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Workers’ and consumers’ rights will take swan dive if economist has his way

September 17, 2010

(This is one of several articles that GRIID will post over the next few days based upon our attendance at the West Michigan Regional Policy Forum.)

2010 West Michigan Policy ForumBrian Wesbury’s lunch hour remarks  at the West Michigan Regional Policy Forum reiterated the event’s goal of influencing government to free business from taxation and regulation.

Wesbury’s bio lists him as Chief Economist at First Trust Advisors L.P., a financial services firm based in Wheaton, Illinois. The Wall Street Journal ranked  Wesbury the nation’s #1 U.S. economic forecaster in 2001. These credentials, no doubt, brought him great credibility among the elite business crowd in attendance.

Wesbury’s topic was, “Back to the basics for Michigan’s recovery.” He started off with an analogy based on his recent visit to the 88,000 square-foot Dodge mansion, which now stands on the campus of Oakland University in Rochester, Michigan. “The wealth that was in Michigan in the 20s, 30s, 40s and 50s, the kind of wealth that could build a mansion like that, do you know where it came from?  . . . That wealth, like all wealth, came from the increased productivity of our economy.”

Wesbury went on to tell the stories of Michigan’s farmers who were forced off the farms and into factory work that they hated because technology increased agricultural production. “That transformation created massive wealth that was built on the blood, tears and cries of farmers due to increased productivity brought about by the invention of the interbnal combustion engine.”

Don’t sympathize with those farmers of years past. Wesbury doesn’t. Instead he compares that so-called “progress” to today’s economic scene. Simply stated, technology has eliminated out-of-date manufacturing jobs but, not to worry, Americans are buying more stuff than ever before. “We produce three to four more times more stuff than we did in 1950. Thirty percent of all US workers were in manufacturing in the 50s, nine percent are now,” he said. “This is what happens when technology transforms the economy.”

Wesbury made no mention of free trade policies that have moved jobs to countries where sweatshops, slave labor and dangerous working conditions are the norm.

He also compared Michigan’s current economic woes to those experienced at the turn of the 20th century. At this juncture, an image of a black swan was projected on the overhead screens. “Today we have populists. People feel uneasy. And in the middle of this unease, we get a black swan. We have the idea that all swans are white until we see a black one. Once we see a black one, it changes all our paradigms,” he said. “Everybody thinks black swans are bad. ‘It’s going to take us down. We’re going to get pecked to death at any moment.’ It dawned on me, black swans can be positive too. ”

Wesbury identifies today’s economy as a black swan. In other words, there’s nothing to worry about. We just have to be positive. ” We suffer from economic hypochondria,” Westbury said.

Wesbury then described the economic history of humankind as a hockey stick. It was horizontal, with no change, until 1750, and then, with the writing of the U.S. Constitution, economic growth went straight up. He exclaimed, “We went straight up. That’s America. The world got freedom. The US constitution. Do you believe that’s over? That a pack of wild black swans have finished us off? Nobody in their right mind can beleve it.”

While he admitted with a chuckle that other factors might have been involved in that upward movement, he made no attempt to verify this claim, or any of the others he made, except by means of flashy charts and graphs on the overhead screens.

Wesbury then turned his focus to the subprime interest crisis that resulted in the massive bank bailouts and millions of families losing (and still losing) their homes to foreclosure. “Guess what, people borrowed too much. They took losses. So what. (The crisis was caused by) the government’s reaction to people who borrowed more than they should have to buy a house,” he said.

Wesbury went on to state that the 2008 finincial crisis was smaller than crises in the 70s and 80s. He credited then President Ronald Reagan with solving the earlier crisis by cutting taxes, cutting spending and raising interest rates. Wesbury fails to mention that Reagan’s deregulation policies were at the root of the predatory lending practices and mortgage lending crisis that has caused America’s families to lose their homes.

Wesbury proclaimed, “US citizens today are purchasing more than they have ever purchased in the history of America. . . We are in the midst of a strong recovery.” Tell that to your friends who can’t find a job that pays a living wage, do not have health insurance and are back living in an apartment because a bank took their home away. He presented no figures on who exactly is making all these purchases or what their income levels were.

Wesbury blames high unemployment rates on high government spending. Does he mean the more than $1,080,974,500,000 spent on the occupations of Afghanistan and Iraq? Does he mean the billions given annually to Israel’s military for their criminal occupation of Gaza? Does he mean the millions of dollars in subsidies given to corporations and big agriculture? No. It’s all the welfare crowd’s fault. He  referred to  18% of Americans  receiving government assistance. “82 people are pulling the wagon. 18 people are in the wagon. . . They’re living off their fellow man. They’re not doing what they were put on earth to do.”

Wesbury summed his arguments up with graphs comparing Michigan to Texas. The graphs supported his claim that eliminating taxes on and regulation of businesses, becoming a Right to Work state and reducing government spending would turn Michigan’s economy around. His last slide was a photo of a price gun, used to affix price tags to merchandise on store shelves.

“You have to label every item for sale in this state. There are two reasons for this. One, it’s a job. It’s a union thing. Two, people don’t trust you. . . We don’t trust business so the state has to regulate them. That’s a serious problem in a relationhsip between business and the government. It’s government’s way of signallung ‘these people aren’t trustworthy,” Wesbury said. “The head economist at the IMF said that technology has taken off so fast that we need more government (regulation). I look at the world totally the opposite. The more technolgy, the more entrepreneurship and the more capitalism we have, the more stable things are. We need to fight for freedom. Have faith in people . . .You have to go on a campaign to make them trust business. If you dont trust it, you don’t have an economy.”

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