Great news for us old Keynesians | 42 comments (42 topical, editorial, 0 hidden)

Re: Great news for us old Keynesians (4.00 / 4)

Incredible diary, Techno. I believe it can be done, technically. And since, as you point out, the key concept that will be the do-or-die element is likely it's plausibility as economic stimulation in a very, very rough time, these guys will likely either BE the gatekeepers, or will have major influence over policy.

These guys are Obama's economics team.

Austin Goolsbee
Things he's written
This guy scares me. Here's just one example why:
"The benefeits of Bozo:Proof that TV doesn't hurt kids,
not because I disagree with him, as we all know I do, but because the article is intellectually and technically dishonest. It edits the facts to support the conclusions--and we sure have had our share of that lately. I am at a loss as to why anyone with his CV would write such a clumsy puff job.

Jeffry Liebman
Pension and poverty specialist at Harvard, done intertesting research on EITC-(earned income tax credit)-good program that actually appears to help lower income families a good deal- detested therefore by the current administration;

David Cutler
Dean of social sciences at Harvard.
Things he's written
Actually, he sounds very interesting to me. Though I have not read a thing he's written, I will.

Jason Furman, --a Brookings wonk who thinks Walmart and similar business models are God's gift to the American consumer. Gulp. Veteran of the Clinton white house, and a man who seems to support the band-aid approach to solving the arterial bleeding of the American medical system. Please! Not again!

A very mixed bag- two and two, I think, but a young one. So there's hope that they can learn. Or, in the case of Keynes, re-learn.

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Wed Jun 11th, 2008 at 01:33:54 PM EST

Re: Great news for us old Keynesians (4.00 / 4)

You should send this diary to every one of them.
I am absolutely serious.

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Wed Jun 11th, 2008 at 01:35:53 PM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 4)

I despair at the economists Obama has surround himself with. I think we in USA are well and truly f***ed because there are so few political economists left of ANY persuasion--much less the progressive variety.

But Goolsbee. Oh! My! God! You read his stuff and wonder if he actually walks upright.

Yeah! It is a mixed bag--dumb and dumber.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Wed Jun 11th, 2008 at 03:09:37 PM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 4)

I posted this over in the open thread.

Fineman: An introduction to Obamanomics - Decision '08- msnbc.com

As he launches out on his first days of true general election campaigning, consider Obama's most recent moves.
His innovative and daring campaign advisors have plotted out an artful game plan, and it's every bit as shrewd as Obama's caucus/internet based bid for the Democratic nomination.

But on the other hand, I just listened to the debut of his newly bulked-up economic team during one of those wonkish conference calls for reporters.
And I have to say, if sweeping change is what Obama is all about, I didn't hear it on that call.

We all bleed the same color.

by budr on Wed Jun 11th, 2008 at 06:39:46 PM EST
[ Parent ]

I despair at the economists (none / 1)

First, an excellent posting! It validates my analysis of urban mass transit rail in the U.S. costing $3.4 trillion just to build, never mind the rolling stock. Clearly, someone talking billions at this point is a sure sign that they are of the old paradigm of finance-dominated "free market" neo-liberalism - the Anglo disease.

And that's the problem with economic advisers - the old paradigm of finance-dominated "free market" neo-liberalism is so damn dominant now. Even Thomas Palley (who so far as I know was not close to any of the primary election contenders), imho, has stumbled badly in his policy prescriptions the past few months. It is extremely disheartening. In a way, the problem is more cultural than anything else. We have to attack the Anglo disease every opportunity we get. I think one more big financial shock like Bare Sterns, and the Big Crack will begin.

Btw, anyone interested in how the U.S. bubble economy has managed to keep going since March would do well to read Doug Noland's latest "CREDIT BUBBLE BULLETIN
The cost of credit seizure" at http://www.atimes.com/atimes/Global_Economy/JF10Dj02.html

With Wall Street finance having lost its perceived "moneyness", the ongoing US credit expansion will only be sustained by rampant growth of instruments that retain the perception of safety and liquidity - namely, Treasuries, agency debt and MBS, bank liabilities and money fund "deposits". And, at least for the first quarter, double-digit growth virtually across all these key sectors generated the necessary SAAR $2.036 trillion of non-financial credit and SAAR $3.115 trillion of total system credit to prop up an acutely vulnerable economic bubble. But at what cost? And for how long does today's functional "money" - being inflated at double-digit rates through the intermediation of risky credits - retain its "moneyness"?

by NBBooks on Thu Jun 12th, 2008 at 09:56:51 AM EST
[ Parent ]

Re: I despair at the economists (none / 1)

NBBooks:

Even Thomas Palley (who so far as I know was not close to any of the primary election contenders), imho, has stumbled badly in his policy prescriptions the past few months. It is extremely disheartening. In a way, the problem is more cultural than anything else. We have to attack the Anglo disease every opportunity we get. I think one more big financial shock like Bare Sterns, and the Big Crack will begin.

