The author with his jaded view of our society fails to mention the real and
ominous inflation rate that is becoming more apparent daily despite Washington
trying to spin the rate differently.He also failed to mention the burgeoning
national debt. Two factors that combined with an entitlement minded population,
that largely thinks big government should cradle them to grave on the backs of
the responsible, does not portend good times ahead for America.
Consequence, No one is responsible for their actions.
It's called HopeAndChange.
I think the most likely explanation is uncertainty of government tax and
spending policies. In the Rational Expectations school of economic
thought, when government accumulates a large amount of debt, instead of treating
this like a free lunch citizens will forego investing and hoard cash under the
expectation that these funds will be needed (i.e., taxed) to pay down the debt.
If this is true then the sooner we return to the Clinton tax rates
the better. And if we can ever find the political will to shore up our
entitlements (which really means reducing healthcare costs) and reform the tax
code, this Bush created debt can be paid off and investments will soar.
Tyler D,The problem with Rational Expectation is we are being
constantly schooled (at least recently) to expect the irrational . . .
I think this discussion is a very important discussion to have because without
the proper language it's virtually impossible to discern and analyze
reality. Just look at the first two comments on this thread, immediate imbedded
ideological reactions to a call for something new. I don't
think there's any question that we are in new economic territory for anyone
born after 1940. We have unprecedented inequality, unprecedented debt (both
personal and public), unprecedented wealth creation along with unprecedented
dependency on public safety net programs, unprecedented low population growth,
unprecedented demographic changes, and I could go on for the full 200 words.
The point is this isn't 1787, 1942, 1952, or 1982, this is a new reality a
reality that demands a new economy and until we start to face this, as Samuelson
suggests we're just wandering in the wilderness.
Re: "We have unprecedented inequality . . . ."Yeah,
unprecedented in it's tiny, tiny amplitude.For the first time
in American history, real differences in lifestyle between the richest and
poorest among us are so unremarkable, it would astound our ancestors.Today, the only Americans in serious danger of starvation are those being
abused and those suffering from anorexia. America's poor are as likely to
have a decent place to live, indoor plumbing, hot and cold water, televisions,
refrigerators, cars, and access to recreation as the wealthiest Americans.Wealth redistribution occurs an a breathtaking scale in today's
America. The most productive Americans are being penalized to subsidize the
least productive to a degree unimagined even 20 years ago. Thankfully, there are
more of them than ever before.Unless the abortive launch of
Obamacare results in a well-deserved reversal of its flawed, unsustainable,
ultimately dangerous health policy, it'll only get much, much worse.Yet, leftists' shrill, disingenuous bleating still centers about
the "unfairness" of one person having one or another unimportant bauble
that another doesn't.Not because there's any actual
inequality, but simply for political advantage.That's just sad.
Median household income fell for the fifth straight year in 2012,(latest
available figures) the Census Bureau reported, to $51,017. That was the lowest
annual income, adjusted for inflation, since 1995. The government may not call
this a recession, but it absolutely is not growth!
We dont need sophisticated "proper language" gentleman to turn this out
of control government around. We need statesmen who will tell the people that
this nation is virtually broke! We need conservatives to start trotting out the
propaganda machine like the libs have done so well the past 50 years and let the
people see where we are headed if we dont start taking some responsibility for
our own actions.Let them know the history of other countries who have let their
entitlements get away from them. For a closer look tell the people to even look
at bankrupt cities like Chicago, LA and numerous other cities in America being
run by liberals.You can call these comments idealogical or what ever makes you
feel better but when we are both standing in a bread line someday because taxes
and inflation have ravaged our economy, I think our ideologies will be the same.
The "inequality" crowd wants to redistribute wealth on the basis of
their perception of what is "fair".They constantly try to
paint a picture of modern day America as functionally equivalent to the climate
of France during the revolution described in "A Tale of Two Cities".
