Your Lying Eyes

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16 February 2006

Curry - I Mean Ketchup - With Those Fries?

From his latest VDARE article, Paul Craig Roberts reports that even McDonald jobs are no longer safe:
Why pay an error-prone order-taker the minimum wage when McDonald can have the order transmitted via satellite to a central location and from there to the person preparing the order. McDonald’s experiment with this system to date has cut its error rate by 50% and increased its throughput by 20 percent. Technology lets the orders be taken in India or China at costs below the minimum wage and without the liabilities of US employees.
My first reaction to this was "well there goes my retirement plans." Actually, the whole article is well worth a read, especially as an antidote to the very kinds of economic analysis he's denouncing. A typical specimen is a recent TechCentralStation article Stop Worrying About the Trade Deficit, by economist Don Boudreaux, an article truly remarkable in its willfull flouting of reality. He doesn't mince words, Professor Don: "Contrary to popular opinion, this so-called "deficit" is a blessing" he states right off. After laying out out a rather unconvincing trade scenario involving China and a factory in Utah, he lets loose with this stunning salvo: "In fact, America's trade deficit is evidence, not of any imbalance, but of the happy fact that our economy is so strong and stable that foreigners invest here eagerly." Well I certainly feel much better now knowing that when I went to Home Depot last year and came home with 3 Chinese-manufactured Maytag air conditioners for less than $600 I was really taking part in a secret plot to dupe the Chinese into investing in our surging economy. I thought I was just saving a couple hundred bucks by not buying American.

But what I find most disturbing about this line of argument is its utter dishonesty. A month before this article appeared, one of our most distinguished economists, Martin Feldstein, wrote an article on this very subject. In "Why Uncle Sam's bonanza might not be all that it seems", Feldstein notes that the Treasury data on the Current Accout Surplus is easily misinterpreted to suggest that private investment is the source of the capital inflow (as Boudreaux clearly suggests it is).
The very large current account deficits are now being financed by bonds and shorter term fixed-income funds. Some of this has recently come from Opec governments and other oil producers that are temporarily placing revenue in dollar bonds and bank deposits until they can spend those funds on investment or consumption. Much of the inflow in recent years has come from Asian governments that wanted to accumulate foreign ex-change to eliminate the risk of speculative attacks of the sort that hurt those countries in the late 1990s. A large amount is coming from China and other Asian governments to stop a falling dollar reducing their net exports. If they decide to buy fewer dollar bonds, the US current account deficit could not continue to be financed at current exchange rates and interest rates.
Now Boudreaux, as a professor of economics at George Mason University, had to be aware of this analysis. Perhaps he disagrees - but he gives no hint that there's even a question about the nature of our trade deficit's financing, never mind that one of the most highly respected economists is certain that it is not private investment but foreign government holdings of US currency, ready to be dumped at the nearest sign of trouble. Do guys like Boudreaux even think about what they're writing - do they just automatically take a certain side and argue it without a care about reality? Are they just more examples of the kinds of people Greg Cochran simply calls "liars"?

7 Comments:

Anonymous lzrski said...

And don't forget that poor Maytag repair man, he's sitting on his butt, waiting for you to call!

February 17, 2006 6:48 AM  
Anonymous gcochran said...

Why the quotes? They're liars. Now I suppose I have to make up a list, I suppose: but since there are so many, couldn't we turn it into a wiki-type effort?

We could build a database that let the typical net user find out just how stupid and dishonest (yes, we would also list the stupid) every person in public life was, with linked examples: something like a Dun and Bradstreet rating.

February 17, 2006 12:16 PM  
Blogger russ said...

Glad to hear about McDonald's new development. My drive through order always gets screwed up.

February 17, 2006 2:01 PM  
Anonymous Anonymous said...

Mainstream it is. Willie Nelson now has released a song about the feminity side of cowboys. Boy oh boy has a different meaning every day

February 17, 2006 3:05 PM  
Anonymous gcochran said...

Of course it would be easier if we just prepared the short list - those who aren't.

February 17, 2006 5:09 PM  
Blogger ziel said...

I don't think the short list would be very effective because people might think others are worthy but haven't made the list yet.
The rating system sounds like a great idea - I'll have to think about it - hopefully somebody smarter comes up with an idea so I don't have to think too long.

February 17, 2006 8:10 PM  
Anonymous Branden said...

A lot of effective data for myself!
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October 18, 2011 12:08 PM  

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