It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. As always, civilised discussion and no coarse language. I’ve cut off a thread-derailing discussion of the Pinochet dictatorship on another post, but those so inclined can go at it here, bearing in mind the comments policy and the requirement for civility.
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John Quiggin 
Monkey’s Uncle, a quick glance of the USA Today/Gallup poll dated 2-4 November 2007 shows Bush’s overall job approval rating was at 31%, with a 64% disapproval rating. On those figures one could say Bush was terminal.
@Monkey’s Uncle
Actually though this means the 22nd Amendment was moot since there was no circumstance in practice in which Bush could win, and indeed, he’d not have been nominated.
It is true that anyone would have defeated Bush in the circumstances, but there was the possibility that John Claytons Bush McCain could have won and essentially continued Bush’s agenda, possibly have died in office and handed over to Palin with even worse consequences than Bush could have fashioned.
Obama defeated Bush’s proxy and promised a new and improved relationship with the rest of the world. He did withdraw those missiles in Poland. He did begin getting troops out of Iraq. He did begin a respectful dialog with the Muslim world. He has foreshadowed something McCain would not have — reducing nuclear arsenals. He has foreshadowed removing discrimination against gays.
I have misgivings about the award, but then again, what point is an award like this after you have succeeded. You need the heat when the matter is still in the balance and you have someone who might make it happen. If that gets us over the line with a resolution of the Palestinian problem and serious cuts in nuclear arsenals and Gitmo closed and robust Climate Change action on a world scale bedded down well then I won’t quibble.
gerard,
The funny thing is that his nomination was made and accepted at 11 days.
He has announced a lot of peace policies, but there have been no actual accomplishments yet – never mind at 11 days. It’s a farce, and one the committee I think will regret.
Still – they gave one to Kissinger. There is hope.
@sdfc
sdfc – perhaps you also needed to remind Seb that the fiscal pumps were not brought out in fighting the Japanese recession initially but ONLY when Monetary policy failed to have any effect whatsoever…
so argument from some “that fiscal policy failed Japan” is yet another attempt at information twisting..bot monetary policy and fiscal policy expansions were applied. The discount rate was lowered from 6% in 1989 -90 to 0.5% by 1995. The fiscal spending programs were not even implemented until 1992 and income tax cuts werent introduced until 1994. So the information you have is not quite correct – that is, fiscal policy followed an extremely low interest rate which also wqasnt having much effect.
Sdfc, Tell Seb to put real facts on the table!
@Andrew Reynolds
Disgusting … Le Duc Tho quite rightly declined.
And Menachem Begin … oh dear …
the GOP is the world’s most concentrated, powerful force of political insanity in the world.
at 11 days he had, at least, kept 73 year old “bomb bomb bomb Iran” McCain and Sarah “Rapture” Palin away from the Red Button – that’s got to be worth something, right? they might have made the nomination expecting to wait and see how things turned out by October. from the shortlist I think Hu Jia was the a much more worthy choice. but look, Bush’s war crimes killed a million people and gave torture pride-of-place in foreign policy, and the Republican Party has by this time gone so far off the deep end that they make even Bush look moderate. as I said earlier it’s actually a “F#ck You” prize from the civilized world to the Republican Party, that’s not a complete farce, too soon for sure, but the committee leader did say something to the effect of “several years from now it could be too late”… i.e. “lots of teabagging crackers have guns”
so I said “the world” twice in my first sentence… er, just emphasizing the point
@gerard
Gerard – Shouldnt that be Sarah “Raptor” Palin (small brain large claws?)? Yes – Obama sure does deserve the nobel. I think he deserves it. Im not so sure about the financial reforms though…I dont see much joy there yet.
@Alice
Alice, you’ll appreciate the fact that Sebastian is presumably still limited to one comment a day, and can’t answer these questions.
