c b wrote: > Here's a Marxist political economic final exam for Keynesians: > What do Keynesian ideas on abating recession have to teach the Occupy > Wall Street, Chicago, LA, etc movement ?
Nothing much, since the Occupy Wall Street movement [OWSM] is about power relations and Keynesian economics is not. Of course, it's always good for people to know what they're talking about (e.g., economics). > How would inculcating those > activists with Keynesian ideas be different from steering them to the > Democratic Party ...? It's good that people know something about what they're talking about, but if done accurately, teaching the OWSM about Keynesian economics wouldn't steer them toward the DP or Obama, since the latter embrace anemic Keynesian economics at best (as Fernando notes). Helping the OWSM know more about K economics would likely push them _away from_ the DP because they'd realize that the DP is so weak on this issue. If K economics is needed, standing outside the DP and yelling for solutions is more likely to produce those policies than joining the DP or MoveOn.org, supporting it, apologizing for it and its politicians, etc. > How much does government spending abate recession ( quantify it) ? There was temporary stimulus which had faded. It didn't deal with the housing market (upside-down mortgages, foreclosures, etc.) It didn't get businesses to use their ample cash reserves to invest in expanding their operations, while it didn't get banks to lend their ample cash reserves either. It didn't really deal with the international dimension; it was the Republicans at the Fed who did so, but not sufficiently, it seems. As Fernando notes, it didn't help consumers enough. The flaccid nature of the K economics that Obama and Congress applied should have been obvious, given Obama's choice of people like Summers and Geithner to head his economics team. Those appointments said loud and clear that Obama was serving Wall Street, not the people. > To > the anti-Obamaites, did the O Stimulus abate recession and > unemployment at all ? I can't speak for the rapidly growing camp of anti-Obamaites, but the Obama/Congressional stimulus moderated the recession, but it wasn't enough and it didn't address the more fundamental problems (see above). It's been shrinking, especially as Obama has shifted over to "balance the budget"/anti-government debt logic, while preemptive compromises with the Right seem to have been Obama's watchword. Further, the state and local governments have cut back more and more. The Fed seems to have used up all of its ammunition (and is beginning to lose its stimulative will). Thus, we're likely to see a second dip in the recession (new falls in real GDP) and, more likely, a "lost decade" of slow growth of output and stagnant employment (and worsening long-term unemployment) as in Japan during the 1990s. This prognosis is getting worse as the European situation becomes more dire. > Would a Stimulus twice as large saved us from > the current supe-high unemployment rate ? or not ? Three times as > large ? That's history. The past cannot be reversed. The point is that Obama blew his control of both houses of Congress (because, it seems, he didn't want to offend his donors by letting the Bush tax cuts for the rich expire). When he had that control, he might have been able to push through a more stimulative package (if he and the DP hadn't been so weak and beholden to the money boys). Now, he no longer has the ability (or the wish, it seems) to engage in the kind of stimulus that's needed in the future. It's only when there's a serious deepening of economic stagnation that hits the money powers below the belt and/or a widening and deepening of movements like the OWSM that the White House and the DP will start thinking about serious stimulus. > How precise really is Keynesian science ? No economics is a science like physics. In terms of the ability to predict the future, it's more like meteorology. The difference with meteorology is that economics has some control over the economy. K economics works, up to a point and not exactly. It doesn't help deal with supply-side constraints (such as the capitalist need for the existence of a reserve army of labor in order to preserve profitability). Textbook K economics doesn't address such issues as the fundamentally rotten financial system or the long-term stagnation of working-class standards of living, along with the seeming need for financial bubbles to prop of demand. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
