Of course, I agree with him. I have hopes we can go this far; I have doubts that we will "find the money." Helping the poor is something that we do in good times -- we boost our old "tried and true" ways during the bad times.
If we can pass healthcare for all, I suppose I should be happy. If we can work on global warming, and create green technology and eneterprises, I will be delighted. If we find a way to help schools achieve good learning, I would be ecstatic. But it's too much to ask. We have a messy democracy -- even messier than India's if truth be told. We will have senators and congressmen alike, fighting a strong central government. They may do it based on philosophy alone, or they may understand that strengthening the middle class will strengthen democracy and smooth out the rough spots for the poor. And they may not want that to happen. After all, if they aren't making money off the backs of the poor and trading paper in order to make a bubble or a buck, then how can they become wealthier than God? We're in a sad state -- hope that things will get much worse. Many people reach for a life raft when they are drowning, and few of them ask for the CV of the person saving them. That's a joke. We need a strong central government with a plan for the poor -- just like Reich describes. On Dec 18, 4:47 pm, "[email protected]" <[email protected]> wrote: > My comment: Excellent way to explain the "common goods" and why this > is not a "normal" crisis. > > Peace and best wishes. > > Xi > > http://robertreich.blogspot.com/2008/12/logic-of-keynes-in-todays-wor... > > Not long ago I was talking to someone who once had been a deficit hawk > but the current recession had turned into a full-blooded Keynesian. He > wanted a stimulus package in the range of $500 to $700 billion. > "Consumers are dead in the water," he said, fervently, "so government > has to step in." I agreed. But I didn’t tell him his traditional > Keynesianism is based on two highly-questionable assumptions in > today’s world, and the underlying logic of Keyenes leads us toward > something bigger and more permanent than he has in mind. > > The first assumption is that American consumers will eventually regain > the purchasing power needed to keep the economy going full tilt. That > seems doubtful. Median incomes dropped during the last recovery, > adjusted for inflation, and even at the start weren’t much higher than > they were in the 1970s. Middle-class families continued to spend at a > healthy clip over the last thirty years despite this because women > went into paid work, everyone started working longer hours, and then, > when these tactics gave out, went deeper and deeper into debt. This > indebtedness, in turn, depended on rising home values, which generated > hundreds of billions of dollars in home equity loans and refinanced > mortgages. But now that the housing bubble has burst, the spending has > ended. Families cannot work more hours than they did before, and won’t > be able to borrow as much, either. > > The second assumption is that, even if Americans had the money to keep > spending as before, they could do so forever. Yet only the most myopic > adherent of free-market capitalism could believe this to be true. The > social and environmental costs would soon overwhelm us. Even if > climate change were not an imminent threat to the planet, the rest of > the world will not allow American consumers to continue to use up a > quarter of the planet’s natural resources and generate an even larger > share of its toxic wastes and pollutants. > > This would be a problem if most of what we consumed during our big- > spending years were bare necessities. But much was just stuff. And > surely there are limits to how many furnishings and appliances can be > crammed into a home, how many hours can be filled manipulating digital > devices, and how much happiness can be wrung out of commercial > entertainment. > > The current recession is a nightmare for people who have lost their > jobs, homes, and savings; and it’s part of a continuing nightmare for > the poor. That’s why we have to do all we can to get the economy back > on track. But most other Americans are now discovering they can exist > surprisingly well buying fewer of the things they never really needed > to begin with. > > What we most lack, or are in danger of losing, are the things we use > in common – clean air, clean water, public parks, good schools, and > public transportation, as well as social safety nets to catch those of > us who fall. Common goods like these don’t necessarily use up scarce > resources; often, they conserve and protect them. > > Yet they have been declining for many years. Some have been broken up > and sold as more expensive private goods, especially for the well-to > do – bottled water, private schools, security guards, and health > clubs, for example. Others, like clean air, have fallen prey to > deregulation. Others have been wacked by budget axes; the current > recession is forcing states and locales to axe even more. Still > others, such as universal health care and pre-schools, never fully > emerged to begin with. > > Where does this logic lead? Given the implausibility of consumers > being able to return to the same level of personal spending as before, > along with the undesirability of our doing so even if we could, and > the growing scarcity of common goods, there would seem only one > sensible way to restore and maintain aggregate demand. That would be > through government expenditure on the commons. Rather than a temporary > stimulus, government would permanently fill the gap left by consumers > who cannot and should not be expected to resume their old spending > ways. This wouldn’t require permanent deficits as long as, once > economic growth returns, revenues from a progressive income tax refill > the coffers. > > My friend the born-again Keynesian might not like where the logic of > Keynesianism leads in today’s world, but the rest of us might take > heart. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