They want you to believe that wealthy people today are exactly like the French
Aristocracy who drove around in gold plated carriages while vast numbers of
"common folk" starved to death.We don't have a caste
system today. The poorest among us may very well be the richest in just a few
years. Poor people today often enjoy a quality of life that was unimagined by
wealthy people just a few centuries ago. Obesity, rather than starvation is the
bigger health problem among the poor.If I have everything I need,
why should I care if somebody else has twice what I have (or 10 times, or even
10000 times). Envy and theft are not noble traits even when directed at all
those "evil rich people".
procurodalfiscal, "For the first time in American history, real differences
in lifestyle between the richest and poorest among us are so unremarkable, it
would astound our ancestors."That actually is true thanks to the
new economy that was created after WWII and lasted until the mid 1980's.
The problem is that economy of value production and CEOs making 20 times what
the worker made is at best on it's last legs and more likely gone. Now we have nearly 50 million people depending on food assistance
programs not to starve (your anorexia statement is ridiculous), it takes nearly
2.5 people working in a household to maintain a sustainable living standard, and
we have the largest employer in America holding charity food days for their own
employees. The entire economy has been twisted to favor a very few.
When the top 1% have wealth gains of 200 to 300 percent and the bottom 90
percent are losing wealth just how long do you think that goes on when the
difference is being made up by government support? Somehow you all
don't make the connection between the plight of the top 1% and the plight
of the bottom 80% and the whole "wealth redistribution" issue.
Pragmatistferlife: We have a record 90 million people on food stamps largely
because we allow it. Everytime they eat a meal you or I are paying for it. How
about sending those 90 million out to work daily in some kind of service and
make them earn it? How many churches,charities or parents would help the poor if
we kicked the goverment out of it? I guarantee these groups would manage the
welfare of the poor a lot better than government does. You seem to have a real
problem with capitalism like most socialist minded folkes. Stop telling us how
evil rich CEO's are, the free market always determines how much somebody
deserves to be paid.
@Patriot – “We need conservatives to start trotting out the
propaganda machine”How about just a robust exchange of ideas
and let the people decide which direction they want to go? Sounds better to me
than what the Germans were doing in the 1930’s.@pragmatistferlife – “Somehow you all don't make the
connection between the plight of the top 1% and the plight of the bottom 80% and
the whole "wealth redistribution" issue.”Excellent
comment!And all we have to do is go back the Gilded Age
(pre-1930’s) to see what our society will look like if we take the
conservative policies to their logical conclusions. @procuradorfiscal actually makes a great (unintended) case for why the
policies started under FDR are necessary at a time when the rich are doing so
amazingly well – they sure aren’t pumping all that hoarded cash into
jobs though, at least not jobs in this country.
I am a retired economics professor who has taught the established economics
gospel all of his life as per the will of his employers. But I also have a keen
appreciation of Marx's theoretical system. I continue to contend that a
major problem for economics is that discipline's refusal to let Marx into
the fraternity. Marx's model of surplus value and capital accumulation is
essentially correct in my view. Marx's absence in the current economics
scene has permanently crippled the discipline. Economics indeed needs a new
vocabulary - the vocabulary and concepts of Marx.Of course I will
get the usual flack about what a flop the Soviet Union was, and what a flop Cuba
is, etc. But all are beside the point. Marx was a western economist, the last
of the classicists, with a uniquely important theoretical model. Because of the
cold war he is absolutely taboo. This I understand. But as Freud is to
psychology, Marx is to economics. Economics will continue to be laughing stock
until he's allowed in.
@Patriot – “How many churches, charities or parents would help the
poor if we kicked the goverment out of it?”Not nearly enough
to keep millions out of abject poverty, especially given today’s current
church membership numbers (i.e., lower than 1930 which couldn’t keep
millions of elderly out of poverty).@marxist – “I
continue to contend that a major problem for economics is that discipline's
refusal to let Marx into the fraternity.”Besides the obvious
reasons you mention I think this is because Marx was less an economist
(certainly in any applied rigorous sense) and more a political theorist as well
as an iconoclast.But even as an economist he held some deeply flawed
axiomatic assumptions – namely, the labor theory of value and his lack of
understanding of how ideas and entrepreneurial skills contribute value.On top of that, he completely misunderstood human nature - how we respond to
incentives and how our positive (creative) impulses contribute to economic
output. Marx would be lost trying to explain today’s information
economy.Like Freud he was a good writer but also like Freud his
ideas are largely discredited.
