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ndebord
February 2nd, 2009, 12:52 PM
Whenever there is a major economic downturn, there exists the opportunity to change the way things have always been done. Perhaps our time is one of those moments. If so, then what economic theory should we pursue to get out of these economic doldrums that afflict us today?

One theory:

Alexander Hamilton'a American School of economic theory predated Keynesian economics and opposed the Brit's policy of Free Trade. As we here in America have been promoting Free Trade* now since WWII without much debate, perhaps it is now time to revisit his core tenets.

1) protecting industry through selective high tariffs (especially 1861–1932) and some include through subsidies (especially 1932–70)*

2) government investments in infrastructure creating targeted internal improvements (especially in transportation)**

3) a national bank with policies that promote the growth of productive enterprises***


* Do remember that the Brits refused to enable protectionism when their initial ground-breaking industrial revolution fell on bad times and so lost their lunch to their cousins across the pond and to Germany. (Germany always maintained a base of industry that was protected and so today they have the most robust industrial system maintained by a large base of small, diversified companies.)

** FDR set the role model for this bootstrap approach to reverse the ills of a depression and Obama looks like he is going to follow in his footsteps.

*** Easily enough done. Nationalize the worse producing bank of modern times: CitiBank (Hamilton's bank is not big enough--Bank of New York)

* Finally, the concept of free trade rests upon the premise that all players in global trade play by the same rules. As we have totalitarian regimes with large manufacturing capacity that do not accept this premise, the playing field is tilted against those countries that do.

Judy G. Russell
February 2nd, 2009, 01:10 PM
what economic theory should we pursue to get out of these economic doldrums that afflict us today?If I had the answer to that question, I'd be rich beyond even my wildest dreams.

ndebord
February 3rd, 2009, 03:20 PM
If I had the answer to that question, I'd be rich beyond even my wildest dreams.

Judy,

Not necessarily. You could have the idea, but not the clout to implement it!

I remember a Breslin column years ago about a nut job who wanted to install a monorail system in Manhattan (from the Battery to the Bronx) that would let you make the trip in minutes, not hours. So insistent was he (supposedly) that Bellevue became his abode.

Peter Creasey
February 3rd, 2009, 03:42 PM
what economic theory should we pursue to get out of these economic doldrums that afflict us today?

N, Is history repeating itself?


Is history repeating itself?

__________________________________________________ _________________________

Thomas Jefferson

Hard to imagine T.J. wrote these 200+ years ago..





John Kennedy once said to a assembled group of scholars in the White House * I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered at the White House - with the possible exception of when Thomas Jefferson dined alone."

__________________________________________________ _______________________________



The quotes below could prove his point.



His words have come to pass.................



When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe .



Thomas Jefferson





The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.





Thomas Jefferson



It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.





Thomas Jefferson





I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.





Thomas Jefferson





My reading of history convinces me that most bad government results from too much government.





Thomas Jefferson





No free man shall ever be debarred the use of arms.





Thomas Jefferson





The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.





Thomas Jefferson





The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.





Thomas Jefferson





Very Interesting Quote:



In light of the present financial crisis, it's interesting to read what Thomas Jefferson said in 1802:





'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.

Judy G. Russell
February 3rd, 2009, 04:37 PM
Not necessarily. You could have the idea, but not the clout to implement it!Me, I wouldn't even have the idea.

Judy G. Russell
February 3rd, 2009, 04:47 PM
Jefferson is generally a fun read even when he was talking about a simpler world than we were born into. I'm in particular agreement with his sentiment that: "Every generation needs a new revolution."

ndebord
February 3rd, 2009, 09:20 PM
Jefferson is generally a fun read even when he was talking about a simpler world than we were born into. I'm in particular agreement with his sentiment that: "Every generation needs a new revolution."

Judy,

Representative democracy, if not polluted by elite control, provides government with bottom up corrections. However, if you think in terms of the cultural revolutions of the Chinese and Russians, then, "No, we don't need a revolution every generation. God forbid!"


We also don't need Trotskyite Neo-Cons pushing absolutist solutions to other people's problems out of our dime.

Jefferson was the converse of Hamilton in many ways.

Judy G. Russell
February 3rd, 2009, 10:48 PM
if you think in terms of the cultural revolutions of the Chinese and Russians, then, "No, we don't need a revolution every generation. God forbid!"There are other types of revolutions, y'know. The sexual revolution was one!

ndebord
February 4th, 2009, 09:44 AM
There are other types of revolutions, y'know. The sexual revolution was one!

Judy,

Child of the 60s though I was, (Your Honor) I have no memory of the alleged acts you are referring to...

;-)

Judy G. Russell
February 4th, 2009, 09:50 AM
Child of the 60s though I was, (Your Honor) I have no memory of the alleged acts you are referring to...;-)Relax. The statute of limitations has run.

ndebord
February 4th, 2009, 10:12 PM
C'mon people. This ain't the dumbest forum out there, so give. I would really like to hear some opinions about where we as a country should go, economically speaking. I've put out my two cents worth, so give it up! (Please)

Jeff
February 5th, 2009, 12:41 PM
C'mon people. This ain't the dumbest forum out there, so give. I would really like to hear some opinions about where we as a country should go, economically speaking. I've put out my two cents worth, so give it up! (Please)

Henry VI: "The first thing we do, is kill all the lawyers"

Jeffrey I: The first thing we do, is foreclose on all of the bankers' houses.

