It's the Economy, stupid - Languishing & Lingering after the Great Recession

The solutions are obvious and if Washington listened to the business community our economy would be growing at full throttle.

Lower the cost of labor (wages are not reflective of the full cost) and we get more people working.
Lower the uncertainty of employing labor and we get more people working.
Get rid of the disincentives to employ labor and we get more people working - for example an employer going from 49 to 50 employees could face ridiculously high costs for adding one person, that is simply a dumb way to regulate.
etc.
etc.

 

Thats what the "free marketeeers" said about anti-trust and labor laws of the 30s, civil rights/employment rights laws of the 60s, environmental laws of the 70s and the economy thrived through all of those "doomsday" scenarios.

And then we tried supply side economics in the 80s and the income disparity began to widen

And then we deregulated banking and financial services and we were hit with the worst recession in 75 years.

And then we tried supply side again in 00s, with even greater income inequality and a lost decade for the middle class.

"More please, sir"

 

I think the pendulum actually swings. Occasionally there is not enough regulation and occasional there is too much. I think we are in a period of too much regulation. Am I to assume you disagree with the premise that there have been times of too much and other times of too little regulation? On an overall basis? On an industry by industry basis?

 

Given that Obama has delayed numerous environmental regulations, reformed tax regulations for small businesses and implemented other regulatory reform, what specific regulations would you eliminate or delay?

Banking/financial services regulations? Environmental and/or workplace safety regulations?

Or just those associated with Affordable Care Act? Do you think part-time workers with no health care will be more productive than full time workers with an employer-sponsored health plan for the first time?

Or maybe you agree with the Republican plan to overturn 75 years of laws/regulations covering overtime pay, since the Fair Labor Standards Act, that would effectively end overtime pay for working more than 40 hrs/week and give employers (not the workers) the option of offering comp time (or not)

 

the track record of this neo-hooverite idiocy in a period of economic crisis is self-evident empirically: it is a disaster. it has never worked. it is not working now. it will never work. from the depression of the 1930s forward this has been clear. the state has to become a motor of economic activity. of course, because capitalism is so awesome, a good old war helps.

but hey, don't let actual historical data get in the way.
neo-liberal/monetarist actions have been worked fabulously since 2008.
why rethink anything?

 

I gave an example in my previous post. In Obamacare there is an arbitrary cutoff for requiring an employer to provide health insurance or pay a penalty. This regulation is causing some employers to limit hiring and some to limit employee hours to part-time status. This regulation is counter to encouraging employment. I think there are better ways to address the issue of health insurance that would serve the President's objectives while avoiding disincentives to hire.

For example I think banks were allowed to engage in investment banking activity that never should have been allowed (a form of under regulation) and required to engage in sub-prime lending activity to encourage home-ownership (a form of over regulation) - either way creating regulatory problems that contributed to the financial crisis. Currently regulations are too strict and lending activity has suffered and is hindering economic growth. so on a case by case basis we can look at these issues in detail - but my point is that it is rare that we have "perfect" regulation. That is my premise, you have not stated if you agree or disagree with the premise.

I think we should always strive for "perfection" even if we never achieve it - but the key is to acknowledge the potential for over and under status.
--- merged: Apr 9, 2013 4:28 PM ---

I did not ignore, I disagreed. People with cash or cash-lords are not leading, if they were we would not have this economic slow growth situation. Cash lords tend to want to generate more and more cash. A slow growing economy is not helpful in this regard. To the degree some companies are generating record profits and hoarding record levels of cash does not mean they are getting what they want. Often record profits today, can mean that cash is not being invested to generate record profits in the future. If you look at the history of Amazon this is a company that has never had relatively high profits and high profit margins, but Wall St. highly values the company because they continually put cash to use for future profits. Hopeful investors like that relative to record profits from a company like Exxon Mobil - based on valuation ratios.

Our perspectives on this question are very different.
--- merged: Apr 9, 2013 4:33 PM ---

When you write something like this it begs several questions. For example "worked" from whose perspective? It has clearly "worked" for some people. How do you define "worked"? Does "worked" mean everyone gets the same result regardless of input, i.e. - talent, skill, effort, intellect, etc? I could go on and on with questions, but I won't. I generally do not understand what you are trying to say.

 

ok, ace: if by "worked" you mean made recessions/depressions worse/more protracted, increased class stratification and/or conflict, undermined social cohesion and so on, then yes, monetarist approaches to recession/depression have worked. to know this, you need only look at actual data about really existing historical situations. data to support this claim is quite easy to come by. you cannot win this argument, ace. there's more to economic policy than what makes aceventura feel good by appealing to his zany sense of metaphysical symmetry.