I have been googling a bit for Thomas Palley and I found a November 2007 paper criticising Financialisation which would seem to be another name for "Anglo Disease".

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 10:13:29 AM EST
[ Parent ]

Re: I despair at the economists (none / 1)

Btw, anyone interested in how the U.S. bubble economy has managed to keep going since March would do well to read Doug Noland's latest
"CREDIT BUBBLE BULLETIN
The cost of credit seizure"

Any chance that someone might be kind enough to translate the column into English?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 12th, 2008 at 10:33:27 AM EST
[ Parent ]

Re: I despair at the economists (4.00 / 2)

Thanks for your vote of confidence. $3.4 trillion JUST for urban mass transit sounds like a good starting number.

As for Palley. I say let's cut him some slack. Here is why I say this. Even though economists have familiarity with large numbers, they have--as a general rule--NO experience with building anything so they don't have the background to estimate either the time nor the cost for such policy prescriptions.

My editor / publisher is a VERY smart guy and as a professor of Institutionalism, his progressive credentials are impeccable. Even so, he had me cut my $100 trillion estimate because he was afraid of appear to irresponsibly radical.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Thu Jun 12th, 2008 at 11:43:04 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 2)

Copy & paste from Krugman blog:

Jason and the Obamanauts
OK, this furor over Jason Furman's appointment is silly, on two levels.

Furman is a very good guy, with a solid track record as a progressive. You can disagree with him about Walmart -- and I do -- but his heart is clearly with those who want more social justice and a stronger safety net.
He's not, despite what the story says, Obama's chief economic policy advisor -- he's the economic policy director, which is a process job: basically, he organizes other people to provide advice. Obviously there could be a real problem if the policy director steered the candidate away from progressive advice, but Furman is, as I said, a solid progressive, and well suited to the job of honest broker.

Maybe I'm wrong, but my sense is that Jason Furman has become a proxy target for some Obama supporters who, now that the Great Satanness has been defeated, are suddenly starting to have the queasy feeling that their hero might be a bit of a .... centrist. I'm tempted to say I told you so; in fact, I guess I just did. But that's all in the past now.

Anyway, lay off Jason Furman, a good guy who will do his best to defeat a candidate who gets his economic advice from Phil Gramm.

by kukute on Wed Jun 11th, 2008 at 04:32:43 PM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 2)

I want the social safety net re[aired as well. But as you can see from the above, my BIG issue is whether or not projects that require immediate attention are going to be funded at necessary levels.

And no, I don't see anything remotely like that from the official economic teams of either candidate. For that matter, I consider Krugman hopeless.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Wed Jun 11th, 2008 at 05:26:29 PM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 2)

I have a good deal of respect for Krugman, so if he thinks Furman has Cojones and a brain, I will read more.
But we shouold all read the

Walmart piece itself,

and some other things he has written- got links, kukute?- and then let's discuss it.
Personally, it strikes me as incredibly short-sighted, much like the things Goolsbee writes.
Goolsbee is a catastrophe, and has been there a long time- longer than anyone.
It is possible that Obama has assembled a team that is politically "electable", and will make a progressive turn after McCain has been laid to rest, but his team so far offers me (or the US) no hope.

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Thu Jun 12th, 2008 at 02:40:45 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 2)

I have the same hope, and the same feeling that it ain't gonna happen. I don't mind Furman so much given the job he's suppposed to do, but the fact that Goolsbee was his first go to guy was a very bad omen. Actually the article I read on the Furman issue gave made me feel slightly better. They mentioned which economy policy types Furman was reaching out to - Rubin, Summers, Stiglitz, Jared Bernstein, and Jamie Gailbraith. The first two are of course the high priests of DLC centrism, albeit of a pretty competent sort. However, the other three are all decidedly to the left and have routinely engaged in full frontal attacks on the economic consensus. The first group was inevitable, the second not so much. But that's still a pretty thin reed, I've not seen any indication that Obama is inclined to try to really sharply change things on economic policy - whether that's due to his own beliefs or his assessment of the political realities is unknown.

by MarekNYC on Thu Jun 12th, 2008 at 03:29:29 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 5)

I have met Jamie Galbraith and have read virtually everything written by J Kenneth Galbraith. JKG was guy who introduced me to Veblen and was responsible for starting the historic preservation effort on the Veblen homestead.

