Friday, February 20, 2009

If Only America Were More Like India...

One of the things I have been doing since I lost the focus to keep up this blog is debating politics elsewhere on the internet... see my recent adventures with the conservative LiveJournal community, for instance. I don't go looking for arguments, but sometimes I come across something so stupid or infuriating and just go off.

Case in point: This video on the YouTube channel of the libertarian magazine Reason, entitled 'What Slumdog Millionaire can teach us about economic stimulus'. Their description reads in part-
Indians were enthusiastic about self-rule, but "the problem was that the Indian political leaders had this very Fabian Socialist idea," says Shikha Dalmia, a senior analyst at Reason Foundation and native of India. "And that completely thwarted the entrepreneurship of the country."

For decades would-be entrepreneurs staggered under the weight of corruption and bureaucracy...

...But in the 1990s, India emerged as a high-tech powerhouse. What changed?

"In the 1990s India started liberalizing its economy," says Dalmia, "and it did three things: cut taxes, liberalized trade, and deregulated business." Although they failed to cut the kind of red tape that entangled Slumdog's orphans, the reforms did make it easier for more Indians to start businesses and hire employees...

...Yet here in America we're turning away from market reform. Says Dalmia, "It's just this great conundrum that at the same time that deregulation and markets have produced such dramatic results in India, they are falling into suspicion in America." Dalmia's prescription for India is at odds with what politicians have chosen to "stimulate" the United States. "What India needs to do is continue apace with its liberalization effort, but expand it to include the poor. Release them from the shackles of government corruption and government bureaucracy."

Yes, it's obvious what causes poverty... government corruption! If only we'd reform our markets (and by that I mean, natch, getting rid of all that pesky regulation and taxes), we could reach our full potential. Just like India!

I responded, within the space limits of the YouTube comment section-
"Yes, India's economy is doing fabulous... at the expense of the U.S. economy.

Our greedy execs have sent so many U.S. jobs there precisely because of the deregulated, lower wage atmosphere the text to the right there wants us to celebrate. If the type of economy that we see in India-- hardly a major world economic power-- and its effect on the U.S. job market is supposed to be a model for us to emulate and celebrate... well, I weep for the 21st century.

We used to aim higher."

I received (so far) two replies to this, and six thumbs down. I suck, I know.

The first response I received-
"If we had similar deregulation, wouldn't that mean those greedy execs wouldn't have to outsource their jobs to other countries like India, and we could get some of those jobs back."

My response back-
"No, it wouldn't mean that. We've seen now what good comes here from deregulation. Both businesses and individuals acting as if there are no rules.

Another example... tax cuts. Bush defended his cuts saying it'd make businesses hire more etc. Instead, companies laid off more than ever and slashed benefits and cut hours in recent years (pre-recession even), and just increased their own top-level profits.

The idea that execs care about workers or the lower economy is naive."

The second response I received?
"So we hould stay rich and India poor? God forbid that anyone else has an opportunity to work and to feed themselves. No we should continue our protectionist policies, keep 3rd world countries poor, and pay them only charity in return for political and military favors. And as Gavinthorp mentioned below, you've already stated how we can be competative and get those jobs back. What in the stimulus package does any of that?"

And my response back, in turn-
"If India getting richer means we get poorer, then yes I absolutely disagree with that. Do a nationwide survey on that too... I think you'll find the vast majority would agree, particularly the growing # of unemployed.

Why can't India pull itself up by its own bootstraps? Why should they rely on our handouts? WINK!

We need to take care of our country's problems-- creating new industries, fix healthcare etc-- and stop sending jobs to some countries while becoming a debtor nation to others."

I ignored his question about the stimulus, because I think that was changing the subject. For the record, I won't pretend to believe that that package will solve all our problems, though, under the circumstances, there's enough good starts in there to at least hope for the best.

I'll also state, in conclusion, that I am not a protectionist or anti-trade. Trade is good. It's a big world, and we all have lots of ideas and goods and culture to share. But the type of trade celebrated here is very one-sided. If the U.S. is in a position of seemingly unstoppable growth and expansion and shared prosperity for all its people, then yes we can reach out a helping hand to struggling nations. But we are not in that position, and haven't been for decades, with the '90s boom as a temporary reprieve. So, two things... a) I don't feel there is anything protectionist about wanting us to get our own house in order before we start throwing away jobs with one hand while unloading our growing debt to China and other nations with the other, and b) I will never be so naive as to think business leaders want to help out the greater good, you know, if only we'd stop regulating them so much.

I'm sure 'Slumdog Millionaire' can teach us something, but I don't believe that's it.


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