The Economist reports that in the U.S. "the gap between rich and poor is bigger than in any other advanced country." And it's growing. According to the Congressional Budget Office, from 1979 to 2001, the after-tax income of the top 1 percent of U.S. households soared 139 percent, while the income of the middle fifth rose only 17 percent and the income of the poorest fifth climbed just 9 percent. Last year American CEOs earned 262 times the average wage of their workers -- up tenfold from 1970.
Reading the Webb piece alongside the one from Kurth shows that the similarities -- even down to citing the same survey from the Economist -- shows that Webb and the Buchananites have similar views on the detrimental effects of the current economy.
Well fine. What does that prove? Perhaps nothing. The strain of economic thought that informs both Webb and Kurth is as old as the Republic. It's taken different names over time -- whether it's populist, protectionist, America First or some other title. But in general, it rests on the notion that free markets aren't all they are cracked up to be and that it is in the long term interest of the people and the government to manage the rigors of capitalism lest it destroy the fabric of American life.
In many ways, it's an outlook built upon doubt and fear, two commodities that always find willing buyers in the marketplace and for good reason: Economic dislocation can be sudden and brutal. Its effects can linger for generations. For those who find themselves, or fear they will soon find themselves, at the mercy of impersonal market forces, the idea that someone will ride to their aid (whether it's through high tariffs, free silver, fair trade or industrial planning) is comforting and worth supporting.
But the results can be disastrous -- trade wars, inflation, recession, excessive regulation and even greater dislocation. Whether and how Webb's economic ideas are translated into public policy will bear watching and among those who ought to be watching the closest are those Virginia firms who depend upon trade and the free flow of capital. Do they have a friend in Jim Webb? It doesn't appear that way.
::: posted by Norman Leahy at 11/16/2006