On 9/27/05, Dana <[EMAIL PROTECTED]> wrote: > Gruss, Keynes has been around for almost a hundred years now. I can't argue > economics with someone who isn't familiar with the prevalent model.
I've been watching a little of this thread with interest, trying hard not to be dragged into a conversation I don't have time to actually participate in, but here goes... Keynesian economics are mostly macroeconomics - big decisions, small nudges, tinkering with the economy on a grand scale to effect a certain outcome. It tends to have the effect of causing big government, and big government spending. Keynesian economics are the backbone of the Bush's tax refund a few years ago. The Multiplier effect is axactly what Bush was talking about when he said he wanted to increase spending by giving people more money. Just about everyone on this list was against that - rabidly. You can't turn around and use the same arguement for govenment meddling in spending on the wage level. In principle I agree with a living wage, I think people should be able to make a living. Here's where Keynesian economics falls on it's face when it comes to wage law in a local economy - we live in a global economy (macro) and wage rules are only effective on a local level (micro). Essentially, it's not a level global playing field and adjusting up the price in one place will not always have the overall long term desired effect of increasing the standard of living. In the micro, a forced increase in wage will always force the employer to make a decision of: 1) Paying/eating the increase 2) Paying zero dollars (doing the job him/herself or shutting down) 3) Paying someone else somewhere else. The multiplier only goes into effect if option one is chosen all of the time. If there is an option to move the buiness to another plae or country for the same wage or less, then it will move - plain and simple. With a forced wage increase in the short term, everyone might get paid a little more for a few months or a few years, but in the long run, those companies will make the decisions that they have to make. MacDonalds and Walmart have to have employees on the ground, but that manufacturing plant downt he street can move to Mexico Whoops, now in the long run we've chased away more jobs and all that's left are jobs at MacDonalds and Burger King. The next rung in the ladder of income (the manufacturing plant) has moved away, so everyone who was hopig to use that to take a step up is screwed. Now we have a low income class working flipping burgers, and an executive class, but no blue collar class. Oops... Now here comes the replies - there goes my day - Bring It! -Cameron ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Purchase Contribute 3 from House of Fusion, a Macromedia Authorized Affiliate and support the CF community. http://www.houseoffusion.com/banners/view.cfm?bannerid=53 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:175282 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