Although, from the looks of things, he would point out that your argument follows the stock-standard Keynesian “they just didn’t spend enough” argument. As for monetary expansion, I’m sure you would know enough from your readings to note that monetary expansion in the absence of any increase in real savings isn’t going to do much good, i.e. it does little to resolve the problems related to misallocations of capital goods, and little to mitigate the painful period of readjustment.
Supply side Jesus
Very amusing …
Fran,
Perhaps the sarcasm was a little weak.
.
gerard,
The vote of the American people is what kept McCain and Palin out of the White House. On that logic you would have made the award to each and every Democrat voter in the USA.
It may be that in four years he has achieved much and, if he was a little behind in the polls to candidate Palin (or whomever else), then the Nobel committee may have thought that a little push from them may have helped. This is not going to achieve anything. A complete and utter waste.
@sdfc
Interesting research report. How about this one: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=411349.
Abstract:
This paper first summarises Japan’s fiscal policies in the 1990s. Then, we investigate the macroeconomic impact of government debt and the sustainability problem. We find that the Keynesian fiscal policy in the 1990s was not effective and fiscal sustainability may therefore become a serious issue. We also estimate the optimal level of deficits and evaluate fiscal reconstruction movements. It is shown that the actual deficit exceeded the optimal level in the late 1990s. We then inspect fiscal reconstruction movements in the Hashimoto Administration in 1997 and find that the major factor of recession in 1997 was not fiscal consolidation. An important lesson from Japan’s fiscal policies in the 1990s is that long-run structural reform is more important than short-run Keynesian policy.
@Andrew Reynolds
I believe Obama anticipated this proposition when he said:
You add:
Kiss of death and pointless in those circumstances, I’d think.
Fran,
I think you under-estimate the US people in there.
To me, you under-estimate them when saying that the award in (about) 3 years (not four – error on my part) would be the kiss of death – they are actually very proud when one of their people is seen to be doing well internationally. The award of a Nobel in the lead up to an election would, I think, serve to remind them that there is a world outside the lower 48 and (in the event Obama has done well by then) that they should be considering his record in that world when considering their vote.
Awarding it now I see as the error for the simple reason that he has not achieved – although he has promised – much and that the US people will know this. It just devalues the “currency” of the Nobel to be seen to be awarding it for promises rather than achievements. Over the next 3 years it is possible (although I would think very unlikely) that Obama’s policies will lead to nuclear war in the Middle East. If so, the Nobel will probably lose all possible credibility.
To me, it should be awarded once the impact of policies and actions have had time to play out – not before they have even had a chance to be implemented.
The award to Kissinger, for example, should not (IMHO) have been made when it was, if at all, and should certainly have been delayed until the point where the consequences of his actions, as well what those actions were, was more certainly known than they were at the time.
AR, I’m wondering who you would award the prize to? It’s generally been awarded on recent events. Maybe that’s wrong, but it’s their tradition, isn’t it? A lot of the anti-Obama reaction seems to me to be psychological, like: He’s the target, who cares about the reasons.
Jim: I don’t think that’s quite right in this case. There’s a lot of discomfort amongst people who are well-disposed towards Obama. It sure seems a bit previous to me.
My sense is that the whole issue will cause many to reflect on why the Nobels are of significance, and perhaps conclude that they don’t. Prizes are pretty silly anyway. Bureaucracies always love them of course, but maybe they’ve been outgrown by most of us?
@Andrew Reynolds
In the US being like by foreigners is very much a mixed blessing, especially for those perceived as “liberal” as this is counterposed to being patriotic, and bound up with fears of cession of sovereignty etc. The timing you suggest would be played as “foreign interference” in US politics and Obama would have to decline it or at least distance himself from it by playing hard to the local peanut gallery, especially if he were behind.
Even now there are elements there who are speaking openly of military coups to deal with “the Obama problem” and taking their weapons along to Town Hall meetings on Health Care, who insist Obama is not a “natural born American” and/or a Muslim/ some sort of “Manchurian candidate”. And you only have to look at the reaction to see how “proud” the right is … they snickered over Chicago missing the Olympics and howled tears of rage than he won the Nobel Prize.
