02-17-2009, 05:07 PM
Going to get on a soap box here and discuss a bit of the current economic mess. But some things first...
What kind of economic school of thought do I subscribe to? Hard to say, on one hand I do think John Maynard Keynes had some very valid points and I subscribe to them...but not all. Adam Smith is the father of economics, but I don't dogmatize everything...he was after all human. As for Karl Marx, no economist has been able to fully discredit his criticisms in "Das Capital" (The Capital...not the philosophical book called the communist manifesto, it has very little to do with economics), so I also subscribe to his points as well. What I DO NOT subscribe to is the French Phyisiocrat ideaology of laissez faire which if you read it, has these similarities to communism, great idea on paper, in practice, utter failure. This ideaology has been linked to the French Revolution, the Great Depression....and who knows how many more victims it will claim in the current economic mess.
One of the main problems with physiocrat ideaology, it assumes everyone will do what's in thier self best intrest...and thats the main problem. Banks are almost another branch of government (is it no surprise there are a number of Old Testament Laws concerning what amounts to bank regulation with depositing money with the priesthood?), and if you leave greed unchecked and have a philosophy that says its not wrong....guess what, bank executives/management don't do whats good for thier shareholders....and of course, everyone else,...their consequences of failure are virtually nil.
One of the unfortunate results of the Cold War ending (yes, I know the irony of my screen name), was a sudden belief that "pure capitalism" (which is just a step away from anarchy) has been proven and that we should embrace it. Yet here we are in a mess ironically Karl Marx warned about. What makes me want to /facepalm more is how many demand that Reagan's economic philosophy be used and induce more tax cuts. This is the type of thinking that makes me belive Darwin's theory of natural selection is flawed if not false. His policies were for a very different set of circumstances, that being the general populace and government was not in the mountain of debt it is in now. Hence tax cuts allowed people to spend more thereby helping to yank the economy to health. Tax cuts now simply put the government into debt more and people who are still employed will be able to pay a tad bit more into debt, but it will not bring thier consumption to sustainable levels which would bring back the economy. And of course unemployment will continue to rise...and eventually those tax cuts will mean nothing.
Now the President of the USA, signed a huge spending bill today. Will it work? Not a clue. I'm going to be honest, its gamble. But doing nothing at the same time is like going to Las Vegas betting on green at the roulette table, you have a very slim chance of getting lucky, but more than likely your going to lose. What they did today was bet on red and hoping it won't hit black.
So what will happen if our economy goes bust? Look south of the border, their economy is whats in store here.
But if they are succesful, guess whats coming....more taxes, oh and inflation. How do you think they are going to pay for all this? But at the same time, if you don't like it, would you prefer they bet on green?
Sometimes I really wish I went into Archeology or History instead of Economics.
What kind of economic school of thought do I subscribe to? Hard to say, on one hand I do think John Maynard Keynes had some very valid points and I subscribe to them...but not all. Adam Smith is the father of economics, but I don't dogmatize everything...he was after all human. As for Karl Marx, no economist has been able to fully discredit his criticisms in "Das Capital" (The Capital...not the philosophical book called the communist manifesto, it has very little to do with economics), so I also subscribe to his points as well. What I DO NOT subscribe to is the French Phyisiocrat ideaology of laissez faire which if you read it, has these similarities to communism, great idea on paper, in practice, utter failure. This ideaology has been linked to the French Revolution, the Great Depression....and who knows how many more victims it will claim in the current economic mess.
One of the main problems with physiocrat ideaology, it assumes everyone will do what's in thier self best intrest...and thats the main problem. Banks are almost another branch of government (is it no surprise there are a number of Old Testament Laws concerning what amounts to bank regulation with depositing money with the priesthood?), and if you leave greed unchecked and have a philosophy that says its not wrong....guess what, bank executives/management don't do whats good for thier shareholders....and of course, everyone else,...their consequences of failure are virtually nil.
One of the unfortunate results of the Cold War ending (yes, I know the irony of my screen name), was a sudden belief that "pure capitalism" (which is just a step away from anarchy) has been proven and that we should embrace it. Yet here we are in a mess ironically Karl Marx warned about. What makes me want to /facepalm more is how many demand that Reagan's economic philosophy be used and induce more tax cuts. This is the type of thinking that makes me belive Darwin's theory of natural selection is flawed if not false. His policies were for a very different set of circumstances, that being the general populace and government was not in the mountain of debt it is in now. Hence tax cuts allowed people to spend more thereby helping to yank the economy to health. Tax cuts now simply put the government into debt more and people who are still employed will be able to pay a tad bit more into debt, but it will not bring thier consumption to sustainable levels which would bring back the economy. And of course unemployment will continue to rise...and eventually those tax cuts will mean nothing.
Now the President of the USA, signed a huge spending bill today. Will it work? Not a clue. I'm going to be honest, its gamble. But doing nothing at the same time is like going to Las Vegas betting on green at the roulette table, you have a very slim chance of getting lucky, but more than likely your going to lose. What they did today was bet on red and hoping it won't hit black.
So what will happen if our economy goes bust? Look south of the border, their economy is whats in store here.
But if they are succesful, guess whats coming....more taxes, oh and inflation. How do you think they are going to pay for all this? But at the same time, if you don't like it, would you prefer they bet on green?
Sometimes I really wish I went into Archeology or History instead of Economics.