Posted on 03/03/2003 8:27:40 AM PST by AdamSelene235
Brings up another point - can we officially declare the Phillips Curve dead?
About Metcalfe's law - believe me, I wish we still had one to take advantage of. We're going to need some sort of technological breakthrough in order to take advantage of the Moore/Metcalfe infrastructure that is in place. Until that breakthrough, I fear we will not have another productivity driven economic boom.
FReegards
This statement might be expected to grate on the understanding, instincts, and sensitivities of economic conservatives in general, and supply-siders in particular (such as, for instance, Laurence Kudlow, who -- rash as I am -- I would dearly love to see seated as Fed Chair ASAP), it contains the proverbial grain of truth and the earthy grit of reality.
The "political divide" in America is a political construct which, in its turn, depends on the moral sentiments of the American people in order to be taken seriously and acted upon -- and the American people seem to have no consensus at this level of the problem at the present time. Crudely put, the "free lunch" crowd out there just naturally gravitates to Keynesianism. The main virtue of that economic philosophy is to provide "cover" for politicians to get their hands on the creatively productive national economy, to divert it to their own individual and/or collective purposes. (James Madison warned us about the "spirit of faction"...he basically said it everywhere and everytime was corrosive, poisonous, to the well-being and interest of a free people in the long run.)
The unstated (but implicit) goal of Keynesianism is to stabilize the position and influence of the "sitting" political class, by providing a "legitimate" means to transfer an ever increasing portion of the annual national economic "surplus" to political patronage purposes that benefit their class at the polls.
Thus I find it disturbing, on first impression at least, to find that President Bush has nominated a Neo-Keynesian to chair his CEA.
Yet in another way, upon reflection, it makes sense to me: The impending war (which I fully expect to take place imminently) will definitely take the national budget into serious deficits -- in this case, clearly for the general public good.
If that be the case, what better political cover can a president have, what better way to innoculate himself against his political enemies in advance, than to say that the guy who was in charge on advising him on economic issues while all this "unconscionable spending" was going on (as if Congress had no role in this) was one of their very own "tax and spenders" -- and to be able to apply this principle retroactively?
But the day this guy says to the president, "I think we need to rethink this tax cut," then that's the day I'd expect this guy to be fired. He probably already understands that. But that doesn't mean he won't say those words some day.
For President Bush has made it very plain that he believes, like John F. Kennedy, like Ronald Reagan, that the only long-term solution to the problem of federal deficits and the paydown of the national debt -- is to make the national economy larger in real terms, and more productive besides. Obstacles that stand in the way to realizing this objective -- such as counterproductive tax policies, excessive regulatory practices, and tort law that seems to be increasingly insane with the passage of time, et al. -- it what President Bush -- and we all!!! -- need to keep in primary focus, going forward into the uncertainties that lie ahead of us. FWIW, IMHO.
Thanks for this fine post, AdamSelene235.
You know that I managed currency risk for major corporations for many years and was then intensely interested in relative inflation, interest rates and economic policies in general, here and abroad. I was never able to consider myself an "expert", though -- I concluded that there aren't any.
I did, however, draw a couple of conclusions that I think are worth repeating. One was that a country's long-run level of prosperity relates directly to the integrity of its culture. I've shared this with you before. Second, there seemed to be individuals who, immersed in the data and the market, had developed an accurate feel for the general direction of the currency markets. This was rare but nonetheless real.
My comment about Greenspan is that I think he is one of those exceptional individuals, genius-brilliant, intensely analytical and with unparalleled "feel". Financial markets are exceedingly complex, as complex as human beings, and I don't think there is any one successful mode or method for forecasting or "managing" them. The rare, talented individual can, however, both cope and lead. I believe Greenspan to be such a man.
And, incidentally, I agree with you about Kudlow, also a very talented man.
...and the change to considering the income of no longer one but two members of a household, when approving home mortgages, I'd say.
Isn't that pretty close to the old, classic definition of fascism? (Not the revised definitions having to do with racism or some vague "ultra right wing.")
I see your point, Phaedrus. In order to be "expert," one must have something to be "expert" in. And that's quite an interesting subject in itself, for another time perhaps. [My hypothesis on this question: There are no experts! The world moves too fast for "expertise"!!! Find another way....]
The problem we entertain here, it seems to me, is not a problem for expertise. It's a problem for experience.
Experience is our only defense against preposterous notions such as, for instance: "The free lunch qualifies as an exercise in equal justice because it implies reparations." Go figure.
The statement is "presposterous" in exactly the same sense of "preposterous" I get from listening to the public fulminations of such eminences as Hillary! Barbra Streisand, Susan Sarandon, Danny Glover, that Garofalo person, Mikey Moore, Marvin Sheehan [:>/], yada yada.
Their new-improved gospel seems to be: "If a qualified expert didn't tell you/show you how to do this thing right (i.e., any particular thing at all you need to do to get around in your daily world), then you're probably doing it all wrong."
How this sort of sentiment affects the public weal in the short or long run seems to be an open question. Still, I must note that, to the extent we concede the "truths" of our daily self-regulation to "qualified experts," the more we surrender our own exercise of free will to strangers.
Must close for now, P. Sorry -- I guess I really did take us a bit "off-topic." Thank you so much for the lovely post.
I also appreciate your sense of W's (and Rove's) political wiles. Supporting your prognosis is that the tax cuts he proposed in the latest S.o'theU. address were made while in the thick of his CEA purging. But I'm pretty concerned about the binging (as in binge, not croon).
While war tends to be a good time for debt, it's also good time for a little taxing, or so history's leaders have naturally thought, including Washington, I think. I know that the dedicated supply side conservatives and whatever of the Libertarian/Mongoloian persuasion may be reading and writing in this thread may take offense (and I suppose that in the case of the latter, I mean it, but not personally, which would be ...postively unaltruistic).
While the Reagan cuts may have led to the 80's/90's gains and even a balanced budget eventually, that budget was of course, a raising of taxes to meet a year's debt and interest payment on top of a year's actual expense. Now, our greater debt continues to grow and that's something that needs moral assessment, too. (Yes, I know that national debt must be compared to GNP or whatever it's now called.)
I think that the measure I just heard about in Wisconsin, of penalizing companies that export jobs is interesting; would like to read more about it to see if they don't shoot themselves in the foot. More importantly, I think that while we should have 'fairly' free trade, our government should be fairly biased against allowing significant foreign acquisition of American companies! Sheesh, isn't that a part of being a nation? Adam Smith didn't write The Wealth of Multinational Corporations and God hasn't recinded his Tower of Babel injunction. I don't think I'm being too "Reform Party" here, just appropriately concerned.
It would be darkly amusing I think, to see what happens to some fatso "global corporations," if there comes the next world war.
I confess I can be a little wary about macroeconomics, anyway. Shucks, I can find it difficult just to comprehend how wealth is generated simply by the huge dog chasing it's tail that production and consumption seems to be. I suppose the difference is that the dog doesn't actually eat the tail, while investing a bit of it too.
Yes, fascism is the primary economic system in the world today. Socialism is just the politically correct name for it.
Corporatism-Socialism for the bourgeois
http://www.frontpagemag.com/Articles/ReadArticle.asp?ID=3054
It should be dead...you are right...but it still reared its ugly hed throughout the 90's. Perhaps now, it has been burried forever.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.