CAPITAL COLLAPSE: OR DON’T FEAR THE SHENZEN (Rand Paul economics)…

Salon is having an apoplexy because of Rand Paul’s plan of instituting “economic freedom zones” if he’s elected. And Salon’s not alone, commentators are even going as far as invoking Pinochet’s Chile.

First, let’s take a look at Pinochet’s Chile, wherein the Chicago Economic School got a chance to institute it’s most grandiose plans of privatization and deregulation. The economic experiment also occurred during the throbbing backbeat of political terror and disappearances. This has lead many, Naomi Klein most prominently, to the conclusion that you can’t have neoliberalism without terror.

I’d in fact argue you can’t introduce any new ECONOMIC REGIME without terror.

Communism was a new economic regime and terror certainly followed: Lenin, Stalin, Mao, Pol Pot, Ceausescu, the list goes on…The problem is the Chilean miracle — as it’s called by both admirers and detractors — occurred during a Rightist/Militarist COUP and didn’t promise UTOPIA, it just promised balanced books and budgets. Hundreds of millions can die for ECONOMIC UTOPIA, but if one person is harmed while a country gets their fiscal house in order — the LEFT cries TERROR.

Now. Would I want to live in Pinochet’s Chile or Stalin’s Russia or Mao’s China? Absolutely not. But I’d like people to draw the equivalency between the two.

But back to Rand Paul’s “Economic Freedom Zones”. He’s actually presenting the OPPOSITE. He wants the government NOT BE INVOLVED. So TERROR will be unlikely. Another reason terror’s unlikely: he’s not changing the economic regime. There is NO ECONOMIC REGIME in half these cities anymore. Unless you count DEBT as an economic regime.

Furthermore, “Economic Freedom Zones” aren’t that wonky of an idea. In fact, some innovators and educators who are considered highly perceptive and visionary have floated a version of the same idea.

PAUL ROMER (of New York University) and PETER THIEL.

So let’s just consider that Salon et al…are freaking out over the concept because RAND PAUL (a REPUBLICAN) suggested it and not because it’s inherently EVIL.

And one more closing note: Guess what just happened in an “economic freedom zone” in China. They invented a breakthrough Cancer drug. The U.S. was recently called out for falling dangerously behind in R&D and invention of new pharmaceuticals (by the New York Times no less).

Maybe if we unleashed Detroit, as Paul’s plan suggests, something visionary could occur. It might not be immediate. China’s Shenzen cancer drug took close to 14 years. But at this point, we know what doesn’t work: Stimulus and Fed Interest Rates. They’ve both had close to 6 years to kick in.

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