ORGANIZED LABOR in the United States achieved a milestone in 2009 that once would have been unthinkable: for the first time, union members working in government jobs outnumbered those working in the private sector.

Reasonable people can disagree about whether and how much the government should redistribute income. And, to be sure, the looming budget deficits require hard choices about spending and taxes. But don’t let anyone fool you into thinking that when the government taxes the rich, only the rich bear the burden.

The one point I want to emphasize is getting work done for lower prices puts more money in the pockets of taxpayers who will make far better use of it than politicians who use taxpayer money to buy union votes. It also makes projects more affordable so more of them can be done for the same amount of money.

If you use stats like foreign affiliate sales (which better reflect our modern, specialized global economy) instead of traditional trade stats (which clearly don’t), the United States “may actually have a trade surplus or a small deficit.” And yet our politicians and pundits rely on the old school stats to push their intense “rebalancing” agenda and thereby provoke international conflict. How is this a good idea?

A feature of the national character that H.L. Mencken diagnosed in 1919 likely remains no less vibrant today, for it appeared as recently as two years ago: “We are, in fact, a nation of evangelists; every third American devotes himself to improving and lifting up his fellow citizens, usually by force; the messianic delusion is our national disease.”

In short, McKinsey’s analysis demonstrates that China’s economy is not nearly as export-dependent and “imbalanced” (and China’s trade surpluses not nearly as significant) as Krugman and his fellow trade surplus disciples would have us believe. It also demonstrates that, as Dan Ikenson has often noted, the evolution of global supply chains means that RMB appreciation could make Chinese manufacturers more competitive (through access to relatively cheaper imported inputs), not less so. So here’s my question to Dr. Krugman, over 300 members of the US House of Representatives, Secretary Geithner, and the rest of the ITTSS folks out there: is it really wise to pursue aggressive unilateral (or multilateral) action against China based on obviously sketchy trade data? I dunno about you, but that seems a tad stupid to me.

If the government conscripted half of the US population to dig holes all day and conscripted the other half to fill them back in, and paid each of us a billion dollars a day for the task, and valued holes that were dug and holes that were filled in at a trillion dollars a hole, then GDP would be very very large, unemployment would be zero and there would be no stimulating effect and we would soon be dead from starvation.

And yet the book also documents the change that began to overtake liberalism in the late 19th century, all resulting from what Hans Hoppe has called the great failing of liberalism: its belief that the state could itself be made liberal, benign, and even part of the structure of society itself. And so you begin to detect a change in the narrative, all based on the myth of the possibility of good government.