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09/26/2011

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Jack

Tans -- with so few days left before a new assignment, perhaps you can do a piece on why MASSIVE government deficits under "conservatives" were "right wing" "supply side job growing yadda" while the very same led by Democrats is "leftist" and "Keynesian?"

Also....... if we devised our Keynesian spurring to fatten the wallets of the already well off......... would that make it a fine conservative example of "supply side" success?

TANSTAAFL

One more day. Looking forward to informed commentary from Prof. Becker and Judge Posner as much needed relief from the leftist pap contaminating this blog in their absence. If we outsourced the leftist Keynesians to China or another socialist paradise, they could have their wish. And more jobs would open up for friends of economic liberty here in America. A win-win solution.

Jack

Tans.... with Observer, NEH and myself filling the week's void with some fairly hearty fare.... I wonder if, with but "a day to go" you might rig something up? Mebbe a Dagwood? or even a BLT on white bread? Anything?

TANSTAAFL

Keynesian baloney, perhaps? No, thanks.

NEH

Jack, Better "Keynesian Baloney" than an "Air Sandwich" as offered by the New Right in their "Affl" program... ;)

Jack

Tans? Couldn't you take a crack at telling us the diff between $12 Trillion of deficit spending under the guise of "supply side" yadda replete with seemingly unaffordable tax cuts for the wealthy pals, and Keynesian spurring?

IS it strictly the blasphemous idea of targeting those of lower incomes who have a much higher propensity to spend any marginal buck that might "trickle down" nearby?

Daniel

Perhaps another interesting question one can ask using this data: whether government-delivered services in the low-percentage countries (Singapore, Taiwan, Japan) are perceived to be signficantly poorer than those in the high-percentage countries (e.g., Italy, Greece, the Scandinavian countries).

TANSTAAFL

Which of the leftist screen names above hides the washed up comedian Al Franken?

an observer

Daniel

comparing data is basically meaningless as needs, etc.,are so different.

Jack

Tans -- not sure... but if Franken having matriculated to the Senate by the unusual method of having whipped, by an admittedly narrow margin, a sitting incumbent is evidence of being a "washed up comedian" would we, logically, agree that Reagan having matriculated to record setting D E B T builder was a "washed up actor?"

BTW... did you enjoy his book on the Lying Liars?

Jack

Daniel: We'd have to consider culture too. Comparing, for example, Japan to the US, they're committed, to perhaps a fault, to education, not prone to much illegal drug use, have much lower rates of crime and almost no homicide, (a fraction that of gun laden US), a much smaller military, far lower rates of auto use and all the policing and highway maintenance involved, and until very recently, when recession hit, they did not throw their workers to the wolves to be cared for by .......... more government workers.

TANSTAAFL

Thank heavens the Nobel Committee this year has honored two economists whose empirical work calls into doubt the underpinnings of Keynesian economics.

Jack

Tans, Indeed! And what are their "feelings" on "supply sider" deficit spending in good times and bad?

Any thoughts on revenue as a share of GDP being the lowest since before WWII? at 15% which never has paid the bills, even before our being saddled with the extra interest payments on our huge debt, 80% of which was rung up while, supposed, "conservatives" held the, rarely used, veto pens?

Do you happen onto any old fashioned conservatives who favor the timely paying of bills? being reluctant to dive into foreign entanglements and willing to pass the hat when the costs of "national defense" soar as they did during the sole source profiteering of recent years? I used to kinda like those old timers; made a lot of sense.

Jack

How about this topical article? Are the protests against WS thievery and the 'bagger movement evidence of a major shift?

Something’s Happening Here
By THOMAS L. FRIEDMAN
When you see spontaneous social protests erupting from Tunisia to Tel Aviv to Wall Street it’s clear that something is happening globally that needs defining. There are two unified theories out there that intrigue me. One says this is the start of “The Great Disruption.” The other says that this is all part of “The Big Shift.” You decide.