Marxist,You overstate his importance. Freud was the father of
psychoanalysis. Adam Smith was the father of modern economics. Whatever place
Marx might or might not have, it is in clear second position to Smith.
Re: "But as Freud is to psychology, Marx is to economics."If
by that you mean, thoroughly and irretrievably discredited, I'm with
you.I've said it before -- it never ceases to amaze that
otherwise intelligent people would continue to espouse a theory that has such a
long and gory history of failure.It seems the height of liberal
hubris to suggest that, even though marxist theory has resulted in death,
destruction, and chaos EVERY time it's been tried, the past is somehow
irrelevant and that history obliges us to try it again in America.Do
modern American liberals really believe they're that much better, brighter,
more insightful, more compassionate, or more righteous than their Russian,
Chinese, North Korean, Cuban, Romanian, Yugoslav, Bulgarian, East German,
Burmese, Vietnamese, Bolivian, Venezuelan [etc., etc.] counterparts?If so, how so?
Here's one piece of economic vocabulary that explains what's
happening, but we rarely hear anyone put the blame where it belongs: The Federal
Reserve.The federal government could never have accumulated debts of
the magnitude that the US now holds without a central bank to be its "buyer
of last resort." The Fed caused the Great Depression, it caused the 1970s
Stagflation, and it has only become worse since Alan Greenspan's
appointment during the Reagan era. The past 6 years with zero interest rates
have caused massive speculation. The Fed tells the world untruths about the cost
of money, the cost of risk, and how to allocate capital. Wall Street wins, Main
Street loses--over and over again. Getting the Fed out of the financial markets
is the only way to put free markets and genuine wealth creation back into
RE: Tyler D "Besides the obvious reasons you mention I think this is
because Marx was less an economist (certainly in any applied rigorous sense) and
more a political theorist as well as an iconoclast." Most people have no
idea what Marx was about as an economist. "Capital" Marx's most
important (but not only) work is of the highest rigor. Joan Robinson, the
famous "Mrs. Robinson" of economics, also thought so BTW. I repeat,
Marx is unknown in American economics and by the public in general. He needs a
hearing. What's the risk?
Moreover, we of the Wasatch Socialist Party intend to provide the economist Marx
a thorough airing, since the economics fraternity hereabouts won't.
We're willing to take our lumps in the process. This is important. Stay
I'm no Marxian economist but I was the beneficiary of having taken a number
of economics classes from dyed-in-the-wool Marxian economists, and I
wholeheartedly agree with "Marxist"'s observation that we're
less well off in explaining reality because of the lack of a Marxian viewpoint
in the political mainstream.It's obvious that the Soviet and
Cuban economic experiments failed, and in terms of finding a better way, the
"real" socialists have failed.But the Marxian background I
got in college was hauntingly predictive of the struggles and issues we see
today in how Capitalism functions.American visionaries such as Teddy
Roosevelt and Henry Ford, who recognized the destructive potential in our system
and promoted humane "softening" of the hard edges are the examples to
follow, in my judgment.The raw forces of Capitalism too often twist
people, and turn good people into swindlers. We've all seen a corrosive
effect on society and the individuals who compose it, without a doubt.The answer is not to throw out Capitalism altogether, but to tame it, and make
it serve the interests of human beings, and not the other way around.Easier said than done, granted.
