Selected Skirmishes: Free Traitors

Pat Buchanan's downsizing of America

Patrick Buchanan's shining moment came with the "hissy fit" thrown by the Republican Establishment after his victory in New Hampshire. He was devilishly gleeful that the mavens just couldn't peg this political maverick.

Let's see. On the one hand, Buchanan is running to the left of Clinton on trade, Wall Street bashing, and industrial policy as a substitute for marketplace competition. Buchanan's heartfelt critique of downsizing by remote corporate big shots is reminiscent of Michael Moore's 1990 docudrama Roger & Me, which pictured laid-off GM workers skinning rabbits while company brass dined at the country club. That part of Pat's message sounds a lot like socialism.

On the other hand, Buchanan is patriotic, isolationist, anti-immigrant, and clearly a bellicose defender of "America First." That's called nationalism. So, Buchananism is this odd mix: nationalism and socialism. Gee, that doesn't ring a bell, does it?

The central fraud that Buchanan commits is to inflame his followers with the false consciousness (as the Marxists used to say) that the perfectly rational and progressive changes of our time–globalization, computerization, and megacorporation downsizing–are perpetrated by an evil capitalistic elite assisted by hordes of greedy foreign agents.

The tumult in our corporate superstructures is a reality of the space and time we now occupy. Take the AT&T downsizing, the 40,000-layoff cause celebre. AT&T is the remnant of what was only recently a gargantuan, inefficient, government-protected monopoly. Thrust into the icy waters of creative destruction, it is now one of the most dynamic companies in the world, an international leader in telecommunications, and the most aggressive firm in the U.S. long-distance market–where prices have fallen 60 percent over the past decade. The gains for consumers–i.e., about 120 million workers in other industries–have been enormous.

The very technologies and efficiencies that AT&T has deployed to surf the market's competitive waves have exploded demand for auxiliary services. To wit: Internet software providers owe their physical network to the fiber-optic scaffolding hammered into place by AT&T and its long-distance rivals.

Dynamic new markets combust from the rotting chemical compounds emitted by the old. The exodus of millions of workers from the farm sector earlier this century helped fuel the rise of the mighty industrial machine we call America.

The fact is that the current transition to the so-called Third Wave is robust, as our (middle-class) incomes are rising still. A recent Federal Reserve Bank study notes, "Economic doomsday stories have proliferated from superficial analyses based on aggreg ated wage and income statistics. A careful…examination of the data that takes into account just a few of the surrounding factors…brightens the picture of Americans' progress in living standards."

Indeed. When you toss in the rise in benefits, the decline in family size, and product-quality improvements, real median U.S. income is at record levels. "Baby boomers," writes The Washington Post's James K. Glassman, "have inflation-adjusted incomes that are 50 percent higher" than their parents.

Much of this gain has been achieved through corporate downsizing. Fortune 500 employment is substantially down since 1970–in absolute numbers–despite a 67 percent increase in U.S. jobs. Growing small and medium-sized firms are able to make better use of recycled talent. The food chain reverses: The little fishes are gorging on the killer whales.

Many have drowned in heroic attempts to rescue the big fish. Take Germany. Workers at large firms there have rights–they can't be tossed away like yesterday's news. Small problem: German companies never procreate. While the U.S. economy was hatching about 27 million new jobs (net) from 1979-1995, the Germans (not counting the annexation of East Germany) were roughly celibate. Today the U.S. unemployment rate stands at 5.8 percent compared to 10.3 percent in Deutschland. Employers there are using offshore labor, automation, temporary immigrants, and part-time employees to dodge the "tough" regulatory measures that those who feel the workers' pain are poised to enact here.

Robert Crandall, an economist at the Brookings Institution, notes that the save-jobs-via-regulation mentality is similar to "telling prospective employers that they must commit to hiring you for your entire working life, paying you an ever-increasing real wage." Wait by the phone, and choose wisely among your many offers.

Bob Dole, running for president of these United States, desperately needs to stand for something. Why not try principle as a campaign gimmick? Opposing both socialism and nationalism for the lofty reason that they would wreak havoc upon the average working stiff would be a pretty good place to start. And it would pin Pat Buchanan's suspiciously anti-American message to just its appropriate spot on the geopolitical spectrum.

Contributing Editor Thomas W. Hazlett ([e-mail]), an economist at the University of California at Davis, is a visiting scholar at the American Enterprise Institute.