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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (18892)	12/17/2004 8:00:07 PM
From: CalculatedRisk	Read Replies (1) of 116555

Ahhh ... McCulley writes: "Europe is shackled with decidedly un-Keynesian aggregate demand policies". So is America! Although Greenspan lowered interest rates (something Keynes probably would have suggested at the time), Bush's policies are almost exactly anti-Keynesian. Bad policies lead to bad results. Just look at the real wages from this morning's data - wages in America down 1.6% over the last 12 months. Over the intermediate term, aggregate demand follows wages. In the very short term, the shortfall has been made up with borrowing. IMO, the short term is almost over. Although McCulley is right about some of Europe's problems, arguing for a race to the bottom because of "global capitalist competition" is scary. And forget the "fullness of time" (aka long term) ... "In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again." John Maynard Keynes.

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