All the bankers, all their houses, deserved or not. And no tarp to live under.

- Jeff

fhaber
February 5th, 2009, 02:42 PM
Start with temporary nationalization, a la Sweden, of all the big banks. We should have done this last September.

Glass-Steagall comes back, and more. Bankers are going to be scared rabbits for a generation, whatever you do. Close that barn door behind the horse and regulate. Limit and de-obfuscate all those derivative products, and make the worst one illegitamate.

Truly massive public works programs. Public works these days includes intellectual property. Biden is a tool of the MPAA and RIAA. Stifle him. Freeing Mickey Mouse will generate some sort of flurry.

Ask the Mikado what the appropriate punishment is for the worst offenders. We have a worldwide reach now, thanks to the worldwide mess we made. Don't forget the ratings services when you budget for thumbscrews.

Watch for deflation and practice runnining for the hills.

Judy G. Russell
February 5th, 2009, 08:42 PM
C'mon people. This ain't the dumbest forum out there, so give. I would really like to hear some opinions about where we as a country should go, economically speaking. I've put out my two cents worth, so give it up! (Please)When it comes to having even so much as a clue what to do economically, count me among the dumbest out there. Fact is, I simply don't understand any portion of this, or how to fix it.

ndebord
February 5th, 2009, 09:15 PM
When it comes to having even so much as a clue what to do economically, count me among the dumbest out there. Fact is, I simply don't understand any portion of this, or how to fix it.

Judy,

I was a gadfly at college: 163 credits undergraduate. (I was there to help 'Nam vets with various programs that you could only provide in a major Metropolitan city and City College of New York was at the epicenter. '75-80 were my years doing this kind of stuff.)

So I took economics among other subjects and at CCNY we had an eclectic range of professors from ex-pats from Europe, to homegrown, to out-of-towners who came to NYC for all the old reasons. One theory was the longwave theory of economics:

Judy G. Russell
February 6th, 2009, 02:14 PM
One theory was the longwave theory of economics:I'd rather not have to get into another major war to try to get out of these economic doldrums, thanks anyway.

ndebord
February 6th, 2009, 08:30 PM
I'd rather not have to get into another major war to try to get out of these economic doldrums, thanks anyway.

Judy,

We've not been saddled with Hoover's inaction this time around and although the Republican rump party is doing its best to emulate HHH, the votes are there to do stuff that they didn't even try back then. Remember, no unemployment insurance, no social security, no Medicare/Medicaid, etc. And no global economy where the various parts of the puzzle can at least attempt to work together to stop the bleeding.

(BTW, Kondratieff was done in by Stalin because he wouldn't say Capitalism would be destroyed, rather said it would go through cycles of boom and bust. Shades of Galileo.)

Judy G. Russell
February 7th, 2009, 08:34 AM
We've not been saddled with Hoover's inaction this time around and although the Republican rump party is doing its best to emulate HHH, the votes are there to do stuff that they didn't even try back then. Remember, no unemployment insurance, no social security, no Medicare/Medicaid, etc. And no global economy where the various parts of the puzzle can at least attempt to work together to stop the bleeding.That gives me some hope, but not a whole lot, frankly.

ndebord
February 7th, 2009, 11:06 AM
Start with temporary nationalization, a la Sweden, of all the big banks. We should have done this last September.

Glass-Steagall comes back, and more. Bankers are going to be scared rabbits for a generation, whatever you do. Close that barn door behind the horse and regulate. Limit and de-obfuscate all those derivative products, and make the worst one illegitamate.

Truly massive public works programs. Public works these days includes intellectual property. Biden is a tool of the MPAA and RIAA. Stifle him. Freeing Mickey Mouse will generate some sort of flurry.

Ask the Mikado what the appropriate punishment is for the worst offenders. We have a worldwide reach now, thanks to the worldwide mess we made. Don't forget the ratings services when you budget for thumbscrews.

Watch for deflation and practice runnining for the hills.

Frank,

Glass-Steagall will probably never come back, but I too hope they find a way to det rid of derivatives. Public works programs... well shovel ready projects seem to be the middling way of doing that this time around.

As for deflation, we could have staglfation instead.

Running for the hills might actually come in handy if the worst case scenarios for global warming pan out.

earler
February 7th, 2009, 11:13 AM
Hoover was not all that inactive because some of his iniiatives were taken up by fdr. In any case, economics was prettry primitive in those days. Central banks didn't exist or had no power. Finally, fdr didn't get us out of the depression. It was the 2nd world war that did that.

ndebord
February 7th, 2009, 12:22 PM
Hoover was not all that inactive because some of his iniiatives were taken up by fdr. In any case, economics was prettry primitive in those days. Central banks didn't exist or had no power. Finally, fdr didn't get us out of the depression. It was the 2nd world war that did that.

