Ray, very elegantly stated. It has been obvious to me for some time
that conservative/right wingers in US politics seek a return to the
1880s/days of the Robber Barons. I don't understand why the common
folk would want this, but it's obviously what the bankers want. As
for economists - I think they are mostly clueless!
Barry
On Jan 17, 2011, at 1:37 AM, Ray Harrell wrote:
Arthur,
So economics is not an engineering (design) management
discipline? It’s not about the creation of new and exciting ways
of funding and building a vibrant, happy society? If not then
what discipline does do that and why the hell are we listening to
economists for those things? And what is this BS about “game
theory” and why should an out of work person not arm themselves to
keep out the sheriff representing the banks?
Arthur, my people were friends with the brothers, Frank and Jessie
James and Pretty Boy Floyd and that other “ten most wanted” Ben
Goldie McCullum. Are we to return to those days when the people
who kept the banks away from the families did it by robbing
them? Perhaps you may be getting a rational for all of those
extra large ammo clips flying off the shelf after the Congresswoman
was shot in Tucson.
My great grandfather and his younger brother, rode with the 2nd
Mounted Rifles of Arkansas and knew the James brothers from the
Civil war. He didn’t ride with Quantrill but he certainly knew
those folks and the problem with the Railroad and the Banks and the
Robber Barons. It was a time when Indians fought Indians and
none of them bragged about what they had to do. Later in the
Cherokee Nation, the ethic of group loyalty would supersede the
Cherokee Banker’s (one was Will Roger’s father) desire for
profit. The banks helped the people until there was no poverty in
the Cherokee Nation. Later I would see that same ethos from my
father on the Quapaw reservation at Picher. Now that is the kind
of banker, teacher, businessman and economist that I’m used to from
my own history.
This new banker and economist that has no loyalty to home, community
or nation is a new “bird” in my experience. But the Dawes
Commission disbanded the Cherokee Nation and the Cherokee economic
system which Dawes and the U.S. Congress claimed was the system of
Henry George. Think of that? Obviously times have changed and
the Georgists have moved elsewhere in their theories.
What we were left with was the crash, the dust bowl, the depression
and predatory banks. That was when the families rose up and took
matters into their own hands. Once more my family was on both
sides. We had family that were lawmen as well as being friends
with the people fighting dispossession and abject poverty.
My father grew up and was friends with Goldie McCullum and was the
man that Goldie asked for when he was to be executed. Dad went to
school with Pretty Boy Floyd’s daughter in Ada, Oklahoma.
Today it’s all smelling like a return and with the way the folks out
West are arming themselves including my half cousin Senator Tom
Coburn who got the law passed to carry firearms in the National
Parks. His attitude about what he thinks is coming was obvious
this morning on Meet the Press.
Coburn is my Uncles’ second wife’s son and is the father of an opera
singer and the half brother of the former head of the Juilliard
Opera Center. I’ve never met the man since he came to the family
long after I had left Oklahoma. But from a distance, his taste and
economics seems to mirror Harry and Keith. His second degree is
in obstetrics but his first was as an accountant.
Doesn’t this weird world that the discipline of Western economics
has brought us [as it has risen to the top of the academic heap],
bother you or any of the others? Thus far it feels like Adam
pointing the finger at the woman and saying, “It wasn’t me Lord,
that’s not what economics is all about.”
REH
From: [email protected] [mailto:[email protected]
] On Behalf Of Arthur Cordell
Sent: Sunday, January 16, 2011 9:26 PM
To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION'
Subject: Re: [Futurework] The 'New Normal' of Unemployment
This article contains many flaws.
Economics is about the allocation of scarce resources among
competing uses. It is not about solving unemployment problems or
job creation, although economists can do this. Other people can
also deal with unemployment and job creation.
That the problem of deficits is old thinking is an ideological
statement. All I can say is: Stay tuned.