 

I want to know what you mean!

The "monetarist approaches" have rarely been implemented in a pure form. The majority of macro-economic governance has been Keynesian.

Not necessary.

 

ace.....you arbitrarily split subject and verb from the object of a sentence in order to remain mystified about what i'm talking about?
grow up.
jesus christ.

 

Or, you can communicate your thoughts in a clear manner. If you want to avoid questions, just say so. However, if you post something that begs a question it is safe to assume I will ask, so another strategy would be to avoid those kinds of posts. Do you really believe post 1930's US macro-economic policy has been a disaster??? Come on, you get serious. There have been some failings, no doubt - but to suggest the entirety of post 1930's US macro-economic policy has never worked???? I know you will continue to say it is all about me and my problems - I know better and any serious reader knows better.

or, should it just be:

Roach - Ace grow up.
Ace - Roach, you grow up.
Roach - No, Ace you grow up.
etc.
Etc.
Etc.

Never takes long for discussions to go into the gutter, does it?

 

look at your post above my last one. i characterized exactly what you did. sorry if you don't like it. maybe try adopting tactics less obviously ridiculous and things can not get derailed by the fact that you are doing ridiculous things.

i don't have any interest in playing this game with you.
if you want to discuss things like a grown-up, then fine.
if not, then i won't waste my time.

as for the somewhat more serious question...there's abundant data that monetarist/hooverite/conservative approaches to the early phases of the depression made sure it would be longer and worse than it needed to be. if you like, i can point you to some of it.

 

balance-sheet recessions are historically unresponsive to monetarist policies.
persisting in them merely demonstrates their ineffectiveness.
that's where we are in the actually existing world.

 

I know what I did.

Your post lacked clarity, my post in response was to illustrate that. The ridiculous follows the ridiculous. It would not be difficult for you to respond to questions in a serious manner, if you did I think the caliber of the questions would improve.

I think you do.

Do grown-ups discuss things by simply telling others to grow up?

Anytime you respond by directing your comments to me as an individual rather than the topic, it is a waste of your time.

My impression of your point of view is that there is a commonly shared goal of some utopian economic state of being. Anything short of the undefined utopian economic state of being is failure. In reality there is no shared economic goals held by different elements that make up an economy - there is no ideal that everyone is working toward. In fact in most instances the different elements within the economy are at odds with each other - there is perpetual conflict.

To illustrate one aspect of the point above - look at the goal of full employment. Assuming there is agreement on what full employment is in an economy, you will have many factions within an economy who don't care or don't have an interest in full employment, while others do. Or we could look at something like pricing in the economy - i.e. inflation v. deflation v. stable pricing. Some in the economy will work toward any one of the three. Then we have the Fed who may act in a manner that causes inflation but they will have the stated goal of pricing stability. And so it goes as you drill down into various economic issues.

You however, seem to hold on to some il-defined notion of some kind of utopian state. And therefore define anything short of that as failure. When in fact at various time to different factions economic policy may be doing exactly what they want it to do.

And you think I have a problem? How about going at least one level deeper into these issues, if you dare.
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You need to say global demand for what. Global demand for food is not weak. Global demand for education is not weak. Global demand for information (internet content) is not weak. There are more people on the planet today than 5/10 years ago, by definition many of the things needed to sustain people are not in low demand. I think what is occurring is weak global economic growth due to inefficient capital allocation. Or governments consuming more and more economic resources and allocating those resources in a wasteful or inefficient manner resulting in slow economic growth.

In the US for example if the real unemployment rate is close to 15% (those who can work but are discouraged from looking) and if real labor participation rates accounting for the retired/disabled/youth is at low levels the economy will grow slowly by definition. It would be like having an engine with four cylinders but only 2 operate. The engine will produce output but not at full capacity.

 

ace, here's the problem. your assumptions are entirely arbitrary, the stuff of introduction to economics textbooks. you adhere to them for no apparent reason beyond an intellectual rigidity. and your m.o. never varies. and you don't deal with data. like ever. except when it's chopped up to conform to your ideological predispositions.

in this case, monetarism has historically had only negative effects when it's been used as a policy logic to address deep capitalist crisis. there's no way around this. your dodging and weaving makes no difference. here's a short paper that outlines the problems:

http://www.paecon.net/PAEReview/issue58/Koo58.pdf

 

almost all these questions are addressed in koo's paper linked above.
just saying.