Paul Gilding, the Australian environmentalist and author of the book “The Great Disruption,” argues that these demonstrations are a sign that the current growth-obsessed capitalist system is reaching its financial and ecological limits. “I look at the world as an integrated system, so I don’t see these protests, or the debt crisis, or inequality, or the economy, or the climate going weird, in isolation — I see our system in the painful process of breaking down,” which is what he means by the Great Disruption, said Gilding. “Our system of economic growth, of ineffective democracy, of overloading planet earth — our system — is eating itself alive. Occupy Wall Street is like the kid in the fairy story saying what everyone knows but is afraid to say: the emperor has no clothes. The system is broken. Think about the promise of global market capitalism. If we let the system work, if we let the rich get richer, if we let corporations focus on profit, if we let pollution go unpriced and unchecked, then we will all be better off. It may not be equally distributed, but the poor will get less poor, those who work hard will get jobs, those who study hard will get better jobs and we’ll have enough wealth to fix the environment.

“What we now have — most extremely in the U.S. but pretty much everywhere — is the mother of all broken promises,” Gilding adds. “Yes, the rich are getting richer and the corporations are making profits — with their executives richly rewarded. But, meanwhile, the people are getting worse off — drowning in housing debt and/or tuition debt — many who worked hard are unemployed; many who studied hard are unable to get good work; the environment is getting more and more damaged; and people are realizing their kids will be even worse off than they are. This particular round of protests may build or may not, but what will not go away is the broad coalition of those to whom the system lied and who have now woken up. It’s not just the environmentalists, or the poor, or the unemployed. It’s most people, including the highly educated middle class, who are feeling the results of a system that saw all the growth of the last three decades go to the top 1 percent.”

Not so fast, says John Hagel III, who is the co-chairman of the Center for the Edge at Deloitte, along with John Seely Brown. In their recent book, “The Power of Pull,” they suggest that we’re in the early stages of a “Big Shift,” precipitated by the merging of globalization and the Information Technology Revolution. In the early stages, we experience this Big Shift as mounting pressure, deteriorating performance and growing stress because we continue to operate with institutions and practices that are increasingly dysfunctional — so the eruption of protest movements is no surprise.

Yet, the Big Shift also unleashes a huge global flow of ideas, innovations, new collaborative possibilities and new market opportunities. This flow is constantly getting richer and faster. Today, they argue, tapping the global flow becomes the key to productivity, growth and prosperity. But to tap this flow effectively, every country, company and individual needs to be constantly growing their talents.

“We are living in a world where flow will prevail and topple any obstacles in its way,” says Hagel. “As flow gains momentum, it undermines the precious knowledge stocks that in the past gave us security and wealth. It calls on us to learn faster by working together and to pull out of ourselves more of our true potential, both individually and collectively. It excites us with the possibilities that can only be realized by participating in a broader range of flows. That is the essence of the Big Shift.”

Yes, corporations now have access to more cheap software, robots, automation, labor and genius than ever. So holding a job takes more talent. But the flip side is that individuals — individuals — anywhere can now access the flow to take online courses at Stanford from a village in Africa, to start a new company with customers everywhere or to collaborate with people anywhere. We have more big problems than ever and more problem-solvers than ever.

So there you have it: Two master narratives — one threat-based, one opportunity-based, but both involving seismic changes. Gilding is actually an optimist at heart. He believes that while the Great Disruption is inevitable, humanity is best in a crisis, and, once it all hits, we will rise to the occasion and produce transformational economic and social change (using tools of the Big Shift). Hagel is also an optimist. He knows the Great Disruption may be barreling down on us, but he believes that the Big Shift has also created a world where more people than ever have the tools, talents and potential to head it off. My heart is with Hagel, but my head says that you ignore Gilding at your peril.

You decide.

Bryan

why does it always come down to a numbers game?

TANSTAAFL

Geez, Jack, thanks for the Friedman editorial suggesting that you are more likely to succumb to propaganda inveighing against economic liberty than I am.

Jack

Tans? In keeping with academic protocol could you please define your terms? Thnx!