@Not Sebastian
Ha ha NOT SEBASTIAN lol thats funny. Still in the clink eh??
@SeanG
Sean G – Japan suffered in the 1990s from a massive bursting of a real estate bubble… to argue whether fiscal policy or montary policy did or didnt work better in the circumstances is somewhat belated and a bit silly really – perhaps it should have been applied correctly before the bubble got out of hand (hmmmmm….isnt that a bit like the US??).
Knowing when to apply a contraction is harder than knowing when expand..it would seem. The short run policy long run structural policy argument is a nonsense. There are so many markets that were de-regulated or “reformed”(sounds like the Spanish inquisition and probably has similarities) including financial and labour markets in the US and elsewhere in the name of “structural reform”…
but it didnt save them from the bubble did it Sean? – so what exactly was the point of such structural reforms ? Less economic volatility? (no), higher employment? (no), lower prices (how about housing? – no – imports – yes), stable inequality ? (no), lower trade deficits in US? (no), lower budget deficits ? (no).
Hmmm. The clock keeps ticking but the long run gets further away…. not much changes except the latest economic fad. Perhaps we need to get out those “whip inflation now” badges of Carters and start wearing them again.
SeanG, the paper you cite is unsurprisingly is of the view that fiscal policy was ineffective, however its main concern was the debt to GDP ratio which was as much a result of stagnant tax revenue as government spending.
It does nothing to refute the claim by Kuttner and Posen that policy was far from being as stimulatory as the ideological warriors would have us believe.
sdfc and Alice,
I merely wanted to show that for every policy paper arguing that Keyneisan pump priming should have been extended there is another paper arguing the opposite.
Japan is a topic that I’d love to discuss for hours on end but don’t jump to conclusions merely show some intellectual humility and recognise that there are people out there who might disagree with you and be able to back those criticisms up.
Fran,
I think that people who think those things are unlikely to support Obama in a pink fit and would be more likely to vote for a small piece of green putty rather than Obama. Those people can safely be written off – just as those that would rather vote for anything with “Democrat” on it can safely be ignored – as long as they turn out to vote. My earlier position stands.
.
Jim,
Fair question. Rajapaksa did manage to finish a war, but the methods were sufficiently questionable to put him out of contention. That said, Kissinger keeps raising his head on that, so maybe. It would be difficult to award Suu Kyi again. Prachandra is probably out – that much blood and his attitude are probably not the best, but he may improve in the future. Tsvangirai would have been a brave choice and the money would have been handy. Difficult, but perhaps him. Otherwise, choosing no one is always an option.
Sean, don’t get upset it’s not about intellectual humility it’s about the numbers and the 4 to 5% deficits from 93 to 97 were simply not large enough to be considered hugely expansionary. Of course the major problem was the failure to clean up the banking system.
This is not to say I am a huge fan of the Rudd stimulus package.
sdfc,
This is where you and I disagree. I dislike the argument that 4-5% deficit was not enough. When a country triples their government debt as a percentage of GDP and it is claimed that it is not enough, then it indicates a circular argument.
This debate shows the problems I have with economists: they revert to their own bias when offering solutions to economic problems. The stock answer that Alice gives – fiscal spending and regulation – is not the answer for every problem in the world.
We must look at this logically. What is the problem? Banks with massive bad debts (BTW we are talking about Japan here). What is the solution? Nationalise bad banks and create a separate firm with the bad debts.
What solution did the Japanese come up with and what solution are you advocating? Government spending and tax cuts.
This looks at the symptoms (flagging domestic demand) and not the root cause. Until the mindset is changed from looking at stock answers to tailoring answers specific to the problems then economists will always get into ideological debates.
sdfc,
I understand that you wrote “Of course the major problem was the failure to clean up the banking system.” However, your previous answers stated that fiscal stimulus should have been larger when there is no evidence that it would have solved the massive problems faced at that time.
As I said before – is policy tackling the root cause of the problems or the symptoms?
