link here to article
I'm not sure that they are our two most dangerous economists but they are more effective than a lot of the right wing nuts that appear on TV. Reinhart's husband is a honcho at the conservative Hoover Institute at Stanford. Rogoff is a conservative who said that he voted for McCain because he is a great American. (I wonder what he thought during the Arizona primary when McCain changed his opinion on almost everything that he had ever believed in order to win over the Tea Party crowd in Arizona which had opposed him.) Nevertheless, Reinhart and Rogoff have lots of support for their ideas. Expansionary austerity has become the accepted approach to the recession in much of Europe as well as in the US. Most economists agree that governments have to get their fiscal houses in order, but they also understand that economic growth has to be part of the solution to the debt problem,and that short term cuts in government spending will shrink GDP and make the debt to GDP number even larger. Reinhart and Rogoff have not paid much attention to the Japanese experience with a balance sheet recession when fiscal contraction led to higher debt to GDP ratios.
Wednesday, August 3, 2011
Tuesday, August 2, 2011
US Following Japanese Mistake In Order To Run 2012 Campaign On Deficit Reduction
This graph shows what happened in Japan in 1997 and 2001 after government cut spending with the intent of reducing deficits. The lesson that Japan learned was that in a balance sheet recession consumers and business are trying to reduce debt. When the government attempts to reduce its debt at the same time, the economy contracts, tax revenues fall, and the deficit increases.
Monday, August 1, 2011
Koch Foundation and Economic Freedom
link here to site
This is link to the Koch Foundation website. You will notice that its stated mission is to " advance social progress and well being through the development. application and dissemination of the science of liberty". If you click on the News link on the left side it will take you to news about its deal with Florida State University to promote economics education and a couple of articles on the reaction by those who see it as a threat to academic freedom. Of course, they picked what they wanted to publish on the topic but that is not my point. You will find a link to a video that they developed on Economic Freedom and Well Being. The video conveys what they mean by the concept of economic freedom and its relationship to well being. In other words, this is what they mean by the "science of liberty" that is in its mission statement. You will see that it is hardly a science. It is simply propaganda.
The public is contributing to the propaganda of the Koch Foundation because the Koch contributions to the foundation, as well as other contributions from those who support its mission, are deductible from personal income taxes. Groups like the Tea Party get a lot of their information from the Koch Foundation and other foundations supported by tax deductible contributions, that play a similar role in organizing and training the populist groups that are responsible for much of our political dysfunction. Its hard to understand why we provide tax benefits to organizations that have propaganda as its primary mission. They define liberty as freedom from democratically elected governments which have the role of protecting the public interest. In their view, government regulations and laws which require corporations to behave in the public interest, are violations of freedom. When corporations do whatever they please, even if it leads to financial chaos and recession, it is an expression of their liberty and freedom. The actions taken by government to prevent future financial crises and to have corporations internalize the costs of pollution are viewed as threats to freedom in the US and that is why the video shows that the US is losing its status on their definition of economic freedom. It is intended to alarm the public and to encourage dissatisfaction with government.
This is link to the Koch Foundation website. You will notice that its stated mission is to " advance social progress and well being through the development. application and dissemination of the science of liberty". If you click on the News link on the left side it will take you to news about its deal with Florida State University to promote economics education and a couple of articles on the reaction by those who see it as a threat to academic freedom. Of course, they picked what they wanted to publish on the topic but that is not my point. You will find a link to a video that they developed on Economic Freedom and Well Being. The video conveys what they mean by the concept of economic freedom and its relationship to well being. In other words, this is what they mean by the "science of liberty" that is in its mission statement. You will see that it is hardly a science. It is simply propaganda.
The public is contributing to the propaganda of the Koch Foundation because the Koch contributions to the foundation, as well as other contributions from those who support its mission, are deductible from personal income taxes. Groups like the Tea Party get a lot of their information from the Koch Foundation and other foundations supported by tax deductible contributions, that play a similar role in organizing and training the populist groups that are responsible for much of our political dysfunction. Its hard to understand why we provide tax benefits to organizations that have propaganda as its primary mission. They define liberty as freedom from democratically elected governments which have the role of protecting the public interest. In their view, government regulations and laws which require corporations to behave in the public interest, are violations of freedom. When corporations do whatever they please, even if it leads to financial chaos and recession, it is an expression of their liberty and freedom. The actions taken by government to prevent future financial crises and to have corporations internalize the costs of pollution are viewed as threats to freedom in the US and that is why the video shows that the US is losing its status on their definition of economic freedom. It is intended to alarm the public and to encourage dissatisfaction with government.
