Comments on: Hopeless Economists http://themoderatevoice.com/24736/hopeless-economists/ An Internet hub with domestic and international news, analysis, original reporting, and popular features from the left, center, indies, centrists, moderates, and right Wed, 30 May 2012 17:15:00 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: DLS http://themoderatevoice.com/24736/hopeless-economists/comment-page-1/#comment-165968 DLS Mon, 01 Dec 2008 22:35:04 +0000 http://themoderatevoice.com/at-tmv/michael-silverstein-poetry/24736/hopeless-economists/#comment-165968 2. The current economists are coming to terms with the threat of deflation rather than the decades-old concern about inflation, which was first tamed in the early 1980s and then diminished to the point where it wasn't on our minds throughout the 1990s and this decade until the recent run-up in oil prices that has since reversed. The general approach to the economy now is to try to stimulate more economic activity by being willing to lower interest rates close to or to zero per cent (federal funds rate), if necessary, and expansionary (inflationary) monetary policy and other confidence lifting moves are contemplated "if necessary" such as having the Fed purchase Treasury bonds.<br><br>At least general policy like that is not only the kind of broad policy we'd expect, but superior to the appeal to base instincts (on which vote-buying is based) of people in the name of populism, such as letting judges rewrite mortgage contracts to expropriate creditor-lenders in favor of borrowers ("the people!").<br><br>And a general stimulative and expansionist approach to try to forestall deflation is (under the given conditions) orthodox, while the following suggested bailout scheme has all kinds of moral as well as economic defects.<br><br>"Chevy Volts should be sold to the government AT PREMIUM and WITHOUT A BATTERY WARRANTY. Each vehicle should be sold at a profit. And in so doing, and assuming sufficient battery pack quantities can be produced, they could be released earlier than the November 2010 deadline”<br><br><a href="http://www.thetruthaboutcars.com/volt-birth-watch-117-gm-voltcom-swings-for-the-fences/" rel="nofollow">http://www.thetruthaboutcars.com/volt-birth-wat...</a> 2. The current economists are coming to terms with the threat of deflation rather than the decades-old concern about inflation, which was first tamed in the early 1980s and then diminished to the point where it wasn't on our minds throughout the 1990s and this decade until the recent run-up in oil prices that has since reversed. The general approach to the economy now is to try to stimulate more economic activity by being willing to lower interest rates close to or to zero per cent (federal funds rate), if necessary, and expansionary (inflationary) monetary policy and other confidence lifting moves are contemplated “if necessary” such as having the Fed purchase Treasury bonds.

At least general policy like that is not only the kind of broad policy we'd expect, but superior to the appeal to base instincts (on which vote-buying is based) of people in the name of populism, such as letting judges rewrite mortgage contracts to expropriate creditor-lenders in favor of borrowers (“the people!”).

And a general stimulative and expansionist approach to try to forestall deflation is (under the given conditions) orthodox, while the following suggested bailout scheme has all kinds of moral as well as economic defects.

“Chevy Volts should be sold to the government AT PREMIUM and WITHOUT A BATTERY WARRANTY. Each vehicle should be sold at a profit. And in so doing, and assuming sufficient battery pack quantities can be produced, they could be released earlier than the November 2010 deadline”

http://www.thetruthaboutcars.com/volt-birth-wat…

]]> By: DLS http://themoderatevoice.com/24736/hopeless-economists/comment-page-1/#comment-165967 DLS Mon, 01 Dec 2008 22:13:52 +0000 http://themoderatevoice.com/at-tmv/michael-silverstein-poetry/24736/hopeless-economists/#comment-165967 1. I hate to be the spoil-sport who actually knows more and better stuff than his critics believe,<br><br><a href="http://en.wikipedia.org/wiki/Image:Stalag_17.jpeg" rel="nofollow">http://en.wikipedia.org/wiki/Image:Stalag_17.jpeg</a><br><br> but if people retrench and reduce their spending or service debt and save instead of spend and borrow, and we get a deflationary spiral, that's simply what was meant to happen sooner or later.<br><br>The current home-equity-as-ATM and living-on-credit-card mentality, while still ongoing, is not sustainable.<br><br>As to a payroll tax holiday, that's more irresponsible than a gasoline tax holiday. Social Security and Medicare are unsustainable as it is. Why not instead end the payroll tax, put the "needs" into a revised income tax (made more progressive, naturally), and include additional taxes so as to make Social Security, at least, solvent.<br><br>Nobody equates the federal government only with a favored few on Wall Street, and not everyone is so childish or short-sighted to assume the federal government instead should be everybody's big, surrogate parent. Not only the Detroit Three (whom most sane people do _not_ want bailed out, nor the equally obsolescent UAW) but other companies have come to Washington for bailouts and other kinds of handouts, and Obama meets with governors tomorrow, who will be pleading for, it isn't hard to guess, more bailouts and handouts of all kinds. ("Populism" that is simply appeal to the lowest-quality nature within our society: "Fast relief!") Some failed cities (which may or may not yet have corrected their own wrongful ways, such as city income and other taxes) no doubt are next in line. (It wouldn't surprise me if all of NYC metro came stampeding to Washington for relief from reality using Other People's Money, for example.) 1. I hate to be the spoil-sport who actually knows more and better stuff than his critics believe,

http://en.wikipedia.org/wiki/Image:Stalag_17.jpeg

but if people retrench and reduce their spending or service debt and save instead of spend and borrow, and we get a deflationary spiral, that's simply what was meant to happen sooner or later.

The current home-equity-as-ATM and living-on-credit-card mentality, while still ongoing, is not sustainable.

As to a payroll tax holiday, that's more irresponsible than a gasoline tax holiday. Social Security and Medicare are unsustainable as it is. Why not instead end the payroll tax, put the “needs” into a revised income tax (made more progressive, naturally), and include additional taxes so as to make Social Security, at least, solvent.

Nobody equates the federal government only with a favored few on Wall Street, and not everyone is so childish or short-sighted to assume the federal government instead should be everybody's big, surrogate parent. Not only the Detroit Three (whom most sane people do _not_ want bailed out, nor the equally obsolescent UAW) but other companies have come to Washington for bailouts and other kinds of handouts, and Obama meets with governors tomorrow, who will be pleading for, it isn't hard to guess, more bailouts and handouts of all kinds. (“Populism” that is simply appeal to the lowest-quality nature within our society: “Fast relief!”) Some failed cities (which may or may not yet have corrected their own wrongful ways, such as city income and other taxes) no doubt are next in line. (It wouldn't surprise me if all of NYC metro came stampeding to Washington for relief from reality using Other People's Money, for example.)

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