The Nightmare of Camelot, by Gus Stelzer (Softcover, 2004)|
(You can print this review in landscape mode, if you want a hardcopy)
Mark Lamendola, MBA, author of over 6,000 articles.
Stelzer based this book on six economic laws. He refers to those laws while building his arguments and when analyzing or interpreting information. The laws themselves are immutable and well-supported. To give you an idea of what laws he's talking about, here are two of them:
- Economic Law #2: Production creates wealth; Consumption dissipates wealth.
- Economic Law #5: If you want more of something, subsidize it. If you want less of something, penalize it.
Many people don't realize a point that is at the heart of much of what Stelzer talks about. That is, taxes invariably show up in the cost of products and services (the only way that point could be false is if money grows on trees). Stelzer expands on this basic concept to show that taxes, regardless of their form, put a disproportionately heavy burden on those who occupy the lowest economic rungs.
The Nightmare of Camelot focuses on the misconception that "free trade" exists. Once you understand the six economic laws presented at the beginning of the book, you can follow Stelzer's logic to see it isn't so.
But, isn't free trade a laudable approach that will bring lower costs to everybody? In theory, yes. However, you must consider the fact that each nation has its own regulations and taxes that show up as component costs of its products. Companies in other countries do not make their products under American laws and they do not pay American taxes.
Stelzer correctly pointed out (and proved) that the costs of government (taxes and regulations combined) comprise about 80% of the cost of an American product. He goes on to say that in other countries, the cost is much less--and thus there isn't a level playing field.
Legislators in other countries are not as regulation-giddy as they are in the USA, so no other government in the world has our insanely high level of regulations. The United States has the largest body of regulations of all nations. Stelzer doesn't bring this fact up, but at the time this book was written the Code of Federal Regulations was so massive that its index alone was 65,000 pages--the size of our Internal Revenue Code. Compliance costs are enormous.
Driven by lobbyists, federal legislators cause the USA federal government to burn through more money than any other body in the world. The USA spends more on our military than the next five nations combined. It also has enormous, useless bureaucracies that simply consume tax dollars. The pork barrel spending alone exceeds the national budgets of several major countries.
This is why Stelzer is correct to say we should level the playing field. He recommends tariffs for that purpose, and his arguments are compelling.
Unfortunately, Stelzer also indicates that it's pointless for the American taxpayer to insist on responsible behavior on the part of those who (over)spend our tax dollars. That is, he pooh-poohs reductions in federal spending. He does this mostly on the grounds that fighting for such reductions is a losing battle. He inconsistently adopts a defeatist viewpoint for spending reduction, while taking the opposite stance toward such things as raising trade tariffs. Is the "it's too hard" defense sufficient grounds on which to let politicians pretend our money grows on trees? Stelzer seems to think so. Is a demand for fiduciary responsibility mutually exclusive with any of his recommendations? He doesn't prove the point, though he claims it.
Government spending and government growth go hand in hand. The federal government is now 185 times larger than it was 100 years ago. The geographic area of the USA is not 185 times larger than it was in 1907, when it had 46 states instead of today's 50. Nor is the USA population of 300 million 185 times more than its 1907 population of 87 million. Why, when in the private sector, advancements in productivity allow one person to do the job of tens or hundreds, does the federal government need hundreds of people to do the job of one?
The fact that waste, corruption, incompetence, fiduciary irresponsibility, and flagrant disregard for ethics are defining characteristics of the House of Misrepresentatives and the Senate does not mean we should just lie down (or bend over, depending on which metaphor you prefer).
The money these folks burn is forcibly extracted from us. And it's a huge chunk of our earnings. With all of the various taxes an American pays, the total tax bite works out to between 65% to 80% for the middle class American--who pays 128 different taxes on a single loaf of bread. In other countries, the tax bite is far smaller. Stelzer draws on these facts to support his view that we can't have "open borders" economically.
Stelzer explains that we don't have free trade within our borders, so having free trade across our borders violates our Constitution. What he has to say in support of this truth should be mandatory reading for anyone involved in our national trade policies. Unfortunately, those folks have a myopic agenda that is costly to implement and provides little or no benefit.
This book, which came out in 1994, never reached cult status despite the importance of the topic, the depth of the research, and the brilliance of the arguments. And the same is true of its 2004 reprinting, which is what I reviewed here. Some of the reasons are as follows:
- Errors in spelling, punctuation, grammar, and composition. Such
errors affect the degree of authority given to a work. Due to lack
of a good copy editor, Stelzer's work just wasn't taken seriously.
- Ranting. In a newsletter or public speech, ranting tends to
enhance the message if it's not overdone. In this book, it's
overdone. And in any book proposing fundamental changes in national
policy, it undermines the message.
- Repetition. Stelzer repeats himself so much that the book reads
like a compilation of newsletters or other separate works, rather
than a a cohesive work. If the repetition were removed, the book
would not be even half its present size.
- Hyperbole. Stelzer's arguments are convincing on their merits.
Unfortunately, he chose to underscore them with hyperbole. Such a
move always draws the veracity of the original statement into
question, at least to a serious reader.
- Judgment statements. Closely related to ranting, these simply do
not belong in this book.
It's a shame these deficiencies, which are mere form, has prevented widespread reading of a book that is so high on substance. I think he frames the major issues correctly, and he avoids pandering to ideology. He does, however, propose more government intervention as a solution to the problem of excess government. Coming from GM, which is a huge bureaucracy, this statist approach is not surprising.
Rather than band-aid things with a patchwork of tariffs, the real solution would appear to be going after the root cause and massively scaling back the size and cost of the federal government.
Americans who bypass the disinformation peddlers (television, newspapers, most magazines) and get close to original data or news sources (financial reports, people in other countries, reports from key people in key industries, actual figures on the subject in question) are sour on the political process in the USA, and for good reason. But we are in the minority.
Unfortunately, the propaganda machines are constantly cranking out garbage and feeding it to people. Thus, most Americans are blithely unaware of that America has slipped so far down on so many metrics. If you get the time, look at where we stand on longevity or standard of living, for example. We're forty-something on both of those, which is not something to be very proud of. Now, ask yourself why we are no longer a first-world country. If the answers escape you, pick up a copy of this book. Yes, this book is a bit on the old side. But the problems it described in 1994 are still with us today. And for the same reasons.
Einstein defined insanity as doing more of what's not working. From Stelzer's research, we can see that excessive government is not working. He denigrates the Libertarian philosophy of less government, while pushing for even more government to solve the problem of too much government.
So he has a handle on the problem. He seems to stumble when it comes to the solution. After all, if other countries can conduct their affairs with lower taxes and less regulation, why can't we? Those 40 or so countries that are ahead of us might be worth looking at for clues on how to once again rise to greatness.