Martha Range (@MartaVonRunge)

https://www.americanthinker.com/articles/2024/08/national_capitalism_national_security.html August 21, 2024 National Capitalism, National Security By William R. Hawkins The American Enterprise Institute is generally considered part of the “conservative” network of think tanks working to influence policy in Washington D.C. Founded in 1938 by executives of major corporations in opposition to the New Deal, what it mainly wanted to “conserve” is free-enterprise capitalism. I grew up as a right-wing activist in an environment where conservatism was too often identified as capitalism, with wider national concerns like morality at home and defense overseas as lesser concerns, easily jettisoned if they got in the way of doing business. However, the radical turn of many capitalists has cooled this fervor among conservatives who remember Karl Marx was funded by the industrialist Friedrich Engels. AEI has worked closely with Republican administrations and has attracted a great many influential thinkers to its ranks. During the Cold War AEI took a hard line and remains in the vigilant camp supporting Ukraine and Taiwan. A Senior Fellow with a long record working with national security organizations is Mackenzie Eaglen. She recently called to expand the U.S. military to cover “three campaigns” at once as the country continues to face threats in the Middle East while larger threats have reappeared in Europe and Asia. “The cost to strengthen our military should be considered an investment in deterrence. The cheapest war is the one we don’t fight,” she writes. Unfortunately, President Joe Biden threw away America’s legacy of Cold War victory during his first “cut and run” year in office, so wars have already broken out. Restoring deterrence will require both material and mental rebuilding to be credible. Yet, there seems to be a divide at AEI, with a “capitalism over nationalism” cadre still active. Recently, former GOP senator Phil Gramm and Donald Boudreaux of George Mason University wrote an op-ed in the Wall Street Journal which AEI distributed as Gramm is a Senior Fellow there. The title was “We all pay the price of protectionism.” The timing was interesting as Vice-President Kamala Harris has criticized once and future President Donald Trump for his tariffs on Chinese goods for rising prices for consumers. This is part of her anti-inflation campaign which ignores the actual meaning of inflation and the Biden-Harris record of generating it with trillions in reckless deficit spending on failed programs. On trade, Biden has kept Trump’s tariffs on Beijing and even added one against the import of Chinese electric cars. Trump’s tariffs, like his tax cuts (which continue to undergird the economy as they do not expire until next year), were within an economy whose inflation rate averaged less than 2% a year. As chair of the Senate Banking Committee, Gramm pushed deregulations in 1999-2000 widely viewed as opening the door to the blunders and abuses that brought on the 2007-2009 global mortgage and banking crisis, the worst financial upheaval since the Great Depression. Recovery took years and destroyed the economic lives of millions. Gramm did not run for re-election in 2002. His legislative efforts were rewarded as he became a vice president at USB, the world’s largest private international investment bank, headquartered in Switzerland. When the financial crisis hit, USB nearly collapsed and needed a government bailout by the Swiss National Bank. The old saying “hoist by his own petard” seems appropriate. But ideologues never learn from their mistakes. Gramm and Boudreaux argue from the principle that decisions made by business leaders are inherently better than those made by government officials. “Protectionism and industrial policy misallocate resources and reduce economic efficiency” they claim. As a general rule, capitalism is both the natural and superior economic system compared to state socialism. But there are exceptions to every rule and national security is a government domain situated not just outside but above that of private business. Gramm and Boudreaux never mention this, nor does China come up. They falsely claim, “the political appeal of trade protectionism has centered on its ability to benefit a privileged few special interests while spreading costs across society.” and more...