The Nafta “debate” was hardly that at all. The treaty text—the blueprint for North America’s Maastricht—didn’t appear until very late. A handful of smart economists read the text, and concluded it was an unwise political and financial merger, not free trade. Assorted groups of populists, greens, and unionists opposed the treaty too, on the vague grounds that Nafta had the feel of an insider deal.
The cords that bind the Union together are weaker than they have been in more than a century. Many states are entering into political revolt against federal encroachment. But this situation is no departure from American tradition. Revolting against consolidated government has been a key to keeping the government in check.
When Bill Clinton and Al Gore stopped off at Monticello en route to Washington for their inauguration, Gore pointed to two portraits hanging in Mr. Jefferson’s home and asked the guide, “who are those two guys?” “Jefferson and Madison,” the stunned historian answered.
To understand the House Republicans’ budget “revolution,” pay careful attention to this number: $55 billion. That’s the amount federal spending will increase next year. A year later, according to their plan, the budget ticks up another $38.1 billion. It goes up an average of $45 billion every year thereafter.
A gasoline-powered truck just towed an electric Ecostar out of my driveway. Built by Ford Motor Co. under pressure from the federal government, the “state-of-the-art” vehicle was loaned to me for the day. It was supposed to recharge overnight, but the lights on the panel display, flashing wildly, said it would not.
The Clinton administration, working with Republican leaders, wants to do for foreign governments what the Reagan administration did for the S&L industry. The idea, as discussed at the Halifax world economic meeting, is to create a global bankruptcy court. It would restructure government debt wherever it may be, so long as the nation is on the verge of defult. It would then lend ever more money to debt-ridden governments.
In the Clinton administration’s spin control on the Mexican meltdown, Nafta had nothing to do with it. Without the treaty, matters would have been worse, the White House says, and now Nafta will help Mexico recover.
The Republican leadership, which shepherded Nafta to ratification, has no interest in countering this argument. They fear being indicted as co-conspirators in the back-door bailout—which they allowed to proceed without even a Congressional vote.
The period between the World Wars was a golden age for the Austrian School of economics. Led by Ludwig von Mises, a group of scholars writing in the tradition of Carl Menger broke new ground in economic science. Their studies showed the superiority of free markets and sound money over all forms of government control. A top theorist in that Mises Circle of thinkers was Gottfried Haberler, who died in Washington, D.C., at the age of 94 on May 6, 1995.
As Congress considers cuts in science funding, lamentations are rising. “We’re dominated by fools,” said one Democrat. “At risk is the type of Government-financed research that has put men on the moon,” intoned the New York Times. “Such cuts portend wide changes in American science and American life.” A few years ago, a Harvard physicist compared federal refusal to build the Superconducting Supercollider to medieval Europe allowing itself to be overrun by the Moors.
We have the makings of a world central bank, thanks to the government officials from industrialized countries (the G-7) who met at Halifax, Nova Scotia, in June. U.S. Treasury Secretary Robert Rubin, as usual, got just what he wanted.
The officials didn’t call it a world central bank, a creepy term that would have invited public reprisal. But central banking is a good description of what this monster will do—as a prelude to the global economic distortion and world inflation it will cause.
