Category: General

One of the attractive features of the Republican Party is the supposed commitment to fiscal discipline and economic efficiency.  The ideology behind this view is a belief in the strength of the market and the invisible hand.  Not only does the logic of capitalism encourage individuals to work hard, invest, and save, but it ensures that individuals who have other preferences besides capitalist accumulation will still have these needs fulfilled.  Now, we can argue till the cows come home about whether the assumptions that underlie this model are correct or realistic, but that’s the basis of the argument.  For the rigorous mathematical proofs that explain just exactly what the world has to be like for this model to be realistic, see Arrow and Debreu (1954).

I (TP) am skeptical about how realistic this model is, but the logic remains the same even if markets are imperfect.  (By the way, my skepticism is not liberal graduate student bluster, but something that most Nobel Laureates in economics would agree with.)  Governments should not interfere in the markets unless there’s a good reason.  I view that as not only a very liberal argument–in the real sense, not the Rush Limbaugh sense of liberal-as-a-swear-word–but a very American argument.  Do not let governments interfere in the working of the market or the lives of private citizens.

Academic conservatives often argue that they support Republicans because their policies are closer to these ideals than Democrats.  I am also skeptical of that.  What’s my evidence?  None other than the rampant explosion of pork barrel spending that we have seen under the Bush administration.  The fiscal stance of the Republican Party since Bush took the presidency in 2001 has been an embarrassment to economic conservatives at the Heritage Foundation and the Cato Institute.

We see more of this today in an announcement that I’m sure has not been news anywhere except for that stretch of conservative goodness from Tallahassee, Florida to Brownsville, Texas.  Yes, Bubba Gump’s shrimp territory.  The Bush administration has rammed through a series of tariffs and non-tariff barriers like import quotas on shrimp imports from China and Southeast Asia.  This is just another example of Republican administrators revealing their true preferences to the American people.  Republicans are not free traders, they are protectionists just like other politicians.  Sure, Bush tells you he believes in markets, but I am waiting for some economic conservative to please explain to me how this behavior conforms to such a belief.

Any college student worth a "C" in Introduction to Economics can tell you why protectionism is a bad idea.  It comes down to comparative advantage, plain and simple.  It would be more productive for would-be shrimp farmers to find something else to do than for them to continue in their unproductive occupations as shrimp farmers.  If there were a special demand for Gulf Coast Shrimp, then people would be willing to pay for it, but the market apparently believes that Cambodian and Red Chinese shrimp taste just as good.  The insidiousnes of this policy is the fact that its effects ripple across the world.  First off, you the American consumer have to pay higher prices for shrimp because you can’t get your foreign shrimp at market prices.  Second off, because labor in the United States will not be allocated efficiently, prices in general in the United States are higher than they should be.  Third off, and what really stands out when you live abroad, Bush’s economic policies are directly impoverishing Southeast Asians by taking away jobs from them.  Apparently, this adminsitration would rather keep hundreds of thousands of Southeast Asians poor so that you can save six cents on your dinner.  I know of no conservative economic viewpoint wherein this is a good idea.

Now Bush has claimed he’s going to cut the budget deficit.  How many times does he get to promise this before Americans say, "I’ll believe it when I see it"? Remember all of this fuss about reforming intelligence gathering and homeland security that Bush and friends have been fighting about lately?  If intelligence gathering is so messed up, can someone explain to me why creating a giant new federal bureaucracy was necessary?  Can we get rid of this now, please?  How about our non-functional missile defense shield to defend against….who?  Terrorists?  They carry suitcase bombs, they don’t launch ICBMs.  Please cut this from the budget.  How about massive farming subsidies to the Midwest?  Can we please cut provisions from the budget that pay corn farmers to throw away their product?

What this really comes down to is the following argument.  Economic conservatives vote for Republicans because they believe that Republicans will implement free market policies.  I have argued and offered evidence that Republicans do no such thing, they are opportunistic politicians like everyone else.  What’s the alternative?  Vote for Democrats, who do the same thing?  Yes.  And you get the nice benefit of Democratic policies on social issues, which are preferable as well.  But what if you are an economic conservative and a social conservative?  So, you believe that the government should not interfere in the market, but should prevent two loving adults from having the state recognize their relationship.  You believe that free markets are correct, but only for people in the United States.  Well, you don’t have a party that represents all of your preferences, but you should vote for Republicans because at least they give you social conservatism.

You’d think that in a majority-Muslim country, Christmas would not be such a big deal, but you’d be wrong.  Although perhaps 90% of Indonesians are Muslim, and there are substantial Buddhist and Hindu minorities, there are still approximately 20 million Christians of various types throughout the country.  Plus all the expats, who are known for their disposable income.  We’ve been getting a good feel for holiday cheer throughout Jakarta in the past weeks, even though it’s still 90 degrees out every day.  All of the places where we used to see "Happy Idul Fitri" now say "Merry Christmas and Happy New Year."  Instead of greens and yellows decorating buildings around town, now it’s greens and reds.  There are Christmas lights up in the palm trees, and many store employees have to wear those silly Santa hats around.  When you think about that, it’s weird.  Our "Santa Claus" comes from the Dutch "Sinterklas," but Indonesia has imported the American/British/Australian view of jolly St. Nick instead of the version held by their colonial power.

We saw a lot of this when visiting a new mall this weekend.  As we’ve described, malls are all the rage here, and they are always packed, so we’ve learned to go where the people are.  People watching at this mall was interesting.  There were many more obviously ethnic Chinese Indonesians than at the malls that we normally visit, and there was also a lot more conspicuous consumption going on.  All of the trappings of the West were there as well, including Starbucks and probably a dozen other coffee shops/cafes, and a hugely popular bread store called "Bread Talk."  As a side note, we are in agreement at the fact that the only Western food that we actively miss is fresh bread–going without cheese, olive oil, Italian-style pasta, pork, and Western-style salads has been surprisingly easier than we had expected.

Coincidentally, we checked out the giant grocery store Saturday night and found the elusive banana leaves!  Our regular readers will recall that we’ve had some trouble finding these.  We decided not to buy them, though, since we were on the way to a movie.  However, we decided to do our grocery shopping there this week.  Of course, can you guess what happened?  Yesterday when we went back, they were out of banana leaves, which was particularly depressing as we were all set to engage in a flurry of cooking involving banana leaves.  Sigh.