TANSTAAFL

Jack, academic protocol frowns on spamming. And what definition do you seek? Is the concept of "economic liberty" so alien?

an observer

Tans

Is slavery "economic liberty"?

Is having to work at slave wages economic liberty?

BYW, FRIEDMAN is wrong here, like Malthus before him. Do you know why?

NEH

tanstaffl, "Economic Liberty"? Isn't this an Oxymoron? Especially, in a Post-Industrial Age or in the "Third Wave".

Jack

Tans?? "Antipathy to work??" It's getting a bit hackneyed after a recent revival but was Moynihan original in observing that all are entitled to their own opinion but not to their own "facts?"

Any thoughts on the entire concept of theoretical "dollars" (as compared to bartering one's production for that of another, and "capitalism" becoming so distorted in favor of the well-positioned clever, that it will soon come tumbling down as did the USSR when working folk knew they were taking a screwing but playing along as the whole thing imploded with a shrug and "they pretend to pay us, so we pretend to work.?

I've the soaring rates of disparity graphs handy after posting them for you benefit elsewhere:

http://lanekenworthy.net/2008/03/09/the-best-inequality-graph/

Do you think the disparity was wrong in 1979? Wrong today (as it seems it was in 1929?" or that the sharply upward curving slope points to an income-curve nirvana not far ahead?


NEH

tanstaffl, Once again... is this all the better that the New Right can come up with - ad hominems? Sounds like you've been trained in the "Limbaugh School of Rhetoric and Eloquence". As for France, you do realize it is one of the economic powerhouses of the Eurozone and it's position on Eurozone Policy is having a major impact on our own Financial Industry and our ability to jumpstart our own Economy. France an economic weakling - think again.

rational expectations

I don't think that anyone has mentioned this: There is a piece on the mises.org website, from Murray Rothbard's book "Economic Controversies," which points out a major difficulty with the analysis of GDP per capita in relation to the efficiency of government employees. This is the fact that GDP includes government expenditures as one of its line items. "GDP = C + I + (X-M) + G", where C is Personal Consumption, I is Investment, X is Exports, M is Imports and G is Government Expenditures. C, I, X and M are measured by market prices based on voluntary exchange and therefore reflect value, while G is measured as total expenditures without regard to the actual value provided. So all one has to do to make sure that GDP per capita is high in the "Government Sector" is to have the government spend a lot per government employee. That makes the whole analysis a bit circular, doesn't it? Rothbard ref: http://mises.org/daily/5601/The-Fallacy-of-the-Public-Sector; GDP ref: http://en.wikipedia.org/wiki/National_Income_and_Product_Accounts

NEH

R.E., As for the equation GDP=C+I+(X-M)+G, the variables are expressed in dollars ($)only. There is no "value" "or actual value provided" accounted for. So, given the equation, if there is any increase in any of the variables, except "M", GDP will increase. A reduction in any of the variables will result in a decrease in the GDP. Now, "M" works in just the opposite way on GDP. If "M" increases, GDP decreases. If "M" decreases, GDP increases.

So given this, if "G" is increased (all other variables are held constant or increased) and "M" is held constant or decreases then GDP will increase. Now, if "G" is increased (and all others are held constant) and "M" also increases, then GDP will either increase or decrease depending on the relational dollar amount between "M" and "G".

So, if the GDP is increasing from year to year, the Economy is said to be expanding. If it decreases, it is then in contraction or a Recession. This is where the "Keynesian Stimulus" Plan comes into play. "G" is increased in order to compensate for any increases in "M" or decreases in any of the other variables.

The problem is whether or not the formula is an accurate and reliable model of the real Economy...

This is a rather simplistic analysis of how an Economy operates and I don't want you to takes this as Gospel...

NEH

R.E., It all comes down to how "value" is defined. There is the old saying, "He knows the price of everything, but the "value" of nothing". Then in the market place it's said, "The "value" of anything is the "price" some Rube is willing to pay for it (caveat emptor)". Confusing, eh...

Since we're dealing with the Market place, "value" is the monetary unit paid or the total monetary units spent within a given time frame.

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