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Politics : View from the Center and Left

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To: Dale Baker who wrote (113537)	6/16/2009 5:30:08 PM
From: Steve Lokness	Read Replies (1) of 541701

It would be such a virtuous world...that's why we see so many governments worldwide turning to this savior school of economic thought. I'm always frustrated when I hear a conservative spit out the word "socialism" as if it is somehow evil. In their heart they believe it is evil even as they cozy up to the government trough of government distribution sucking loudly. In reality even the most hardened conservative believes in some socialism. We can spit out the word socialism as if it is evil - or we can take some advantages of socialism where it makes sense. Same argument can be made for Keynesian thought. These terms - or ideas - are NOT absolute. Just as keynesian ideas are not meant to convert a government, neither is Austrian School - at least in my mind. It is economic thought - that's all. It offers ideas to guide government, not offering some form of government that is somehow different. It offers the ideas that an economy has natural swings from growth to correction. It suggest that in the good and bad times government not meddle. If government doesn't meddle that bubbles will not be nearly as large and the consequences not nearly as devastating. So how is this accomplished? As the economy grows there is more demand for money - as there is more demand for money, interest rates rise. This of course then is self correcting for as interest rates get higher people put their money into banks so they reap the reward of higher interest rates. ....Then as the economy falters, interest rates become less and people put their money to work again with the result that jobs are created and the economy improves. All I suggest is that this thinking - along with thinking from all the other corners of the economic world be considered. .... By failing to listen to this thinking, Greenspan tried to stop the natural economic swings. Greenspan made things worse - not better - and as we now see Krugman would have made it worse yet. Greenspan knows he was wrong - he admits that. So we now know the economy will ebb and flow and even the best of intentions can't stop that. Now we find ourselves in this viscous circle of ever expanding debt to try once again to stimulate. Well we can stimulate but we better understand the down side of doing so. If we fail to listen to all groups we will surely once again stumble. To Obama's credit he has a curious mind and listens to disparate groups. That is one of things that attracted me to him. That doesn't mean for a second that I think or even hope he will become a devoted Austrian thinker anymore than I think he should or will come to the conclusion that only more and more keynesian thought will provide the answer. Neither most surely will do that - but to dismiss the economic thinking especially after what we have learned under Reagan and Bush would to be to do so at our own economic health - in my most humble opinion.

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