How The Housing Market Chain Is Broken
link here to article
This article explains how the housing market operates as a chain. The chain is only as strong as its weakest link. Currently, the weakest link is the move up buyer link. Most of sales at the low end of the market are distressed sales where the seller is not moving upwards in the chain to purchase a more expensive home. The market will not recover until that link in the chain is restored.
This article explains how the housing market operates as a chain. The chain is only as strong as its weakest link. Currently, the weakest link is the move up buyer link. Most of sales at the low end of the market are distressed sales where the seller is not moving upwards in the chain to purchase a more expensive home. The market will not recover until that link in the chain is restored.
Towards A More Authentic Populism
link here to article
This article describes how the victory gained by the Tea Party populists came at the expense of most Americans. It suggests that it may spur the development of a new populism that is broader based than the Tea Party and more aligned with the expectations of most Americans.
This article raises a good question. That is, can we fashion a new populism? In order to accomplish that we need a better understanding of how the Tea Party was organized and funded by those who benefit from the exploitation of the rank and file members of the Tea Party. Any new populist movement will be up against a well funded shadow Tea Party that is really its opposition.
This article describes how the victory gained by the Tea Party populists came at the expense of most Americans. It suggests that it may spur the development of a new populism that is broader based than the Tea Party and more aligned with the expectations of most Americans.
This article raises a good question. That is, can we fashion a new populism? In order to accomplish that we need a better understanding of how the Tea Party was organized and funded by those who benefit from the exploitation of the rank and file members of the Tea Party. Any new populist movement will be up against a well funded shadow Tea Party that is really its opposition.
Camparing The Tea Party Taliban With McCarthy Era
link here to article
This article compares our current political environment with the McCarthy era during the Cold War. The Tea Party Taliban may have sown the seeds of its own demise just as McCarthy did in the Cold War.
We should not ignore the economic likely economic outcome of Tea Party Taliban victory. We will have imposed austerity on a fragile US economy. We will not be able to grow our way out of deficit and it may be made worse by a double dip recession. This will happen at a time when Europe is in crisis as well. Slower global growth will take its toll. Everyone will have to pay a price for the failure of democracy to work in the US and the potential collapse of the Euro.
This article compares our current political environment with the McCarthy era during the Cold War. The Tea Party Taliban may have sown the seeds of its own demise just as McCarthy did in the Cold War.
We should not ignore the economic likely economic outcome of Tea Party Taliban victory. We will have imposed austerity on a fragile US economy. We will not be able to grow our way out of deficit and it may be made worse by a double dip recession. This will happen at a time when Europe is in crisis as well. Slower global growth will take its toll. Everyone will have to pay a price for the failure of democracy to work in the US and the potential collapse of the Euro.
There Are No Winners In The Debt Ceiling Dog Fight
link here to article
This article provides an overview of the debt ceiling deal that was cobbled together over the weekend. The GOP, which has a majority in the House, scored a TKO over the party that controls the Senate and the White House. The key sentence in the article described the TKO as a victory for the president in his election campaign but a big loss for the president's image as a leader. He can campaign as the reasonable person in the battle who was willing to take a bipartisan position against the radical element in the GOP. He may win the next election but his image as the President will have taken a big hit. The image of America as the preeminent global leader has also been eroded by the senseless battle that openly displayed out dysfunctional political system to the world. Our version of Democracy is no longer a model for the rest of the world.
This article provides an overview of the debt ceiling deal that was cobbled together over the weekend. The GOP, which has a majority in the House, scored a TKO over the party that controls the Senate and the White House. The key sentence in the article described the TKO as a victory for the president in his election campaign but a big loss for the president's image as a leader. He can campaign as the reasonable person in the battle who was willing to take a bipartisan position against the radical element in the GOP. He may win the next election but his image as the President will have taken a big hit. The image of America as the preeminent global leader has also been eroded by the senseless battle that openly displayed out dysfunctional political system to the world. Our version of Democracy is no longer a model for the rest of the world.
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