More Crazy Talk from UNM Faculty

It seems like UNM has more economically-ignorant people affiliated with it than most universities. Take Nick Estes and his recent column in the Albuquerque Journal, please. The level of economic ignorance from this former UNM lawyer and current staffer at the far left-wing Voices for Children is truly appalling.

He starts with a truthful statement about World War II and the US government running up massive deficits. It’s true. Fighting the combined forces of Hitler and the Empire of Japan cost a lot of money. The thing is that after the War, our leaders enacted massive spending cuts and the economy grew faster than ever before. Estes and his ilk would have a fit if spending dropped by 2/3rds as it did after WWII, but it did.

Then Estes goes into the farcical “we owe it to ourselves” routine. Debt is debt whether it is owed to a family member or to someone in a far-off foreign country. If that debt burden becomes too much a default is possible and those are still painful. If your cousin doesn’t pay you for the care he “bought” from you and then he crashes it and can’t pay you, you are still out the money. This is just a dumb argument from Estes.

Then Estes claims that trade imbalances, not government deficits are the real problem. REALLY. On what planet does this guy live? Nations that have major “current account balance deficits” include the USA, Canada, Australia, and England. Nigeria, Venezuela, Libya, and Iran all have major surpluses. I’ll leave it up to Estes to pick the countries he’d rather live in. Of course, these “deficits” partially represent foreign investment in firms located in those nations.

In other words, governments going into debt is bad, but so-called “trade deficits” are irrelevant as economist Walter Williams rightly points out.

The good news is that Nick Estes’ title indicates he was a lawyer and not involved in teaching economics. The bad news is that there is a clear pattern of economic ignorance from current and former faculty at UNM.