Wherein Dean Baker and I take a shave with Occam’s razor…

November 3rd, 2014 at 9:00 am

And yet, he remains bearded! More on full employment, over at PostEverything.

Print Friendly, PDF & Email

4 comments in reply to "Wherein Dean Baker and I take a shave with Occam’s razor…"

  1. Larry Signor says:

    Full employment is obviously a superior state, as implied by the “Diamond coconut model”. The US economy is at some inefficient point on the natural rate continuum. I hope Ms. Yellen continues to emphasize this point.

    The trade deficit is certainly a domestic demand diminishing fact, but we will get little support for that view from corporate America [think GE, Walmart, Apple, GM, et.al]. Since John Roberts gifted corporations with the same rights as individual economic actors, addressing the national account imbalance seems like a heavy lift.

    Is infrastructure investment even a viable idea with the deficit hawks high flying? I have serious doubts, no matter the needs and benefits of such a program.

    In short, the Fed seems to be the only game in town and they are being constrained by corporate America and the 1%, who have nothing to gain from any of these policy changes. There seems to be very little chance of improving the economic well-being of most Americans, and I am an optimist.

  2. Smith says:

    “3.) With fiscal stimulus sidelined by gridlock, the Fed is the only game in town.”

    It is perhaps inadvisable to abandon the immediate need for proper policy due to opposition. Now is the best time to fight against those who impede a robust recovery. When official unemployment reaches 5% or 4.9% it will only be harder. Relying on the Fed to protect a slow incomplete recovery dooms those awaiting relief and improved lives to lost decades instead.

    The time for trying Clintonism has passed, the idea that moving rightward enough on issues to gain power would serve the higher purpose of enacting important, if somewhat watered down progressive measures did not work.

    Instead of relying on half measures from the Fed, progressives should promote proven ideas that previously worked (see New Deal, Eisenhower tax rates, Nixon environmentalism, Ford’s Equal Rights Amendment)

    Whether it’s climate change, the environment, fair trade, labor rights, equal pay for women, child care, free college, debt relief, or replacing so called immigration reform with a bill that ends employer sponsorship*, none of this can happen without mainstream politicians taking up the cause and educating the public (see E. Warren). Leaving the progressive agenda to the far left which is often easily painted as extremists (because they are) dooms success.

    Most Democrats do not take up the fight because they are beholden to the same vested interests and donors. It is not about money either, because the internet offers a way to counter big money. It is more about someone willing to help others and offend the rich, the well to do, the wealthy, not just the 1%, but the privileged 5%, 10%, the upper tier who run things. But you can’t fix things without hurting someones (excess) profits and income. Democrats pretending otherwise is a bigger hoax than the Republicans lies about austerity, deficits, and tax cuts.

  3. Smith says:

    Just to be clear, if someone isn’t going to call the Republicans idiots for arguing against stimulus, they don’t deserve my vote. Progressives should argue those blocking investment weaken America and embolden (pick any foreign country or region) ___________. Who should we rely on for guidance anyway, Keynes who led us out of the Great Depression or Bush’s Chief Economic Advisor who led us into the next? Oh surprise, even he says Keynes. http://www.nytimes.com/2008/11/30/business/economy/30view.html Besides, it’s unpatriotic to oppose deficit spending. If you’re weak on spending, then you are giving comfort to the Chinese, Russians, and even Europeans who are happy to see us at a competitive disadvantage. If you oppose clean energy, then you are funding extremists, not to mention big oil. If you believe the climate change deniers, then I’ve got some beach front property I want to sell you in Orlando. That’s rhetoric for the masses.

    But the real deal is if you’re making over $250,000 a year, your taxes should go up, and over $1 million a year, they should go up a lot. Programs sold as win win are really win lose. They also don’t work. Obamacare is progress, but if you have a high deductible plan, or live in a state without the extension of medicaid, the compromise can still leave you delaying care until it’s too late. We can raise payroll taxes on those making over current maximum income taxed, or cut benefits, its a win lose. Democrats should stop pretending otherwise and take sides. You either favor the rich or the poor and middle class. The rich neither need the government programs, nor a full employment economy, and definitely not larger government in any form that will threaten to raise tax rates, especially on them, because that’s where the money is.

    • Smith says:

      I think this reenforces my point about win lose and lose win. http://www.nytimes.com/2014/11/04/opinion/elections-2014-quick-takes-from-columnists-and-contributors.html There are winners and losers in policy choices, the win win politicians who try to be everything to everybody are not honest. When you couple greater EITC with lower marginal tax rates for the rich as Bush, and are 80% retained by Obama, guess who really wins and who loses. When you raise mileage standards instead of raising the price of oil, people can drive farther on a $1 of gas as the climate warms, the oil companies sell just as much oil, who wins and who loses?