Earle,

It was not just WWII that got us out of the Great Depression of 1929, but it certainly didn't hurt and you are very much correct that they did not have a handle on intervention in those days.

However if you are of the persuasion that FDR was the font of all evil, then those government programs that he put in place should give you no comfort this time around: Social Security, Unemployment Insurance, Glass-Steagall Act of 1934!*

* unfortunate repeal by the Republican controlled Congress and Clinton. Not to forget how the savings and loan industry collapsed due to the Garn-St. Germain Depository Institutions Act, touted and signed by that giant of the conservative movement: Ronald Reagan.

earler
February 7th, 2009, 05:47 PM
The american economy improved for a few years during the first term of fdr, then fell again. It almost conventional wisdom today that it was the government orders for armaments that pulled the country out. Unlike after earlier wars, there was no recession, much less a depression, after the war was over, this because of the savings accumulated by wives working in factories and soldiers' accumulated pay. These made the early post war years prosperous.

ndebord
February 7th, 2009, 10:17 PM
The american economy improved for a few years during the first term of fdr, then fell again. It almost conventional wisdom today that it was the government orders for armaments that pulled the country out. Unlike after earlier wars, there was no recession, much less a depression, after the war was over, this because of the savings accumulated by wives working in factories and soldiers' accumulated pay. These made the early post war years prosperous.

Earle,

Aaahhh? Savings by the soldiers and wives made the country prosper after the war? Perhaps, but not only that. Try being the only major capitalist industrial power. As for FDR, well that is a lightning rod for some people and so I'll just leave it at that.

earler
February 8th, 2009, 03:39 AM
It's not enough to have industrial capacity. You need a market for what that capacity produces. The enforced savings from the war provided that market.

ndebord
February 8th, 2009, 10:12 AM
The american economy improved for a few years during the first term of fdr, then fell again. It almost conventional wisdom today that it was the government orders for armaments that pulled the country out. Unlike after earlier wars, there was no recession, much less a depression, after the war was over, this because of the savings accumulated by wives working in factories and soldiers' accumulated pay. These made the early post war years prosperous.


Earle,

Not quite that simple.

http://www.bloomberg.com/apps/news?pid=20601212&sid=aSW1NKhs91.w&refer=home

...1937. In that year, the economy was improving and Roosevelt -- on the advice of his bankers -- turned conservative. He cut government spending, raised bank reserves and increased interest rates. It was a disaster. The U.S. plunged into a second recession.

earler
February 8th, 2009, 03:04 PM
Thank you for the reference to the bloomberg article, which itself over simplifies the situation, too. The recovery had run out of steam by 1937 and unemployment continued at a high level. The banks required more reserves in order to make loans.

Lindsey
February 11th, 2009, 12:37 AM
Start with temporary nationalization, a la Sweden, of all the big banks. We should have done this last September.

Glass-Steagall comes back, and more. Bankers are going to be scared rabbits for a generation, whatever you do. Close that barn door behind the horse and regulate. Limit and de-obfuscate all those derivative products, and make the worst one illegitamate.

Truly massive public works programs. Public works these days includes intellectual property. Biden is a tool of the MPAA and RIAA. Stifle him. Freeing Mickey Mouse will generate some sort of flurry.

Yes, yes, and yes. I'm even with you about the Mikado. :eek:[/QUOTE]

Lindsey
February 11th, 2009, 12:39 AM
Fact is, I simply don't understand any portion of this, or how to fix it.

Do you think anybody else does? That's how we got here in the first place!

Lindsey
February 11th, 2009, 12:46 AM
The american economy improved for a few years during the first term of fdr, then fell again.

And the reason it fell again was that in 1937, FDR decided to be a deficit hawk and tried to raise taxes and cut spending. The economy had not recovered sufficiently to handle that, and FDR ended up undoing a lot of the good his policies up until then had done. If he had stuck with the Keynes, he and the country would have been a lot better off. [Sorry, I see now that Nick had made the same basic point. Didn't mean to be repetitive.]

You're correct that quite a bit of what FDR did, especially in the early days of his administration, built on plans that had been laid by Hoover or were formulated by Hooverites that remained in the Treasury after Franklin became president. But the difference is that FDR had the intestinal fortitude to put them into action, where Hoover hesitated.

Lindsey
February 11th, 2009, 01:03 AM
...1937. In that year, the economy was improving and Roosevelt -- on the advice of his bankers -- turned conservative. He cut government spending, raised bank reserves and increased interest rates. It was a disaster. The U.S. plunged into a second recession.

Paul Krugman has said the same thing any number of times in his column and on his blog.

See especially:

http://krugman.blogs.nytimes.com/2008/11/08/new-deal-economics/

http://www.nytimes.com/2008/12/01/opinion/01krugman.html?scp=2&sq=1937&st=nyt

Judy G. Russell
February 11th, 2009, 10:21 AM
Do you think anybody else does? That's how we got here in the first place!Unfortunately, no, I don't think anybody else does. Sigh...