@SeanG
Sean G – the answer to the problems we have of rising inequality (in this country since the mid 1970s) compounded (or perhaps caused by excessive income accruing to the already rich) is in fact to raise income taxes on the rich and to properly and adequately regulate the financial system and restore welfare safety nets and lower taxes on other classes. In short get the redistribution operating in the after tax system more effectively once more, as it was supposed to do (but has been incrementally attacked by wealthy industry lobby groups).
By raising taxes on the rich to the level of the 1950s we dont need large budget deficits and it would reduce the need for higher taxes on everyone else so you would get your lower taxes (unless you are playing footsoldier to the wealthy). We need as Krugman suggests a new new deal to restore the status of the middle classes and to raise the status of the lower classes in this country and stop the growing elite divide. If you want to be part of the part that calls for reduced government spending just remember there is more than one way to skin a cat and the lower classes and the middle classes have been well and truly skinned in this country and its time to face the obvious.
Roosevelt had to fight for this in the 1930s against a waterfall of powerful objections and we will have to fight for it again but more of the country are in the mood for a fight now than ever before.
@Alice
Alice, Roosevelt put income taxes on the wealthy up to 90%. I think that borders on almost complete expropriation of property, which of course is one of the reasons the Great Depression dragged on for so long. Why bother contributing anything to society if the fruits of your labour are going to be forcefully taken and devoted to some pointless boondoggle or social programme? And Roosevelt didn’t fight for anything, he just threw tax dollars around until he got his way, by buying up support in Republican states and setting the IRS on his political opponents – he even tried packing the supreme court. He remains a taint on the office of president, and one of the worst presidents in US history, whose legacy we would be wise to forget.
By the way, there are already welfare safety nets and regulations, they haven’t disappeared – in fact, they’ve been expanded and bloated to massive proportions.
As for the growing gap between the “elite” and the “poor” and your playing the politics of envy, you’ll find that the so-called educated “elite” are the ones that are best able to utilise the advances in technology that have so significantly improved our standard of living, and that’s where their higher earnings come from. In fact, I’d argue that it’s time the poor got off the booze, took better care of their children, stepped up to the plate and did their fair share, instead of just relying on government taking from someone else to give to them. That, to me, is facing the obvious.
Sea-bass, I know Libertarians like to exaggerate at times but where did you get the stats on the wealthy being taxed 90%? My understanding is that in 1935 Roosevelt increased the top rate to 79%.
Sea-bass, maybe I should have added that the top marginal rate income tax rate of 90% was implemented after the start of World War Two when the US economy converted from peacetime to a wartime economy in 1940.
Yes, MoSH – and 79% is just so reasonable and not a disincentive to further effort at all. The UK 99% rate made perfect sense as well. Perhaps once we get to $100k per annum the rate should just be 100%. No-one could want more than that, surely.
Sean
At no stage did I say fiscal policy should have been larger. That is a point of view that some hold, however I’m not sure of how effective a larger stimulus would have been without the required restructuring of the banking system, remembering that credit is the life-blood of the modern economy. I was saying that using the Japanese experience as a stick with which to beat advocates of fiscal stabilisation is flawed.
Cleaning up the banking system and fiscal stabilisation are not mutually exclusive. I am more concerned with the damage caused by easy money, if I had my way central banks would clamp down on credit booms before they got out of hand.
Domestically, I’m far more concerned over household debt sitting at 150% of disposable income than what is very a manageable level of government debt.
@Michael of Summer Hill
Yes, Michael of Summer Hill, although technically true I admit that I cited the 90% rate to strengthen my case (not that 79% isn’t bad enough, and Roosevelt actually proposed a 100% tax rate on all income above $25,000 at one point). It would be interesting to see what actually happened to tax revenue at that point. I don’t think it helped “laissez faire” ideologue Herbert Hoover when he made the dastardly decision to balance the budget by raising the tax rate from 24% to 63%.
Of course, I’m pretty sure it reached 90% again under Eisenhower.