Now you may consider these men lefties, but the truth is that JKG was one of the founders of Americans for Democratic Action--a group who sponsored a movement dedicated to combating the extremism of the American Marxists. He wrote for Fortune Magazine and was personally hired by Luce himself. He taught at Harvard for most of his career.

Now in the USA of final days W, such folks could be considered leftists. But by ANY reasonable definition, they are relentless centrists.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Thu Jun 12th, 2008 at 03:41:47 PM EST
[ Parent ]

Re: Great news for us old Keynesians (none / 1)

just curious, what do you consider the SPD and the PS - raging right wingers? JKG was a standard issue left wing Democrat in the fifties and sixties - i.e. to the left of the current mainstream European left. Stiglitz, Jamie Gailbraith, and Jared Bernstein would be on the left wing of any European leftist party today except Die Linke (and their economic views would fit in fine there). By your definitionat best ten percent of the continental Western European populations support 'leftist' policies. And yes, JKG didn't like dictatorships or full fledged state owned planned economies (ADA was a group of left wingers who opposed American communists) - is that really your definition of true leftism? That's not what I'd call anything near a 'reasonable' definition

by MarekNYC on Thu Jun 12th, 2008 at 08:09:20 PM EST
[ Parent ]

Re: Great news for us old Keynesians (2.80 / 5)

Keynes himself was a centrist. He managed investments for Cambridge, and speculated in currencies. When Alvin Hanson started teaching Keynes at the University of Minnesota, the Farmer-Labor Party stalwarts like my grandfather thought him a sell-out. (He was. Keynes would not come to agree with the Farmer-Labor Party until towards the end of his life.)

You are probably young. But here's a factiod you should never forget. Tricky Dick Nixon was a Keynesian. He believed in wage-price controls. He proposed a minimum income scheme. He gave us regulatory agencies like EPA and OSHA.

I am old enough to remember when Republicans elected to high office were economically FAR to the left of say a Bill Clinton or a Tony Blair. Now YOU may have moved so far to the right that JKG was a "standard issue left wing Democrat" but I certainly have not.

I would also suggest you re-examine some of you economic ideas. Folks who have ideas like yours have horribly mismanaged the economy. We can have $515 trillion in utterly worthless derivatives, but the heavens would fall if we spent $2 trillion per year on projects that are necessary to the survival of humanity? And then you show up on my comment thread to give me cheap lessons on how markets are supposed to work in applications that are, at best, irrelevant, or who the hell is a left-winger.

You seem like a bright guy. If you actually grow up, you might some day have something remotely interesting to say. You are not interesting--I can hear the tripe you spout 24/7 on any number of cable channels. And folks like you have created multiple catastrophes. Perhaps, just perhaps, you guys are just plain wrong!

This will be the last time I debate with you. I have no time for people who think they are clever because they can debate definitions. I thought that shit was boring when I was on the Jr. High debate team. Whether you think JKG was a leftist and I think he was a centrist doesn't change one damn word of what he wrote. But you debate definitions all you want with whomever finds this interesting--I have historical evidence on my side. And on this turf you may be entitled to your own opinions, but not to your own facts.

sheesh

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Thu Jun 12th, 2008 at 11:22:26 PM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 3)

Not old enough to remember those Republicans, but that was sort of my point. As yoou point out the spectrum has moved sharply right on economic policy, yet back before it did, Gailbraith was a mainstream liberal Democrat on economic policy - i.e. a mainstream leftist in a much more left wing environment. As far as the three you are calling centrists, again, read some of their stuff - their views are standard issue for the left wing of left wing continental European parties today. Of course they are also way to the right of the official doctrine of pre WWII socialist parties. But for the present day, your definition makes no sense. Lets take Germany. If we follow you the left wing of Die Linke is left, the right wing of Die Linke, the left wing of The Greens, and the left wing of the SPD are centrist, and everybody else is right wing. By 1960's definitions that's true, but so what? I also would find it silly to use todays definitions and call Ludwig Erhard a member of the German right or Ed Heath of the British right or to call Brandt right wing because he was far to the right of the Weimar era SPD (in theory at least, in practice it was a different story - what would you call someone like Hilferding).

And FWIW I'm pretty damn sure I have a much better idea of at least European policy positions and debates in the fifties, sixties, and seventies than you do (reading every goddamn issue of Spiegel and Die Zeit, plus a random fifth of the FAZ issues from 1945-1975 sort of helps with that. I'm also pretty sure I have a better idea of how the planned economies of Eastern Europe worked - lots of books, and hundreds of thousands of pages of archival documents give me a certain insight). I have far less knowledge of America in that period, but easily enough to know the sort of basic stuff about Nixon's economic policies.

