Heartland voters in Iowa rewarded the populist candidacies of Mike Huckabee (R) and John Edwards (D) this past week, giving the former a commanding win on the Republican side and the latter a solid 2nd-place finish among the Democrats.
In a devastating column in today's Washington Post, George Will assails both men for "encouraging self-pity and economic hypochondria", and counters many of the beliefs that form the bedrock of the candidates' arguments. For example, concerning the much-bemoaned plight of the shrinking middle class, Will busts out this interesting fact:
Economist Stephen Rose, defining the middle class as households with annual incomes between $30,000 and $100,000, says a smaller percentage of Americans are in that category than in 1979 -- because the percentage of Americans earning more than $100,000 has doubled, from 12 to 24, while the percentage earning less than $30,000 is unchanged. "So," Rose says, "the entire 'decline' of the middle class came from people moving up the income ladder."
Thus far, John Edwards' campaign storyline has fixedly been about economic inequality, and it should be treated with skepticism. Whereas at least Mike Huckabee's message is largely about social and moral responsibility, I have been increasingly dismayed by Edwards' one-track focus on "corporate greed". I fear his message, divisive at the least, incitation to class warfare at its worst, is reflective of an incorrect understanding of economics and an underestimate of America.
David Brooks, writing in the NY Times a couple months ago, had an excellent column decrying what he dubbed "Dobbsianism"--a view that holds the rest of the world as a threat to our economy. It is a view that has manifest itself as a growing backlash against liberal immigration policies and free trade, one that sees the rest of the world only as responsible for "lead-painted toys, manipulated currencies and stolen jobs." It is a dangerous, wrong, pessimistic, backward attitude.
Our economy is not under siege from the rest of the world. China and India are getting plenty of headlines in the news, but there is plenty we are doing right (as I first mentioned about two years ago). The U.S. leads the world "in a range of categories: higher education and training, labor market flexibility, the ability to attract global talent, the availability of venture capital, the quality of corporate management, and the capacity to innovate." Furthermore, the U.S. is the productivity leader in almost every industry. America has a high standard of living, high birth rates, a younger population than much of Europe and Asia, and low unemployment.
Brooks goes on to counter the outsourcing Chicken Littles:
90 percent of manufacturing job losses are due to domestic forces. As companies become more technologically advanced, they shed workers (the Chinese shed 25 million manufacturing jobs between 1994 and 2004). Meanwhile, the number of jobs actually lost to outsourcing is small, and recent reports suggest the outsourcing trend is slowing down.
He concludes, correctly, that "The U.S. still has much more to gain than to lose from openness, trade and globalization."
With regards to the upcoming election, here's my take: The anti-capitalist, anti-free market views that are gaining in traction are in the economic interest of a very narrow segment of voters. Everyone else should be looking for a sober, non-alarmist candidate who understands current economic realities.