Your Andy Grove article is not so off topic as it may seem. There is an element of the GOP that is just fine with crony capitalism--dressed up in concern for the unemployed and the middle class, to be sure, but crony capitalism nonetheless. And with unemployment so very high this political season, it is understandable that the rhetoric, even on our side, would emphasize jobs and the middle class. But so far, most GOP candidates have confined themselves to proposing solutions that focus on removing obstacles placed by government (e.g., regulations) and encouraging economic growth. If there really is a sizable cabal of GOP voters who look favorably on government solutions, especially the kind envisioned by Mr. Grove, that is a cause for grave concern. Because Mr. Grove is profoundly wrong. It would be economically foolish to further insinuate the government into the economy and politically foolish for the GOP as well.
It is troubling that Mr. Grove wants to emulate the Chinese system of economic planning. I guess there's a place for Republicans that like centralized economic planning--I just think it's in a (locked) closet or on a dusty shelf. The preference of conservatives for small, hands-off government is predicated on the idea that a) there is a dearth of economic expertise in politicians and bureaucrats which raises severe doubts about their competence for such visionary planning, and b) the nexus of business and government leads inexorably to corruption, collusion, corporatism and crony capitalism. If we think that it is appropriate for government to play market visionary, on what basis do we object to Obama's venture capital gambles on "green" energy? Surely not on principle if we subscribe to Mr. Grove's ideas. Then it must be on competence, or incompetence in the case of Obama and his minions. But I and most conservatives see Obama as the rule for government competence, not the exception. And we view it extremely foolish to establish or perpetuate a "competing" venture capital function in the government that is numb to the consequences of its failures, blind to its own limited vision, and so easily guided by political connection rather than economic prudence and pure public interest. I wonder what Mr. Grove thinks about the sugar tariff/corn subsidy/ethanol mandate unholy trinity? I wonder what Mr. Romney really thinks about that as well. I think most Republicans would like to see that banished to the Lake of Fire. But the political stranglehold a few large agribusinesses in collusion with "green" activists have managed to create with this scheme at the expense of high food and fuel prices on the beloved middle class is just abominable.
As I said, with unemployment high, it is understandable that the political rhetoric--even on our side--emphasizes jobs. But to want a jobs-centric policy? That's crazy for a business or a government. There is no business that is in business for the purpose of producing jobs, except perhaps trade unions. And the idea that jobs are "exported" as if they are real products with some intrinsic, independent value is a favorite theme of unions. We see how well their "job-centric" approach works in almost every industry they infect. It's easy to cast a disapproving eye when jobs are "exported" to China. However, that same mentality is not restricted to foreign targets. Job-centric thinking gives rise to the unsavory strong-arm tag team of big labor and government in cases like Boeing, pitting Seattle unions against South Carolinians. Or the efforts of UPS to use political influence to bring FedEx under the same union bonds (the disparate treatment itself a product of government meddling). There is no limit to us-vs.-them with a "job-centric" policy.
Further institutionalizing a "job-centric" policy is economically foolish. But it is also politically foolish, especially for the GOP and especially as Mr. Grove envisions it. Who do you think the people naturally receptive to such rhetoric would trust to administer a "job-centric" policy? Captains of Industry in collusion with government bureaucrats playing venture capitalist as Mr. Grove seems to favor, or Democrat union operatives? If you think tax breaks for corporate investment as an indirect means of stimulating economic activity and job growth suffers from populist skepticism, just wait until Perry or Romney try to make the case with a Grove-style scheme of tariffs and a taxpayer and consumer financed venture capital slush fund ("Scaling Bank" as Mr. Grove calls it). Can you imagine the cries of corporate welfare? And they'd be right!
Mr. Grove invokes the veteran demonstrations of 1932. But he learns the wrong lesson from history. The high unemployment that prompted those demonstrations was not from free trade or exported jobs. It was a direct result of exactly the kind of tariff regime, implemented for exactly the same reasons, that Mr. Grove is so warmly attracted to. And they were enacted by a smart, technocratic problem solver like one some in the GOP today would like to see get our nomination. Smoot-Hawley was a bad idea in 1930 (when unemployment was 7.8%), as was the Tariff of 1828. Contrary to Mr. Grove's belief, no one "wins" a trade war. I have no problem keeping the protectionist arsenal intact and using the threat of it as a kind of mutually assured destruction gambit in trade negotiations. But the idea that it is winnable is a dangerous thing, just like the idea that a nuclear war was winnable. Should Romney embrace such a view, he would rightly be called a Latter Day Pyrrhus of Epirus.
--dmac
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