National Catholic Register


Pat Buchanan’s SOS for America

BY David Peterson

July 12, 1998 Issue | Posted 7/12/98 at 2:00 PM


The Great Betrayal by Patrick Buchanan (Little, Brown and Company, 1998, 328 pp., Hardcover, $22.95)

Nearly everyone has taken notice of America's great economic miracle. The Dow Jones index has skyrocketed past the 9,000 mark, the Gross National Product (GNP) has reached record levels, and both unemployment and inflation have all but disappeared. The entire scenario would seem to suggest that the free market advocates have settled the economic debate in their favor. But one quixotic conservative believes that the apparent prosperity might be just grand illusion. Indeed Patrick Buchanan is warning the American people that we might be sailing along like those ill-fated Titanic passengers, oblivious to the iceberg that lies submerged in the path just ahead.

Buchanan's provocative new book, called The Great Betrayal, aims to shatter many of the media's claims about America's current prosperity and to jump-start a discussion of critical economic and strategic questions. The subtitle of the book reads, How American Sovereignty and Social Justice are being sacrificed to the Gods of the Global Economy, a theme that harks back to Buchanan's controversial bid to become president in 1996.

Buchanan maintains that current U.S. economic policy primarily serves an elite of super rich corporations and investment bankers. Surprising as it may seem, Buchanan's figures show that one result of the economic boom is that Americans are becoming more and more impoverished. Real wages of American workers dropped 19% from 1973 to 1994. Such a sustained period of declining real wages has never occurred before in our nation's history—even including the Great Depression of the 1930s.

Although there have been millions of big winners in the great economic lottery, there are just as many big losers. These are the “victims” of the recovery: a growing number of the middle-class and other working people who were downsized due to the drive for corporate efficiency and profitability.

“In order to stay above water,” Buchanan writes, “American men are working 140 hours longer every year than in 1982 in addition, while only 20% of women with children under six were in the workforce in 1960, now two-thirds of such women are employed.” These conditions were made necessary by the erosion of workers'real wages and are a recipe for domestic turmoil and increased social breakdown.

Buchanan points out that global trade deals such as NAFTAand GATThave added “hundreds of millions of Latin Americans and Asians to the labor pool of industrial democracies.” These new workers in the global hiring hall have one trait in common: “all are willing to work for a fraction of the wages that an American needs to feed, clothe, house, and educate his or her family.” For many leaders of corporate America this is an ideal situation. In the words of Stanley Mihelick, executive vice president at Goodyear, “Until we get real wage levels down much closer to those of the Brazils and the Koreas we cannot pass along productivity gains to wages and still be competitive.” In the knowledge industry, which includes people like authors, economists, lawyers, bankers, and computer technicians, wages continue to rise. It is workers in America who are paying the price for free trade.

The Great Betrayal quotes social critic Christopher Lasch about the immense fortunes of the modern elites. They are “more concerned with the smooth functioning of the system as a whole than with any of its parts. Their loyalties—if the term is not itself anachronistic in this context—are international rather than regional, national, or local…. The privileged classes in Los Angeles feel more kinship with their counterparts in Japan, Singapore, and Korea than with most of their countrymen.”

According to Buchanan, many aspects of the globalized economy are at odds with America's Judeo-Christian heritage and violate the spirit of the papal encyclicals such as Centesimus Annus. In the same vein the most recent 25 years of free trade reforms and market deregulation have many serious drawbacks that have not been considered by the two major political parties. He says the example of Great Britain should serve as a warning to America. Once the world's foremost industrial powerhouse, she has been reduced to an impoverished and third-rate nation after adopting pure free trade in the early 1900s. The author points out several ominous crises that have yet to be addressed. These include:

• America's trade deficit has ballooned to a record of almost $200 billion in 1996 and totals $2 trillion since 1980.

• Our manufacturing and heavy industrial capacity is vanishing.

• America now has the highest income inequality among all the Western nations.

To be certain, the scenario Buchanan presents is designed to shock people into action. His analysis may be too pessimistic and he may be overlooking the beneficial aspects of the technologies and innovations that are being introduced. Various features of the communications and computer age would appear to put this country in an ideal position in the emerging global marketplace.

Writing in The Wall Street Journal, Albert Hunt tells us that “It took over half a century for electricity to produce maximum efficiency, thus only recently is America's $2 trillion investment in computer technology starting to produce real productivity improvements.” This gives the United States a tremendous head start over everyone else. Hunt contends “The global economy is a great boon to the ingenuity, skill and mobility of Americans.”

Whether Buchanan's dire warnings will prove prophetic, only time will tell. However, it seems undeniable that for America to make the most of our extraordinary resources and capabilities, we must be prepared to negotiate sensible trade treaties with our allies in Europe and with the countries of the developing sector. The Great Betrayal maintains that any such treaties must preserve our sovereignty; that is they must employ market forces as a tool and not a panacea.

To make this clear, Buchanan points to the voluntary import quota that Ronald Reagan negotiated with the Japanese during the 1980s. The policy was an intelligent intervention that gave the big three U.S. companies time to improve their product without throwing millions of hard-working Americans on the scrap heap. Such a nationalist approach as is used in Germany and Japan could be applied today to promote and protect the nation's vital interests.

Buchanan should be commended for his courage in daring to challenge the media elite and the powerful financial oligarchy. We need to reassess many aspects of what the Federal Government and the business community mean by global development and economic progress. The author believes we must apply a standard of justice, fairness, and common sense. Our policies should emphasize ordinary American workers and their families as opposed to the wealthiest 5% of the population who have reaped virtually all the income gains of the past 25 years. Whether or not you like Buchanan's abrasive style this is an unusually candid and illuminating volume.

David Peterson writes from Chicago.