Patriot, " How about sending those 90 million out to work daily in some kind
of service and make them earn it" This comment is not just offensive from a
reality perspective, it is massively uninformed. You insinuate (kind turn of a
phrase) that those who receive SNAP are lazy sit on their backside takers. Here's the facts from the office of budget and policy.."The
overwhelming majority of SNAP recipients who can work do so. Among SNAP
households with at least one working-age, non-disabled adult, more than half
work while receiving SNAP — and more than 80 percent work in the year
prior to or the year after receiving SNAP. The rates are even higher for
families with children — more than 60 percent work while receiving SNAP,
and almost 90 percent work in the prior or subsequent year. "This denigration of the working poor is the very reason you won't see a
Republican President until you give up this fantasy. These people can and do
vote. They aren't looking for "free stuff" they are looking for a
hand while they work for poverty wages.
I find all this "ideologically" based rhetoric most amusing. Somehow,
the belief that if we just had different people in office, the world dynamics
would radically change. Today I just reviewed the hiring request of one of the
companies I do work with to assess skills gap. This list of open, unfilled
positions was 23 pages long. These were all well paying jobs, some
six figure in size. Most of these jobs will be filled by people not from the
United States of America - because they can. This false sense of security we
lulled ourselves into, that we don't any longer need to be competitive with
our global trading partners, that business will just flow our way, is a myth
that is being busted in front of us. US growth will not continue just because
we have some manifest destiny. America is still dominant in many
industries, but our lack of innovation will not keep us ahead for long. Many
countries are investing huge amounts on competitiveness. There used to be two
countries with space programs. Now more than a half dozen, and growing.
Meanwhile, fiscal conservatism has stripped off funding for pure science as
being wasteful pork spending.
What we are seeing today is a cartel formed by the Federal Reserve, their
associated banks and the Treasury Department. They have virtual control of the
economy which can accurately be labled "crony-capitalism." The banks
that were too-big-to-fail are now even bigger and more dangerous than ever. They
have become their own state within a state that exists above the laws that apply
to everyone else. They are the "untouchables" out of the reach of all
branches of government. When the system finally implodes, look no further than
the crony-capitalist cartel for the reason.
@UtahBlueDevil "Somehow, the belief that if we just had different people in
office, the world dynamics would radically change."What matters
most is the ideas in the heads of the people in office. Obama's
HopeAndChange turns out to be nothing but stale, discredited 1970's
liberalism. Why are we surprised to find ourselves in a repeat cycle of Jimmy
Carter malaise?From Cash-for-Clunkers to Porkulus, his ideas have
led to all these unforeseen, negative consequences. (Unforeseen to him.) How
many times to we have to endure watching him "pivot to jobs" before we
conclude that he doesn't know the first thing about jobs? He doesn't
know much about anything -- he's only a community agitator who got promoted
above his level of competence. Now he has gained control of one-sixth of the
economy, and made a shambles of it.All this came about because he
was pursuing erroneous ideas. Ideas have consequences. Centralized control of an
economy doesn't work. No individual or elite group is smart enough to make
personal decisions for 300 million people. The people are better off deciding
things for themselves.
@Nate... back your comments with some facts. Show me how the economy is in
shambles. Show me how Utah's employment or economic picture is worse than
it was when Obama took office. Show us something more than just opinion based
rhetoric. Show us these "unforeseen, negative
consequences".... what are they? Back them with something other than
opinion.Feel free to live in a world where you think cowboy
economics can compete on a global competitive stage. Good luck with that one...
I wish you the best.
Listen to SEY, he has presented the entire problem in a nutshell...not to
mention a the most important economic vocabulary which should be hearkened to by
all. If you think SEY might be on to something, I'd suggest David
Stockman's The Great Deformation for further reading.
Can we please have an economic discussion which does not end in conspiracy
theories with the Fed acting as the Illuminati?Overall, our economy
has been much less subject to boom and bust since the days of Marriner
Eccles.The current problem was, in part, due to the chairman
drinking the bilge water of markets always regulating themselves.And
they do. After the fireball (and assuming you live through the fireball).We need to go back to having a steady hand at the tiller with neither
too little nor too much regulation.
