The left must think more deeply than simply aiming for "full employment" resulting from more public or private consumption. We can have full employment, i.e. a job for those that want a job, at the current level of public and private consumption. We can, and should, and must, reduce the work week to this end. With climate change, and run-away climate change at that, already looming as a human and environmental catastrophe, having as the left's goal the consumption of more stuff is pathetic.
Gene Coyle On Jul 4, 2011, at 10:32 AM, Lakshmi Rhone wrote: > Krugman writes today: "That’s almost surely false: the evidence strongly says > that the real reason businesses are sitting on cash is lack of consumer > demand." But Krugman has not broken free of the pump priming thesis. He seems > to think that public investment could set things right pretty quickly. > > Public spending will not necessarily stimulate private investment as the > result of the stimulus it gives to private consumption. The system has not > fallen into an unstable equilibrium which merely needs an injection of new > spending to push it back on track. It’s exactly because unemployment has > become stable that repeated shoves and not just a single shove are required, > coupled with new forms of planning, to move the economic machine back up to > full employment. > > Krugman is certain that we can do something this big without offending the > confidence fairies. I think we should certainly try because unemployment is > intolerable and interest rates are low, but I think we should push for this > while preparing for the possibility that the fairies will exact a mean > revenge. > > At any rate, the theory of the multiplier can be defended without the > pump-priming thesis, that is the thesis i that “temporary injections of > government spending would set the wheels of private enterprise in motion and, > once private enterprise was back on its feet, the government expenditures > could be withdrawn without causing any relapse in economic activity.” The > Economics of John Maynard Keynes , p. 126 (Some of the most lucid post war > Keynesians Dillard, Lawrence Klein, and Hyman Minsky all took or had taken > their Marx very seriously). > > The pump priming thesis as summarized here by Dudley Dillard is exactly the > mistake that Keynes and FDR took some time to overcome. And it is the mistake > that Obama already made. I don’t think Professors Quiggan, DeLong or Krugman > have pinpointed the problem. It’s the mistake of the pump priming thesis. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
