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Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (284)	7/30/2003 11:37:41 PM
From: Lazarus_Long	Read Replies (1) \| Respond to of 1417

The writer is professor of economics at the University of California at Berkeley That tells it all. Does the word "bias" come to mind? Hmmmmmm. The way I remember this is AG sitting on the gas pedal had a whole lot to do with making this mess. He used the Millenium Bug (remember that?) as an excuse to REALLY pump up the money supply. And it went right into the already bulging bubble of the stock market, particularly the NASDAQ. So we should do it again? I think the 1930's themselves provided proof that Keynesian economics doesn't work. The gov't sat on the gas; workers leaned on their shovels but collected paychecks. Then the gov't let up on the gas. And 1937 followed. Now it might be argued that the gov't didn't push HARD ENOUGH on the gas in the 1930's. After all, WW2, characterized by massive gov't defense spending, ended the Depression. True, but more than that was involved. The gov't also, as a small part of the war effort, provided seed money for revolutionary technology- -radar, large aircraft, nuclear applications, microwaves, penicillin and other medical advances. After the war, the economy slumped for a while. But then, using the new technology developed in the war, it spurted again and kept going. And was helped by continuing gov't funding of R&D during the Cold War. Speaking of which: it was EXACTLY that technology developed during the Cold War that was exploited in the Booming '90s when the Cold War was over. Transistors and ICs? The gov't, through DOD and NASA, funded essentially every cent of their development and was the only customer for them back when a single transistor or IC cost hundreds of dollars. ARPANET, which became the internet? Developed and funded by DOD to provide robust wartime communications. Maybe the "pump priming" Keynesian economics advocated really only works while you keep feeding gas. If you want longer term results, maybe you need to buy and plant seeds and fertilize and water them.