Monthly Archives: November 2010
Steps through the way this hopefully would work (more detail in the link):
1. Expand the money supply, if the banks lend based on new reserves.
2. The additional money expands spending, if consumers don’t just hold larger money balances (more technically if the velocity of money doesn’t decline. If people just hold the money, this is sometimes know as liquidity trap.
3. The additional spending expands the nominal GDP.
4. The additional GDP is accompanied by a mix of inflation or expansion in real production, and jobs.
I think last step is the most problematic. At least some of our problem is that people aren’t looking for jobs in the right places. There are too many seeking jobs building houses, no one wants to buy, except as part of another speculative boom.
The effect with the people in the shot is fascinating.
I haven’t read the critique referred to and won’t comment on this now. But I thought it had some interesting points. Suggesting they are as bad as the tea party is pretty harsh.
That’s all I can say after reading this dreadful critique of Krugman’s writings on Japan that appeared on Common Dreams, along with almost 100 responses, the vast majority utterly clueless.
The original article said, in a nutshell, that Krugman shows his economist’s blinders by criticizing Japan’s fiscal and monetary policies when they enjoy low unemployment, universal health care and other good things. Japan and Germany show us the way: economic growth is unimportant, what counts is having a healthy society. Growth is a chimera in the age of sustainability, anyway. We should listen to Germany’s criticism of profligate American borrowing, rather than lecturing other countries to become dissolute in our image.
The responses, except for just a few, praised this argument to the skies.
Allow one more indoctrinated economist to make these points:
1. Japanese and German living standards depend on the debt-financed consumption of the US and other net importing countries. That doesn’t mean their social achievements are worthless—far from it—but it indicates that the sustainability problem is not all ours.
2. The Japanese have kept going through the accumulation of a massive public debt. This has been possible only because they are a surplus country, so the debt can be domestically financed without cutting into finance for private investment. In other words, the economic policies Krugman criticized have not led to a Japanese meltdown only because of global imbalances, from which they benefit.
3. Economic growth is essential. If you divide up the world’s output equally among the world’s people, it falls well short of how we want to live. We need redistribution and growth. Greening the economy will also entail tons of investment, which we will have to afford somehow. On top of this, enviro-austerians confuse the growth of value (economic growth) with the growth of stuff (physical throughput). In the economy, better is more, but not necessarily the other way around (if the costs of stuff exceed their benefits).
I hate to say this, but reading the broad swath of opinion on websites like Common Dreams convinces me that the US left is nowhere near ready for prime time. There is a flippancy and anti-intellectualism that is as immature as anything you’ll find among the Tea Partiers. Did I mention that they have a conception of economics (slash the GDP!) that will relegate them to fringe political status in perpetuity?
If you haven’t checked out documentaries on netflix lately. I’d suggest you do. They have a great selection of titles. These include most Ken Burn’s documenaries for PBS, including the national parks. If you do it via netflix online, at least on a PS3 like I did. You’ll say:
“This is GREAT!”
The second episode of the national parks is a truly wonderful story. Teddy Roosevelt actually camped at Yosemite with John Muir, largely alone. Roosevelt blew off local dignitaries in California to do so.
Isn’t that amazing? Could you you imagine any President, let alone lesser politicians doing that today? TR was a thinker but a man of bold action also. Today we have Democrats who seem afraid to be bold usually, and Republicans who seem to sneer at careful and deep though preferring shallow slogans.
Muir of course lobbied Roosevelt for preservation of wild places, with some success. That’s reflected in the large number of places that TR made into parks or national monuments. If TR isn’t a great for other reasons, the parks alone make him such.
He created a national monument to preserve the Grand Canyon stating:
Keep this great wonder of nature as it is. Do nothing to mar its grandeur, for the ages have been at work upon it. Keep it for your children, your children’s children, and all who come after you.
I suppose I’d echo these sentiments, but add this. I think these great places are creations of God. While we should admire them and keep them for our prodigy, they are not ours to do otherwise with. We are just caretakers and should give that duty our full dedication.
Genesis 1: 28
And God blessed them, and God said to them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moves on the earth.
Liberal groups in Wisconsin are bracing for a fight over contraception coverage under Medicaid. Battle lines are being drawn over sex education in North Carolina. And conservatives in several states intend to try to limit the ability of private insurers to cover abortions.
Social issues barely rated in this year’s economy-centric midterm elections. More than six in 10 voters who cast ballots on Election Day cited the economic downturn as their top concern, according to exit polls. And this year was the first in more than a decade in which same-sex marriage did not appear on a statewide ballot.
But major GOP gains in state legislatures across the country – where policy on social issues is often set – left cultural conservatives newly empowered. Opponents of same-sex marriage, for instance, now see an opportunity to block or even reverse recent gains by gay rights advocates in Minnesota and New Hampshire.
The Tea Party was successful precisely because it ignored everything but economic issues; that allowed it to unite conservatives, libertarians, and independents. The behavior outlined by the story is suicide for Republicans.
My Niece has created a new blog. Check it out. she’s very creative.
I hope I can talk my daughter to do the same thing.
This interesting in wonkish discussion, and it more existential aspects as well.
via Modeled Behavior