Semi-Strong: it's possible to have an economic discussion without involving
the Fed as long as you want to pretend that they're not controlling the
economy. You won't have your ideal captain with a steady hand at the tiller
because any captain will be bought and paid for by the crony-capitalist cartel I
@UtahBlueDevil "back your comments with some facts....Show me how the
economy is in shambles."There's a link up top that says
"Return to article." Follow that, if you need to review what we're
all talking about today. Specifically, "the unemployment rate has exceeded 7
percent for almost five years, despite the withdrawal of millions of discouraged
workers from the labor force. Moreover, public attitudes have become deeply
pessimistic...." Krugman is talking about "depression-like
conditions" that might last for decades.My previous comments
assumed everyone did the reading."Show us these
'unforeseen, negative consequences'.... what are they?"Cash for Clunkers hurt the poor by removing from the market the only cars they
could afford. Porkulus failed to stimulate the economy and flushed a bunch of
money down the green energy toilet into companies that went bankrupt, creating
excessive debt that put a damper on investment and job creation. Obamacare made
health care unaffordable for the young and healthy who are expected to pay the
tab for everyone else. The "one-sixth" reference was to health care,
which I suppose you think is going swimmingly. It's not."cowboy economics"In practice, liberty beats central
planning every time.
Hard to predict how things would have been but for X, Y, Z (counterfactual), but
I would guess that without the Fed, our economy (which by extension now means
the global economy) would look similar to what we had in the late 1800’s
early 1900’s – regular panics, devastating booms & busts,
banking failures. The rich (so long as their wealth is not all debt
financed) have always weathered such storms, but many of the rest of us,
depending on forces totally out of our control, would be wiped out regularly
– goodbye retirement savings, college funds, home equity, etc…I’m glad we have the Fed, especially with today’s political
gridlock – given our partisan divide, without the Fed we would likely be
in the middle of a full scale depression. And the issue of banks
being too-big-to-fail notwithstanding (I agree with SEY), I’m not sure how
the Fed is the engine of crony-capitalism given that QE simply greases the
wheels of the entire machine.
I'd like to understand how claiming that the Federal Reserve controls the
economy is a conspiracy theory when the following facts are indisputable:--The Fed has the lever to create (out of thin air) money (money
supply), which is achieved through lending it to the government and FED member
banks. --All money in circulation is borrowed from the FED. In this
way the FED controls all lending of its FED Reserve notes.--The Fed
has the lever of interest control over all money, directly and indirectly
through their "FED rate," which is the FED member banks borrowing rate.
All borrowed/created money from the FED has an interest rate attached.--To control the economy, which is based upon the cost of its money supply,
all they have to do is raise or lower interest rates which in turn increased or
decreases lending. To drive the economy up, they reduce interest rates and free
up lending (supply). To create a recession, they do just the opposite. The best example of how this works is to take a good look at our current
@nate…. all you did was provide more opinion unbacked by a single number.
Not a one. ""depression-like conditions""….
he was talking about 20 to 30 percent unemployment. If anyone things that
Utah's 4.7 percent unemployment is depression like…. then they are
suffering from too much hype, and too little reality. Even at 7 percent, it is
hardly unprecedented or exceptional, and fall well short of "depression"
levels. Just because people feel a certain way, doesn't mean it is true.
Go to your local mall on a saturday, and tell me there is a problem with
people not shopping. The problem is how people do things is
changing - regardless of administration. Black friday in store numbers were
off…. but web sales were through the roof. Those chronically unemployed
now are those who simply lack skills, not that there aren't jobs there.
Even if we had Ronald Reagan in office, he would not be able to turn back this
tide.Americans are going to have to compete harder for jobs…
your job competition isn't across the street, but is in India, China,
Japan, Brazil, Israel, Russia, Czech Republic…. get used to it.
It has been argued that we have a centrally planned economy NOW, but that it is
managed for the benefit of the few, the top 1%. Here's how it works. The
heart of the modern American capitalist system is the banking system, and the
heart of the banking system is the quasi-public Federal Reserve System (the
Fed). The Fed controls the money supply (central planning if there ever was).
