What you are talking about is greatly at variance with how I understand market to work, and since I've spent my entire adult life learning about how markets work I think my scepticism is warranted.
Sure, anything that passes gets larded with pork but even the pork seems pretty popular (maybe not in aggregate, but every congressman seems to be popular for getting pork for their own district).
And your primary system pretty much guarantees that politicians are popular with their base.
Ah, that would explain my confusion, you were making a totally different point to the one I thought you were.
So now I know what you're actually talking about, we can have a proper discussion:
The best way I can think of to describe the US economy is either corporatist or state capitalism.
I'd say that's fair. In fact I'd say the US economy is a combination of corporatism and neomercantilism (with some free market capitalism in the mix), the balance shifting depending on which party is in power.
Secondly, I suspect it got to be that way because people expected things from the market that the market can’t, and shouldn’t, provide them, and the state wasn’t going to deal with the instability involved in letting them find that out the hard way.
Yes, I can go with that too. I consider one of the problem the US political system has is that its too democratic and that leads to popular demands become law (even in the face of good sense) more often than they should.
The tricky part is working out what to do about it.
First, sure the laws of thermodynamics predict that we can't grow forever but that gives as no predictions as to when it will happen. That depends a lot on how our technology progresses. We could hit a limit in 20 years, or in 20 billion. And the existence of constraints definitely doesn't imply we will have to lower our standard of living. Our steady-sate level may be orders of magnitude higher than what we have now.
As for the rest of your comment, none of it follows. Growth makes targeting the money supplier a bit trickier, so yes some inflation is to be expected. But the only intervention that requires is a central bank that tries to keep prices level by fiddling with interest rates (or just use Friedman's grow the money supply at x% rule, that would probably work well enough). That's a very minor government intervention in the grand scheme of things.
This to me gets to the heart of the issue of tolerance.
You're not tolerant of something if it doesn't bother you - I don't tolerate gay people because I don't have any kind of moral or visceral problem with gay people, the above photo provokes no yuck response in me at all.
Real tolerance is finding something disgusting or offensive (and those two concepts are closely related in our brains) but putting up with it anyway. I tolerate people raising their children in a religious tradition - I don't like it, but I'm not going to try and stop it either.
Tolerance is a very important part of a modern society, I think too many people break things "up into things I like" and "there aughta be a law". The middle ground between those states is very important for the proper functioning of a diverse society, as well as being very important to libertarianism.
That may qualify as a legitimate externality, though really I don't see why consumers and businesses should be treated differently. Road use, petrol and/or congestion taxes would be a better bet.
New Zealand hasn't been part of ANZUS since the 1980s. In fact, we won't even let your warships inside our borders (I'm neither condoning nor condemning that policy, merely pointing it out).
I'll certainly stipulate though that the US Navy does a sterling job keep the open ocean safe. And no, it's not fair that you guys pay for all of that, though your politicians seem content to do so in exchange for the status of the US being #1 military power in the world.
This is certainly better than the status quo, but amounts to a specific tax on operating a taxi. Unless you think taxis impose some particular externality serious enough to merit correction, this is a worse idea than raising income taxes.
But the problem with the ratings agencies was their excessive optimism. When someone who is excessively optimistic starts looking at you askance, that's the time to worry.
Restricting offshoring would be a mistake, sure it causes specific jobs to leave the country, but those people are being paid in US dollars (directly or indirectly, it doesn't matter) and that money comes back, leading to more demand for exports.
No, it's not possible to do that either. Mitigating the unemployment increase during a recession is one thing, but monetary policy has no long-term power over economic growth or unemployment. You get drop in unemployment for a year or two, but then unemployment rises again, and inflation rises as well, so you'd have to loosen monetary policy even further to keep unemployment low ... and again and again until you have monetary policy as loose as it can get. At which point unemployment rises a lot as the effects of monetary policy wear off and inflation gets really high. This is what caused the stagflation of the 1970s.
And US intellectual property law is a problem in more ways than one. Whenever the US government negotiates a free trade deal with another country, they inevitably include a provision that requires the country to move their IP laws to be closer to what they are in the US.
Reading the open source article, it sound a lot like how unions work in New Zealand. The short version is that the right to join a union (and the right not to) are both protected by law. Joining a union is a personal choice. Union members have a collective employment contract with their employer and the employer is forbidden from negotiating with them individually. Non-union employees have an individual contract with their employer and negotiate as individuals, but can't strike.
The "full employment through monetary policy" article however, was somewhat disturbing. I didn't realise there were people who still thought it was possible to do that.
Here's the problem with "shovel-ready" projects. For it to be "shovel-ready" all the planning and so forth must have been done, which means the project was probably going to happen anyway. So even the "shovel-ready" projects are weak stimulus.
Infrastructure is actually not much good for stimulus (infrastructure can be good in the long run, but that's a separate issue).
According to Keynesian theory, there are two things good stimulus spending needs: it must be spent quickly, and must actually get spent (not saved). But infrastructure is slow - there's a lot of planning and decision-making that has to take place before you can build roads or bridges. Given that it takes time for any spending to start stimulating the economy, if you use infrastructure as the base for stimulus there's a good chance you won't get the effect until it's too late.
For speed, you can't beat tax cuts and transfer payments. For tax cuts I'd go with payroll taxes for the US because cutting them makes it cheaper to keep people employed (I'd also suggest cutting consumption taxes if you had them). For transfer payments, expanding unemployment benefits is not a bad idea (which you actually did, yes?).
I'm agnostic when it comes to fiscal stimulus, but if I were going to do it, that's what it would look like.