@sdfc
In response to your earlier comment regarding monetary expansion: yes, I am fully aware that monetary expansion is a prescribed Keynesian “solution”. But you seem to have disregarded the reason for the tightening of monetary policy, which was to deal with inflation. This happened in the middle of the Great Depression, leading to the great recession of 1937 (this was of course compounded with continuing tax hikes and pro-union legislation). From your post above you seem to recognise that easy credit has adverse consequences, and yet you seem to hold the contradictory belief that adopting an easy money policy in the midst of a recession makes it all ok. For the record I do not subscribe to the Bernanke/Friedman “monetarist” view that the Great Depression could have been averted by simply increasing the money supply, if they did I would say they were simply postponing the inevitable.
@Sea-bass
Sea Bass
Yes Roosevelt put the taxes up on the rich but why so worried – he took a few years to raise it to 90%. By the 1950s the poorer and the middle classes had gained in real terms (they needed to). The rich on the other hand had lost in real terms. They lost their long island estates, mainly because theyc ould no longer afford the armies of servants needed to run them. Now thats a real shame isntn it?. Its like taxing Rupert Murdoch 22 million times 90 percent. That leaves old Rupe 2.2 mill a year to live on. He wont starve.
What isnt a shame of these so called “wealth misappropriations” is that entrepreneurialism didnt die and the economy boomed in the US after Roosevelt and more actually trickled down from Roosevelts and Trumans policies than anything popularist force fed the citizenry since Nixon (tax cuts to the rich trickle down – no they dont).
@Sea-bass
says “Alice, Roosevelt put income taxes on the wealthy up to 90%. I think that borders on almost complete expropriation of property, which of course is one of the reasons the Great Depression dragged on for so long”.
Ill say this. Ive heard everything. The reason the depression lasted so long is because no one reigned in the gambling elite before the 1929 crash and like the GFC they crashed the damn economy stupid.
Roosevelt got out of control people like you (Sea Bass) back on track. You wouldnt know the woods for the trees.
Alice,
Did you ever think that there was a booming economy because the US had all this extra capacity from WW2? New technologies developed by both private and public sector to take on the Germans, Japanese and Italians? Or how about women having a larger (relative) role?
Did you take these into consideration?
@Michael of Summer Hill
Moshie – you are right Sea Bass doesnt know what he is talking about. Taxes on the rich went to 70% under Roosevelt but it wasnt intil the 1950s they hit 90 percent to help pay for the war.
So what??. We started causing problems for various advanced economies when they started dropping those tax rates on the wealthy and ignoring tax systems as a genuine redistribution device and now as a result, we risk being taken over by a bunch of greedy excessive oligarchs who would happily bankrupt, impoverish and starve others if it meant they paid a percent more tax (ANYWHERE) and they still scream for tax cuts and no government. Well all I can say is listen to those ideas at your own peril. They would restart slavery if they could make a buck from it. Im just not certain our government hasnt been bribed to the hilt by them as it stands now. Am I cynical?? More than….who is there in politics brave enough to stand up to these low lifes as Roosevelt was??? Who??
79% sorry
Sea-bass, before the US entered the Second World War increased defense spending and the need for monies to support the opponents of Axis aggression led to the passage in 1940 of two tax laws that increased individual and corporate taxes, which was followed by another tax hike in 1941. But it wasn’t until the end of the war that income earners over $1 million were slugged a top rate of 94%. I’m stuffed have a good night’s sleep.
@SeanG
I did think about that for two seconds Sean. New technologies raised incomes you say? Wait a minute Sean. Wasnt it new technologies that lowered wages after the 1980s when new technologies suddenly demanded skilled labour and divested low skilled labour?
So in one breath you say new technologies raised incomes and in the next someone else new technoly lowers incomes? ?A new technology for all seasons and all reasons?? Make up your mind which way you are going with new technologies because mostly the new technology argument is a load of old horse manure….
What made incomes higher was legislative protection of labour and unions Sean. Thats why the rich hate unions. Labour gained and capital lost in the years from 1930 to 1950-60. Its about time it happened again unless we want to bankrupt the country by letting the greedy elite have it all their way, as we have been doing.