When the banking system got itself in trouble by marketing phony securities, and
collapsed cutting off credit to everybody; the Federal government and the Fed
rescued the banks by buying stock in them and by flooding the system with newly
created money (still going on, loaned to the banks at little or no interest.
This saved the banks and likely saved us from Great Depression II, but little
has trickled down to the troops. The stock market soars and things are great at
the top with soaring profits and an increasingly top heavy distribution of
wealth and income.This can't go on indefinitely. We socialists
also believe in a degree of central planning, but we think that planning should
benefit the masses of people. The clock is ticking.
Nice to see marxist get something right. What he doesn't understand,
however, is that a planned economy of any degree is doomed to muddle along if
not eventually fail. That's where we are right now precisely because of
central planning. NO ONE, including brilliant Nobel Prize winners or all-wise
Marxists are capable of planning better than individuals making their own
economic decisions. If you want to understand the futility and wrong-headedness
of bureaucratic central planning, read Ludwig von Mises. He's had it right
for over 90 years. It's way past time for the US to apply his insights.
Tyler D is grateful to the FED for keeping us out of panics, booms & busts,
bank closures? From losing our retirement regularly? The worst boom/busts,
depressions, recessions, and bank closures have come *since* the creation of the
FED. The FED is *responsible* for them!We would not experience such
dramatic economic swings were it not for monetary policies of the Federal
Reserve that distort real prices and encourage high-risk, high-leveraged
investment decisions. Boom and bust cycles and the bank closures they
precipitate are inevitable when government interventions confuse market
@UtahBlueDevil "all you did was provide more opinion unbacked by a single
number. Not a one."That's odd. I distinctly remember
sending you a 7 and a five."Even at 7 percent, it is hardly
unprecedented or exceptional, and fall well short of 'depression'
levels."Take it up with Paul Krugman. I know his statement was
probably a case of inadvertent friendly fire. Doesn't he have a Nobel
prize, or something?You've been mighty short on numbers
yourself. I do keep seeing 4.7. Were you thinking Samuelson's article was
only about Utah?"Those chronically unemployed now are those who
simply lack skills...."Okay, progress. You admit that there is
chronic unemployment. The modern welfare state is one of those bad ideas that
produces chronic unemployment and people lacking in skills. It does a very poor
job of preparing people for the economic competition you've been talking
about. The human spirit needs more than just an unemployment check and an
Obamaphone. It needs a renewal of freedom, and will stay depressed until this
Re: UtahBlueDevil (12/3) Because most people have been conditioned
into thinking it’s the pinnacle of success to make a boatload of $ by
working only 4 hrs a day.Re: Semi-Strong (12/4)The Fed
was created in 1913 and look at the economic cycles since. For giggles, look at
the economic cycles prior to 1907 which was the crisis that was responsible for
the Fed Creation. If you honestly think that it was all sunshine & lollipops
on Jekyll Island in Nov 1910 then you need a reality check.
@Nate - "Doesn't he have a Nobel prize, or something?"So does Obama... and your point is?At a high level.. I agree with
your comments... but then you throw in silly talk radio/FoxNewsish statements
like "Obamaphone" and then we fall all the way back into school ground
name calling. There is no Obamaphone... that programs has been in place for
decades. It has been on everyone's phone bill since I was a small kid many
decades ago. If we can stick to working on problems, rather than
pretending these are all issues that magically arose in the last 5 years... we
might be able to get somewhere. But once it slips down that slimmy path of
partisan politics, we get dug into the mud where no one is able to get ahead.I agree... we need to get americans off of the "system", and
hungry to get ahead like they are in other parts of the world. We need to
convince certain segments of society they can win, and must win. How we do that
though... is a matter of debate.
SEY,The Fed certainly influences but does not control the economy.
Never has.Mister J,Hence my reference to Marriner Eccles
who began his tenure in 1934. The Fed was significantly strengthened during his