On the other thread for some reason you troll rated me for disputing the idea that regardless of whether the price of diesel is two Euros/l or 20 there would be no difference in the total vehicle miles of freight trucks and for suggesting that labour costs had a good deal to do with the shift of the textile industry to low wage countries.

As for what my ideas are and their impact, I'm not quite sure how the notion that we should have an economic system like Germany in the sixties and seventies - (i.e. a little bit to the left of America in the sixties) led to this disaster. Perhaps you might care to elucidate. Or perhaps not, that's your perogative, just as it is mine to make what comments I wish. It is not your right, however, to troll rate what you disagree with.

by MarekNYC on Fri Jun 13th, 2008 at 01:35:57 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 3)

As far as the three you are calling centrists, again, read some of their stuff - their views are standard issue for the left wing of left wing continental European parties today.

Marek, there's no contradiction there. Even Europe has moved so far to the right it's scary. It also means that at least some of the "left wing of left wing" are not as out to lunch as they are made to appear.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Fri Jun 13th, 2008 at 03:33:37 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 7)

The change has been entirely political. It's about attitudes, not economics. The pre-Carter attitude was that the working classes had a certain inherent dignity and deserved a seat at the table.

The post-Reagan consensus was that the working classes - and that includes white collar working classes, who would usually think of themselves as middle class - were only worthy of abuse and contempt.

The two remaining political positions in the US is the far right fuck-em-all position, which glories in the abuse and contempt. And the less far right throw-them-a-bone position which accepts that some strategic concessions may be necessary, as long as they're kept to a minimum.

The idea that workers have an equal place both in democracy and in the economy has been eradicated.

This isn't an arguument about economic theory, but about enlightenment vs aristocracy. The enlightenment view of the inherent equality of all individuals is considered a quaint piece of history by the US political classes, and not a living principle.

So - it's unlikely that policy will change until this point of view is changed. Rational forward planning can't happen as long as there's more interest in abusing and taming the majority of the population than in creating a culture in which it's possible for everyone to flourish.

Perversely, for the aristocrats, destruction of the environment is a valid end in itself, because it's one of the way they can demonstrate their specialness.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jul 10th, 2008 at 11:52:09 AM EST
[ Parent ]

Re: Great news for us old Keynesians (none / 0)

Quite a lot of the enlightenment thinkers, at least the French ones, would pretty much agree with the current aristocracy that the workers don't deserve much...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Thu Jul 10th, 2008 at 12:49:22 PM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 3)

Too much personal attack in that, IMHO.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Fri Jun 13th, 2008 at 03:35:27 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 2)

There is, but we all have to let off steam sometimes.

Great rant, I reckon.

The discussion is absolutely reminiscent (not surprising bearing in mind the Minnesota background) of how in Norway even the Conservatives are on the "Left".

It's only the Progress party (who get about 20% of the vote and are frozen out by all the other parties) who are identifiably on the Right, and even then only in some of their positions (eg immigration and taxation).

Keep on rockin' techno: you're one of my heroes!

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Jun 13th, 2008 at 08:51:52 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 4)

And then you show up on my comment thread

This is a repeated misapprehension around here: You do not own the comment threads under your diaries. They belong to everyone here.

by Colman (colman at eurotrib.com) on Fri Jun 13th, 2008 at 03:52:07 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 4)

We can have $515 trillion in utterly worthless derivatives, but the heavens would fall if we spent $2 trillion per year on projects that are necessary to the survival of humanity

I think -- without having given a great deal of thought to the subject ;-) -- the difference is between a Closed and Open analytical/praxiological environment. Derivatives are Closed under CAPM as they 'fall-out' of well understood mathematical constructs¹ developed within a generally accepted intellectual stance². Public spending for the Public Good is Open in that fundamental questions, e.g., what is the Public Good, are uncertain, dependent on the interpreter, and controversial. Another way to look at the difference: Closed allows one to pretend to be 100% objective while Open, by its nature, precludes that pretense.

¹ How congruent these constructs are to Reality is another topic!

² How congruent the generally accepted intellectual stance is to Reality is another topic! ;-)

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Jun 13th, 2008 at 11:38:21 AM EST
[ Parent ]

Re: Great news for us old Keynesians (4.00 / 2)

I was thinking of your comments in another thread on the shift in the Overton Window while looking at some of this earlier. That is one of the most serious problems we currently have, IMHO, as it makes any significant attempt to address our current problems easy to characterize as being "extreme left wing crazyness." Wasn't it Nixon who said "We are all Keynsians now?"

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Jun 13th, 2008 at 01:59:08 PM EST
[ Parent ]

Great news for us old Keynesians | 42 comments (42 topical, 0 editorial, 0 hidden)

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