The Kooky League of Ordinary Marxists

While it's by no means jaw-dropping for those familiar with the babbling "liberaltarianism" at Ordinary Gentlemen, Freddie's attack on free markets and international interdependence is worth citing for a sense of current orthodox thinking on the left.

Freddie cites Thomas Geoghegan cover story at Harpers, "Infinite Debt: How Unlimited Interest Rates Destroyed the Economy." Geoghegan's piece, ostensibly about the "deregulation of usury," is actually a long boilerplate screed against bank lending and capital markets, and includes this juicy quote of Marxian dialectics, "What is history, really, but a turf war between manufactuing, labor, and the banks. In the United States, we shrank manufacturing. We got rid of labor. Now it's just the banks." Anyway, read the whole thing, here.

Freddie, too lazy to find a link to the Geoghegan's piece, offers his own summary, plus a video link to Geoghegan's interview at Democracy Now!, naturally. But Freddie's extension of Geoghegan's discussion to globalization is what really caught my attention:

There’s a lot of consequences to our understanding of this situation. The first is, I think, another nail in the coffin in the notion that you can ever have a truly free market when you have a currency. When you have a currency, you’ll have lending, and when you have lending, you’ll have interest, and human nature being what it is, lenders will wring out as much interest as they can when they can, offsetting the balance of our economy ... So we need a strong regulatory apparatus to limit the size of interest rates and the degree to which banks are leveraged, in order to prevent the kind of situation we have now ....

Secondly, the pro-globalization furor that has gripped our consciousness in recent decades bears a lot of blame ... The idea that globalization is good for the United States, the world and its people is an attitude that people insist on with incredible zeal, and this insistence comes from conservatives and liberals, Democrats and Republicans. But the consequences of globalization for the United States have meant a hollowed out economy, where we produce very little of actual value, and where a huge amount of our growth comes from the accumulation of imaginary money.

Folks can debate this notion of "imaginary money" (isn't all money imaginary, really, since we place our faith in pieces of security-encoded paper, with pictures of our presidents on them, and are comforted in the notion of the "full faith and credit" of the United States government?). It's this meme of the "hollowed out economy" I want to debunk right here. The claim that the U.S. doesn't produce things is a Big Lie of the protectionist left. In thinking about this, I recall a piece some time back in the Wall Street Journal, "Still Built on the Homefront," which includes some correctives statistics:

Rumors of the death of U.S. manufacturing have been greatly exaggerated. Even as high-profile manufacturers like American auto makers stumble, a remarkable amount of stuff is still made in the U.S., from construction equipment in North Dakota to high-end ranges in Mississippi, artificial knees in Indiana and pipe organs in Ohio.

While manufacturing represents a relatively small part of the U.S. economy - about 17 percent of GDP compared with China's 41 percent - and the number of plants has dwindled, the U.S. is still by far the world's largest manufacturer by raw value of the goods produced, $1.79 trillion worth last year, nearly twice its nearest rival, Japan. China produces more of the things most consumers think of as coming out of factories - cellphones, toys, and coffee makers - but the U.S. continues making goods that tend to be more complex, difficult to transport, and time-sensitive.

This is obviously not to say the U.S. is problem free, or that there's absolutely no room for regulation in an industrial society. I'm just more fascinated at leftist ecstasy at the notion that they've finaly got their "crisis of capitalism." For more on this, see Cathy Young's piece at the Weekly Standard, "Reveling in the Financial Crisis: Naomi Klein, Rising Star of the Kooky Left."

That's classic, the "kooky left."

Let's just say Freddie at Ordinary Gentlemen is a card-carrying member.