Arthur
From: [email protected] [mailto:[email protected]
] On Behalf Of Robert Stennett
Sent: Sunday, January 16, 2011 1:51 AM
To: EDUCATION RE-DESIGNING WORK INCOME DISTRIBUTION
Subject: [Futurework] The 'New Normal' of Unemployment
http://www.commondreams.org/view/2011/01/15-2
Published on Saturday, January 15, 2011 by the Guardian/UK
The 'New Normal' of Unemployment
by Dean Baker
The American Economics Association held its annual meeting in Denver
last weekend. Most attendees appeared to be in a very forgiving
mood. While the economists in Denver recognized the severity of the
economic slump hitting the United States and much of the world,
there were few who seemed to view this as a serious failure of the
economics profession.
The fact that the overwhelming majority of economists in policy
positions failed to see the signs of this disaster coming, and
supported the policies that brought it on, did not seem to be a
major concern for most of the economists at the convention. Instead,
they seemed more intent on finding ways in which they could get
ordinary workers to accept lower pay and reduced public benefits in
the years ahead. This would lead to better outcomes in their models.
The conventional wisdom among economists is that the economy will be
forced to go through a long adjustment process before it can get
back to more normal rates of unemployment. The optimists put the
return to normal at 2015, while the pessimists would put the year as
2018, and possibly, even later.
Furthermore, many economists believe that the new normal will be
worse than the old normal. The unemployment rate bottomed out at
4.5% before the housing bubble began to burst. If we go back to
2000, the United States had a year-round average unemployment rate
of just 4.0%. The optimists now envision that normal would be 5.0%
unemployment, while the pessimists put the new normal at 6.0%
unemployment and perhaps higher. As a point of reference, every
percentage point rise in the unemployment corresponds to more than 2
million additional people without jobs.
The willingness of economists to so quickly embrace this darker
future is striking. After all, one of the reasons that we have
economists is, ostensibly, so that we don't get such unpleasant news
about a "new normal". This is like a football team calmly accepting
the sports writers' prediction that they would have a winless
season, and deciding that their new goal was to minimize the margin
of defeat.
The prospect of an extended period of higher unemployment would be
easier to accept if there was a good argument as to why the economy
cannot achieve the same levels of employment as it had in the recent
past. Economists really don't have much basis for this lowering of
expectations of their own and the economy's performance.
The main argument seems to stem from the work of two economists,
Carmen Reinhart and Ken Rogoff, who have examined financial crises
around the world. Their analysis finds that, in most cases, it has
taken countries roughly a decade to recover from the effects of a
financial crisis and return to a more normal growth path.
There is an important limitation in the Reinhart and Rogoff
analysis. Most of the crises they examine were in the distant past,
before the development of modern economics and its bag of tools. If
the thousands of economists gathered in Denver know anything more
about economics than those not educated in the field, then it would
be reasonable to expect better outcomes than in prior centuries.
After all, through most of human history a large portion of children
died in their first years of life. However, with modern medicine and
good nutrition, infant mortality is a rare event in wealthy
countries. By the Reinhart and Rogoff extrapolation, we would still
expect most children to be dying before the age of five, based on
the historical experience.
The methods for generating demand are not a mystery. It basically
amounts to the government spending more money until the private
sector is again in a position to fuel demand. The fears of deficits
and debt that the pessimists promote stem from a misunderstanding of
basic economics. Deficits can be a problem when they crowd out
private economic activity. In a severe slump like the current one,
this crowding-out is not a realistic fear; there are vast amounts of
idle resources. Furthermore, there is no reason that the debt needs
to pose an interest burden on taxpayers in the future. The Fed and
other central banks can simply buy and hold the debt, refunding the
interest payments to the government.
If economists did their job, they would be pushing policies to get
the economy quickly back to full employment. Instead, they just
repeat lines about how "we" will just have to accept some rough
times. Unfortunately, no one ever asks the economists who preach
austerity how much time they expect to spend in the unemployment
lines.
If they don't know anything, then why should we listen to them?
© 2011 Guardian/UK
Dean Baker is the co-director of the Center for Economic and Policy
Research (CEPR). He is the author of The Conservative Nanny State:
How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org
) and the more recently published Plunder and Blunder: The Rise and
Fall of The Bubble Economy. He also has a blog, "Beat the Press,"
where he discusses the media's coverage of economic issues.
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