I never mentioned wages and new technologies…
Re-read my post and then post another response. This time, actually read what I wrote instead of sprouting out whatever is on your mind.
@Alice
I’m going to assume that I’m out of the clink and that JQ will let me post more than once a day provided I don’t get too snarky.
You’ve presented SeanG (although I think your last comment was aimed at me as well) with a false dichotomy. Nobody is saying that new technology reduced wages. What I was alluding to is that the rise of the information technology sector has allowed the wages of skilled labourers to rise rapidly in comparison with unskilled labourers. There’s nothing intrinsically evil about that – why should someone be paid more for a job they don’t do as well as somebody else? Besides, inequality is always blown out of proportion, and wage statistics are subject to significant downward bias.
You’ve obviously been subscribing to Krugman’s (and most probably JQ’s) nostalgianomics. I was barely old enough to remember the 80s, but I can’t see why everyone’s complaining – were the 50s, 60s and 70s really that good? I doubt it. You oldies will just have to get used to the fact that we live in a competitive world, and that Keynesian fiscal-coddling will not absolve you from rising to the challenge.
“Labour gained and capital lost in the years from 1930 to 1950-60.”
Lay off the Marx. And any fool can tell you that unions push up wages, leading to involuntary unemployment, which leads to the greater employment of capital in these industries, increasing its price and diverting it away from other industries. While I support an individual’s right to join a union, giving them to much sway is bad for everybody except the union workers lucky enough to have jobs.
In the end of the day, capitalism and the free market is about creativity and innovation. These are antithesis to a Keynesian economy which has to be command-and-control by nature.
Look at the facts. In the 1990s Japan responded to a banking crisis by turning on the taps of both fiscal and monetary policy. Very little effect. Very little change. Effectively two lost decades.
1970s had a Labour Prime Minister in the UK basically say that pump priming does not work. This was because the Government had regulated the economy into the ground and needed to go to the IMF cap-in-hand.
1930s saw a fiscal expansion that did nothing to stimulate the economy. How many years does it take to run deficits?
The Keynesian argument does not work because it is predicated on endless gorging and does not take into account of the natural economic cycle. An example is the rhetoric that the stimulus package (in the US) has not worked so the government needs to borrow and spend more and do so again and again. This ignores the economic cycle and it assumes that the public as opposed to the private sector can grow.
Finally… when the government borrows there must be a person or people willing to lend. Once they stop doing that then no matter how many research papers are written by academics – you ain’t go not money left for a stimulus unless you take the Argentine option.
@Sea-bass
With a name like Sea Bass how could I not know it was you SE BAS!!! (TIAN)!!
I should have known you would get out of the clink sooner or later – dont be too concerned about your criminal record. There are a lot of fish in the sea that John West rejects.
But you cant keep throwing old fishy arguments around Seb – The Keynesian intervention and controls implemented after the great depression not only saved us from becoming a grossly unequal society Seb, as was teh case before the great depression, and has been happening since the mid 1970s with the rise of the hard right amongst the conservatives not only in the US but also here (thanks to some generous funding by wealthy families, donations deals for politicians, think stink presses, media manipulation and indeed media moguls from the same elite class that benefitted from hard right agendas, and an entire industry and nation wide political and economic scam, but im over it and so is everyone else.
Seb – you are on the losing side now. You may wish to stoke your credentials in the conservative (no hard right liberal party)by throwing the best and the most untruthful propaganda around in JQs blog (is this some sort of training ground for baby barracudas??) to see what sort of job it can land you in industry as it so often does but it wont help when the voting tide changes Seb, against the liberals with their free market policies. It is changing Seb. Be careful you dont get stuck gasping in the mudflats, later to be marked as a crank.
Ultimately good policy will prevail and all the well funded dirty tricks of the hard right (like attacking the moderates in their own party by funding challengers) will be seen by the electorate for what they are. An agenda aimed to reward the already very rich at the expense of all other classes in Australian society.
