All right, this will be just a short post. Mainly, I just wanted to put something up because I haven't in a little while.
I do not pretend to know all the relevant history concerning what I am about to briefly reflect on. But here I go anyway. Apparently, after Democrats had taken power in the mid-1930s in overwhelming numbers during an economic crisis (sound kind of familiar?), Republicans voted, to a man, against all of the economic policies implemented by the Democratic majority to stimulate the economy Keynesian-style. Only 3 Republicans last week voted for the stimulus package. So true that history repeats itself.
Other parallels are striking. The 1920s saw large-scale de-regulation under Republican administrations and Congressional majorities. So did the early 2000s and even the late 1990s under a centrist Clinton administration and the later Bush administration, together with Republican majorities in Congress. (As an aside, surely it made more sense in the 1920s than in the 1990s/2000s to de-regulate, as most of the woker protections and etc. were "new" (though more were introduced in the 1930s and 1940s, things we are very familiar with today like Social Security)).
I can only hope that efforts to produce a broader consensus are more successful in further initiatives by the Obama administration to resolve the financial crisis and jerk the economy back on track than we have seen so far in 2009. I also consider it a bit of a foolish political gamble by the Republicans to take the contrarian view in the current climate. People want solutions, not invective. If the last few weeks becomes the norm rather than an aberration-- if Republicans continue to unite in opposition primarily to be the opposition-- then I think they may find themselves on the wrong side of history yet again. And hoping for a future age in which to resurge.
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2 comments:
Obviously I don't understand macroeconomics because when I throw off all the theory and try to think about this economic crisis in a direct, common-sense way, what we are doing seems like madness: curing a greedy and irresponsible debt-fueled mania to loan and flip homes as quickly as possible for high profits all around with another massive and - given that we are borrowing all the money on top of previous trillions of borrowed money for previous irresponsible tax cuts and an irresponsible war of choice, and again with the proviso that I am coming from the common-sense point of view here - irresponsible, debt-fueled spending spree on whatever project any congressman can come up with to benefit her district, and anything else, kitchen-sink style. Doesn't that feel irresponsible? So from a common-sense point of view, I really don't get it. I understand what seems like the obtuse Keyensian point that we are boosting government spending so as to fill a gap between the economy's estimated capacity and its current product in the recession, but still the whole thing is just counterintuitive to me. That point seems about as useful to me as some Marxian theory capitalism generate periodic economic crises so as to destroy destroy the ridiculous plenty it creates and restore conditions of scarcity. But then I have to say that I hated studying macroeconomics, which often seemed like a bizarro-world to me, with models premised on patently absurd assumptions about human behavior overlaying other such cracked models, and so on, with a little calculus thrown in, so as to produce conclusions that are then somehow putatively reliable guides to policy.
But we have to trust the experts, don't we? b/c who else do we trust?, and if a Nobel-prize winning economist like NYTimes Paul Krugman tells us to spend like the wind, lest we all sink into a morass like the Great One of the '30s, then we just have to trust him.
Bizarre solutions for a bizarre world.
I feel your pain, BizzaroMan. And I was an economics major! I almost did not finish my degree, because I had some of the same reservations you did-- the precision applied on the back-end when the assumptions at the beginning were so foggy seemed to lend the conclusions greater veracity and respect than they deserved. It bothered me that intense mathematics buttressed so many models that were, at their heart, built on some seriously precarious assumptions.
But it's all we have, right? What else can we do? We have released the untamed beast of capitalism, now we have to deal with it the best we can.
But one thing that this financial crisis has revealed is how little even the experts understand about how our complex financial-capital distribution system works. It's taken months, and Treasury and the Fed still haven't really figured out what to do. Disturbing, really. What would happen if we had a REAL crisis-- I mean, some kind of plague or asteroid hits the earth. This is just some bullshit built around home mortgage trading, and it's knocked us down pretty badly.
Sobering.
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