Acton Institute Powerblog

Straight Talk on Trade

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My reaction to any politician claiming to offer “straight talk” is a knowing chuckle (“yeah, right”), and that includes John McCain. So I’ve got to give credit to the so-called Straight Talk Express for a recent campaign stop in Youngstown, Ohio, where the Republican presidential candidate offered some honest and accurate comments on a contentious subject in politically risky circumstances—straight talk, if you will.

The subject was trade, and McCain defended it in a region suffering from the real or perceived effects of the extension of free trade in recent decades. In the heart of labor union-friendly, manufacturing-dependent eastern Ohio, McCain said, among other things:

The biggest problem is not so much what’s happened with free trade, but our inability to adjust to a new world economy.

Protectionism and isolationism have never worked in American history.

I can’t look you in the eye and tell you that I believe those jobs are coming back. What we’ve got to do is provide [displaced workers] with education and training programs that work.

With pro-growth policies to create new jobs, and with honest and efficient government in Washington, we can turn things around in this city.

Pro-growth policies would include, one assumes, lowering the state’s state-local tax burden, calculated by the Tax Foundation as 12.4%, fifth-highest in the nation.

Kevin Schmiesing Kevin Schmiesing, Ph.D., is a research fellow for the research department at the Acton Institute. He is a frequent writer on Catholic social thought and economics, is the author of American Catholic Intellectuals, 1895-1955 (Edwin Mellen Press, 2002) and is most recently the author of Within the Market Strife: American Catholic Economic Thought from Rerum Novarum to Vatican II (Lexington Books, 2004). Dr. Schmiesing holds a Ph.D. in American history from the University of Pennsylvania, and a B.A. in history from Franciscan University ofSteubenville. Author of Within the Market Strife and American Catholic Intellectuals, 1895—1955 (2002), he serves as Book Review Editor for the Journal of Markets & Morality. He is also executive director of


  • Clare Krishan

    “… problem… our inability to adjust to a new world economy.”


    We created the new world economy, we just forgot to warn our citizens that they have as little “labor value” now as the slaves did that built the nation. We have no property rights, since the wages we earn are payable in federal certificates that the government co-owns, and can value at will with setting FIAT interest rates or printing FIAT dollar bills .

    Kevin, as a Catholic speaking to a Catholic, may I encourage you to read the Pope’s reference at the UN to Vitoria’s advocacy of human rights? Back in the day, a disinterested concern in human dignity was not apriori, rather it was preceded by a faith-based scholastic discussion of the associated concept of property rights between monarch and subject, only ending in the articulation of God-given innate human rights.

    Sadly, too many Christians lost this treasure when Enlightenment reformers rejected apriori “Papist superstitions” divorcing man’s carnal essence from his willpower, with “I think therefore I am.”

    McCain makes the perennial error of the Protestant – preferring his own flavor of relativistic private judgment (national economic policy as efficacious not injurious) to the absolute divine justice (liberty of agency for all to make their own marginal utility decisions using the capacities endowed by their Creator, unhindered by government dictat).

    See the Mises article on “two pennies” here
    “A perfect example of the devastation caused by aggressive central banks is Zimbabwe’s new fifty million dollar banknote that can buy three loaves of bread.”

    And then analyze your own role in Acton’s stubborn and protracted inability to counter the scourges of Smith’s “invisible hand” capitalism.

    The “liberty” that we coreligionists ought defend is not an ideology of some abstract exchange economy, but the real creative human agency that makes any economy possible (Berbd Bergmann’s quote below of pithy Italian wisdom “to return ‘to what is real, responsible and durable'”.)

    We need a Christian “Caring Hand” capitalism that defends universal human property rights from the predations of the greed of our statist economic (foreign) policy of aggression and pillage.

    McCain’s first priority to help Youngstown: abolish the Fed!!

    Second: Repeal income tax laws (seignorage on labor is slavery by another name)

    Third: reform capital gains tax code, such that an owner occupier householder/family is free from capital gains for the duration of the purchase and residence in one property for one life. Reclassify real estate speculation (flip-that-house, buying up, etc) as profitable commerce not capital gains, and levy taxes accordingly. Folks would thus have the incentive to save (accumulate real capital wealth) to buy the best piece of property they could afford to get the biggest tax vacation of their lifetimes, and be encouraged to maintain property values in the neighborhoods, just as traditional custom in most of Europe for a millenium or more.

    As an ex-pat resident alien, whose capital portfolio still has not regained the stock value in the options and shares I own in the Company McCain’s floozy economic advisor Carly Fiorina was fired from, I cannot find it in my heart to sympathize with Americans bewailing their 2-acre stick-built shacks have depreciated to a mortgage payment less than half the price of the rental I paid in Germany for an 2 -bdrm apartment in a concrete bunker condo on the trolley tracks. Property is very cheap here, stop whining! Living costs money, grow up and start making some!

    And REVOLT every time your government steals it from you!!!!!!!!!!

    Vote Ron Paul.

    And ignore everything and anything Carly Fiorina has to say…

  • Clare Krishan

    N.B. where “income” as a vocabulary term refers to:

    __”wages”__ paid in exchange to a human for a time-period or work-product, rated as a marginal incentive for short-term gain to defer other long-term forms of income-generating activities

    and not

    __”speculative return”__ earned in exchange for risking personal property on the capital markets

  • Clare Krishan

    Carly Fiorina is a limited liability example of moral hazard, she didn’t use prudence — she’s free after cashing out her private gain, while we retirees, stockholders and employees, almost a decade hence, are still socializing her risk.


    “It’s the latest chapter in the socialization of risk and its corollary, moral hazard.” Wilson Burman © The American Conservative

    __Papering Over the Problem — Killing the dollar to save Bear Stearns__

  • Anonymous
  • Kevin

    Thank you, Clare, for your insightful and provocative comments, as usual. There is a lot in these posts and I can’t address it all, but let me say in summary that I don’t think our positions are as far apart as you suggest. I did not mean to defend everything John McCain holds, does, or says, merely to point out that he did not do the usual anti-trade pandering to the country’s manufacturing regions. That is either courage or a peculiar kind of political calculation of which we need more.

    Regarding the Bear Stearns bailout and the Fed’s manipulation of the money supply, I know you saw Oskari Juurikkala’s recent Acton Commentary *criticizing* both phenomona, because you posted comments there. I doubt anyone at Acton favors those things so I’m not sure why you portray us as being on the wrong side of the issues.

    As for the income tax, if you’ve got a petition to abolish it, I’ll sign it.