No one can ignore the growing inequality any longer where only the very richest have made any real gains over the past thirty years Seb. Do you think people dont know how hard it is to buy a house now?? Ask the young, ask the middle classes and go ask the upper middle classes Seb (and the more who lose their house in Australia – the less are going to vote for the liberal party).
The more who are intimidtated by their employers due to growing casualisation and exploitation, the less are going to vote for the liberal party.
The snatch and grab thieves riding at the very peak of the inequality tsunmai only have further to fall Seb. No point swimming with them.
@SeanG
Both of you SEA URCHINS – the new command economy is run by the hard right posing as the moderate conservative parties (liberal in Australia, Republicans in the US). The right commands run like this “we command you all to believe the lies we publish. We command you beleive that by working more insecurely and for less hours we (white man) will be “richer.” We command that you buy our economics only from Chicago “Untruth” University.
The only balance that exists is provided by Fed labor here (exclude the bunglers in NSW state) and the democrats in the US. These are the parties who are balanced and moderate and progressive and have more to offer to offer the majority (not the elite minority you suck up to) and more to offer to protect capitalism than the nonsense proclamations from the commanding heights of the right …the hard right has hijacked conservatism from the conservatives and it doesnt exist in the right any more. It exists in the centre where it has always existed.
Im waiting for the little blue book to be printed by the right . “Thou shall not watch anything except Murodch. Thou shall not read anything except Murdoch. Thou shalt especially not think unless Murodch says so.” “Though shall destroy all governments”. “Thou shall hate all unions.” “Thou will not complain when all public services are sold off and your children cannot be educated and your parents cannot access healthcare.” “Thou will not object to tax loopholes for corporations or gross CEO remunerations”. “Thou shall admire the thieves and the frauds in the financial markets for they are clever entrepreneurs.”
If the ideas of the right were any damn good people may have noticed they were getting better off…except 99% are no better off since the ideologies of the hard right commanders took over and they actually know it.
Time the ultra rich paid more (much more) taxes so they had no money left to fund stink tanks. A message for the very rich (and the hard right – same same) from the truly balanced among us – Work hard pay your taxes and stop paying other people to whinge, lie, cheat and steal for you.
@Sea-bass
Oh and Sea Bass
you say “Lay off the Marx. And any fool can tell you that unions push up wages, leading to involuntary unemployment, which leads to the greater employment of capital in these industries, increasing its price and diverting it away from other industries.”
It isnt Marx BTW. Its econ 101 which is a croc anyway. Unions had a very important role. Unions prevented the CEOs paying themslves in multiples of millions of dollars unless they wanted troubles from the men on the floor.
Legislative protection is needed omce more for peoples rights to join a union and not be exploited and not be illegally fired for doing so. Gillard unwound partially the little rodents workchoices but she hasnt gone far enough. Something needs to be done to stop the erosion of labour rights by stopping the casualisation tidal wave. Otherwise the growing and already obscene inequality will only get worse and we will end up with one of these wealthy long lunchers running the country with an army of underpaid apes at his disposal..
It was labour protection that also stopped exceutives getting so fat and out of control like useless… Sea… Blubber…and workers ended up with more of the profits they (CEOs) have seen fit since the mid 1970s to increasingly redirect to themselves ie mostly the top one percent (do you really know how few that is and how much of the income they control…
@Alice
What a conspiracy. And aliens landed at Roswell, JFK was shot by an angry Milton Friedman from a grassy knoll…
Tell me Alice, what is a command? Dergulate and “do what you like” or regulate and “do this or we’ll fine ya”?
I like Alice – those who work hard should pay for everyone else!
Sea_bass & SeanG, history is on Alice’s side and you do tend to generalise a lot which is of little value to anyone. Maybe you should do some reading as to why farmers and workers in ie the US united forming syndicates during 1800s before you keep on raving. And don’t blame the unions.
