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Posner has had it right from the beginning. These libertarian evangelists would hate living in a world where their advice was actually followed (although they'd find a way to say the problem is we're still not being "Austrian" enough). I'm unemployed and plan on spending my time re-reading Overcoming Law. (Just finished Economic Structure of Tort Law.)


Posner writes: "I don’t think there’s much else the government could have done to arrest the depression."

Quite the contrary, the government could stop slow-walking regulatory approvals for job-creating domestic energy projects such as the Keystone pipeline and offshore drilling in the Gulf and Atlantic continential shelf, and stop hurling up imaginary environmental horrors as barriers to oil and gas fracking. In addition, instead of bailing out bank shareholders and executives, the government should have used the TARP money for direct mortgage relief to underwater borrowers, allowing the residential real estate market to clear and resume functioning normally. Further, the government should have immediately cut the corporate tax rate (now highest among OECD nations), improving the economic incentives of U.S. companies to hire and their competitiveness with foreign companies in lower tax nations. These examples are not exhaustive, merely illustrative. Had the Obama administration taken these steps, among others, rather than spouting divisive class warfare rhetoric as a poor substitute for national policy, many more people could be back to work today.

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What we need is an impetus for long term growth.

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I agree, the unemployment rate can definitely be misleading. I strongly believe the depression just accelerated the long term trend of reduced employment.

Thomas Rekdal

Judge Posner always has interesting things to say. If he did not, I would not check in every week. But this week is disappointing.

He says we did not have a big enough stimulus early enough. Well, we'll never know, will we?

He says we did not spend the stimulus on the right things. No kidding? (See the U.S. Constitution, Article I).

He says automation is destroying our job market. Grim outlook. Maybe, maybe not.

Here's my take: The origin of the problem is that we spent too much, both privately and collectively. We did so because we lost sight of the fact that this is not a good idea (a moral problem, not an economic one). It will take a long time to pay for our sins (how long I cannot say, because I am not an economist). But when we are done paying for our sins, things will be just fine, because we are a (reasonably) bright people, have lots of resources, and a (mostly) free market. Cheer up.

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Tans? Where did the real conservatives and conservators go? or were we always a nation of boosters willing to rape the environment?

Your "XL pipeline" was rerouted by request of Repubs in Nebraska. Now a new route is being considered....... and last I heard, being found lacking. Do you stop to weigh "fast tracking" against the acquifers of our breadbasket?

The rest seems "talk radio" as few pay the "highest corporate rate". There likely is SOMETHING that might be done to improve how and when it's paid, but I've not heard much consensus.

The well named "TARP" needed to be flung over the reeking mess as fast a possible... and getting assistance out to "underwater mortgagees" is a slow process in any case, and when their "robo-signed papers" have been chopped into confetti it's much worse.

And please! do remember the TARP was flung during the waning days of the Bush admin, with then Senator Obama being the stand up guy in the room as McCain fumbled with "notes" and Bush "having lost control of this meeting" left the room.

Just this week they're talking seriously about programs.... but some for the GSE's and something else? or nothing? for others?

"Oil?" and Keystone? Look, the Brit Pets' Gulf "whoopsie" was a $40 BILLION event for them and many of the Gulf are hardly "whole" as yet. The Admin was right to have a moratorium and take a look at, perhaps, sloppy procedures after an oil admin with little regard for regulation had been in office for eight years. Keystone is $7 billion, spent over several years... it's hardly an atom in a $15 trillion economy.

But! we will continue to be barraged by this stuff until November, eh?



The items you mention of Posner this week are dead on.

The stimulus was too small. Provably so and the shortcut is what we see.

Automation, not "China" IS the job killer of MFG.

"Good or bad?" "Good" would be that of the long bandied about "shorter work week". But! the dollars for that have been taken by those of the top one percent....... thus! unemployment and no retirement!

The fact that the unemployment rate was less than 5 percent before the depression may refute the suggestion of a long-term decline in employment.

"Moral problem?" During the false housing boom it was child's play for realtors and mortgage lenders to point out the facts of home prices running away and that they'd be better off stretching out to buy now rather than miss the boat. Were some "too greedy?" Likely, but most were just trying to house their family. Immoral?

If so, our "sins" in the private sector have been that of building too many homes....... and as you say that will, for the most part, sort itself out over time....... but perhaps some considerable time.

And Ha! in the Fed sector? Though it cost us $2 trillion has the failure of the "Bush tax cuts" to "increase revenue" finally put The Laffer Curve to the death it has long deserved? Will we again tolerate big lied into a costly war and NOT passing the hat to pay for it? And has the word "deregulation" become a tad suspect as should be the case?


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Instead of reading these two boobies who merely regurgitate tired old neo classical cliches which got us into this mess in the first place read Steve Keen, Michael Hudson, william Black, Yanis Varoufakis and you'll actually learn something.

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A depressing possibility is that the depression has accelerated what may be a long-term trend to reduced employment in many industries.


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