@Michael of Summer Hill
Moshie – Sea Bass cant recall the 1980s. That says a lot and yes both of themm need to get their history from unbiased readings and they have a lot of reading to do because they keep slipping up.
Those who earn top incomes can pay more tax comfortably and need to pay more to correct the upward trending inequality. There is currently some tax break for high income earners on capital gains meaning they only get taxed at 15% anyway which is less than the rest of us. It costs the US Govt 6 bill a year. Of that 6 bill, 2bill goes straight to approx 26 individuals. 2 bill would go a long way towards schooling or health a lot of children. That is evil. No other word for it. And yes the finance industry, as noted by Soros who did actually work in it for damn near half a century, was strictly regulated at the end of WW2 and we managed to avoid major cyclical crashes for decades. As he notes a crescendo of de-regulation came in the 1980s (which Sea Bass wouldnt recall) not helped at all by fundamentally flawed models that assumed financial markets adjusted to equilibrium on the basis of rational expectations and perfect information (assume LTCM and black scholes). I doubt any trader would have really subscribed to this nonsense for long but the economics profession ensured it got built into the models and have been clinging to it ever since. Then banking crises started soon after the rush of deregulation with the 1980s banking crisis and continued. As Soros notes market fundamentalism or same old 19th century laissez faire capitalism resuscitated (which is the just another empty ideology as communism or nationalism or any other ism is) reared its ugly head and Soros is firmly of the view that the financial markets need regulation.
Why would I subscribe to both your inexperience… Sea Urchins? You only have three degrees of argument (no regulation, union horror stories, and wailing about government). So I suggest you put it on the reading list.
Actually I like Soros view of economics…Im inclined to think demand and supply arent stand alone either and perfect information is not at all guaranteed, if we really want to fix the models to be more like the real world, thats where we need to start. At the beginning with the basics instead of building shiny glass empires on fundamental errors. Soros is right. Never have I read a truer commentary. What we have tried to fit to the financial markets is pretty two dimensional mathematical models that dont work.
Im more than a bit embarrassed at the profession of economics..but not as embarrassed as I am at the mindlessness of those who thought we could happily keep de-regulating in what was essentially laissez faire (I wont call them economists – they dont even deserve the title).
We should have learned that lesson many times over by now.
@Alice
That was an insanely long rant.
Yes, I’ve heard all about the Golden Years of the 50s and 60s – my grandpa tells me that everything was hunky dory out in Broken Hill working the mines, until they introduced machines that could do the work of several men and hence jobs were lost and that means modern technology is a curse and that things aren’t what they used to be blah blah blah. Great guy, but really sticks to the luddites’ fallacy. If those days were really a workers’ paradise, and given that lifestyles today are pretty decent, there would have been no need for progress.
For the record I am registered with the LDP, and have never voted Liberal.
As for Keynesianism reducing inequality, I always thought its raison d’etre was stimulating economic growth? Keynesianism prescribes nothing with respect to inequality, which is more a moral question than an economic one as far as I’m concerned.
And while you complain about CEOs paying themselves millions of dollars, who don’t seem to have any complaint with multi-millionaire union leaders. Also, I would like to point out that I have never denied that people should have a right to join a union, but likewise compulsory and closed-shop unionism are a violation of basic human rights and the right to freedom of association. Labour has the right to accept a job and be remunerated on the agreed terms, and they have the right to withdraw their labour when they are not satisfied with the price. That is a much better system than centralised wage-fixing and letting unions run riot with wage breakouts and mass unemployment.
And no economist to my knowledge ever assumes perfect information, and if they did they would be laughed out of the profession. Even libertarians know that the market isn’t perfect, and sometimes fails, even those that believe in Say’s Law understand this (and they have a better understanding of recessions than Keynesian quacks, who don’t even understand Say’s Law). At any rate, given imperfect information, why do you assume that government is somehow omniscient and can effectively regulate the markets?
And by the way, I’ve found several articles on the CIS website, written by Labor members of parliament (shock horror)!
I hope that doesn’t break your little heart…