Oddly enough his prediction did kinda come true for New Zealand in the 1980s, the free market Rogernomics reforms were only possible because of the fiscal crisis. But while I'm glad the reforms happened, the suddenness of them caused some serious economic problems, we basically had a lost decade for growth and we ended up having to cut the government payroll in half in the teeth of a recession. IF we had been able to implement those reforms over 10-15 years instead of 4 years things would have been a lot smoother for us.
On “We are all neoliberals now”
And your assertion doesn't make it right.
What you are talking about is greatly at variance with how I understand market to work, and since I've spent my entire adult life learning about how markets work I think my scepticism is warranted.
"
I'm deeply sceptical of your interpretation of events.
For one thing there's nothing wrong with people being driven into bankruptcy. I mean it sucks for them, but the system can cope with that.
"
Sure, anything that passes gets larded with pork but even the pork seems pretty popular (maybe not in aggregate, but every congressman seems to be popular for getting pork for their own district).
And your primary system pretty much guarantees that politicians are popular with their base.
"
Ah, that would explain my confusion, you were making a totally different point to the one I thought you were.
So now I know what you're actually talking about, we can have a proper discussion:
I'd say that's fair. In fact I'd say the US economy is a combination of corporatism and neomercantilism (with some free market capitalism in the mix), the balance shifting depending on which party is in power.
Yes, I can go with that too. I consider one of the problem the US political system has is that its too democratic and that leads to popular demands become law (even in the face of good sense) more often than they should.
The tricky part is working out what to do about it.
"
This makes no sense to me.
First, sure the laws of thermodynamics predict that we can't grow forever but that gives as no predictions as to when it will happen. That depends a lot on how our technology progresses. We could hit a limit in 20 years, or in 20 billion. And the existence of constraints definitely doesn't imply we will have to lower our standard of living. Our steady-sate level may be orders of magnitude higher than what we have now.
As for the rest of your comment, none of it follows. Growth makes targeting the money supplier a bit trickier, so yes some inflation is to be expected. But the only intervention that requires is a central bank that tries to keep prices level by fiddling with interest rates (or just use Friedman's grow the money supply at x% rule, that would probably work well enough). That's a very minor government intervention in the grand scheme of things.
On ““Yuck” a Duck”
This to me gets to the heart of the issue of tolerance.
You're not tolerant of something if it doesn't bother you - I don't tolerate gay people because I don't have any kind of moral or visceral problem with gay people, the above photo provokes no yuck response in me at all.
Real tolerance is finding something disgusting or offensive (and those two concepts are closely related in our brains) but putting up with it anyway. I tolerate people raising their children in a religious tradition - I don't like it, but I'm not going to try and stop it either.
Tolerance is a very important part of a modern society, I think too many people break things "up into things I like" and "there aughta be a law". The middle ground between those states is very important for the proper functioning of a diverse society, as well as being very important to libertarianism.
On “Market liberals”
That may qualify as a legitimate externality, though really I don't see why consumers and businesses should be treated differently. Road use, petrol and/or congestion taxes would be a better bet.
On “Eddard Stark’s Ethics of Honor”
I don't know, I think a lot of A Song of Ice and Fire is about the injustices of a medieval society.
"
Ah, fair enough.
"
That seems unlikely. Danaerys was born on Dragonstone, she's actually hatched dragons from stone and she appears to be immune to fire.
On “Deal with the devil”
New Zealand hasn't been part of ANZUS since the 1980s. In fact, we won't even let your warships inside our borders (I'm neither condoning nor condemning that policy, merely pointing it out).
I'll certainly stipulate though that the US Navy does a sterling job keep the open ocean safe. And no, it's not fair that you guys pay for all of that, though your politicians seem content to do so in exchange for the status of the US being #1 military power in the world.
On “Market liberals”
Politics is tribal, if you don't affiliate clearly with a tribe, everyone tends to crap on you.
"
This is certainly better than the status quo, but amounts to a specific tax on operating a taxi. Unless you think taxis impose some particular externality serious enough to merit correction, this is a worse idea than raising income taxes.
On “Deal with the devil”
But the problem with the ratings agencies was their excessive optimism. When someone who is excessively optimistic starts looking at you askance, that's the time to worry.
On “Open-Source Unionism and Labor Scarcity”
The wage and price controls were a reaction to the inflation.
If Yglesias is only talking about the short-term, that's different.
"
Restricting offshoring would be a mistake, sure it causes specific jobs to leave the country, but those people are being paid in US dollars (directly or indirectly, it doesn't matter) and that money comes back, leading to more demand for exports.
Offshoring does not cause unemployment.
"
No, it's not possible to do that either. Mitigating the unemployment increase during a recession is one thing, but monetary policy has no long-term power over economic growth or unemployment. You get drop in unemployment for a year or two, but then unemployment rises again, and inflation rises as well, so you'd have to loosen monetary policy even further to keep unemployment low ... and again and again until you have monetary policy as loose as it can get. At which point unemployment rises a lot as the effects of monetary policy wear off and inflation gets really high. This is what caused the stagflation of the 1970s.
On “This American Life: When Patents Attack”
And US intellectual property law is a problem in more ways than one. Whenever the US government negotiates a free trade deal with another country, they inevitably include a provision that requires the country to move their IP laws to be closer to what they are in the US.
On “Open-Source Unionism and Labor Scarcity”
Reading the open source article, it sound a lot like how unions work in New Zealand. The short version is that the right to join a union (and the right not to) are both protected by law. Joining a union is a personal choice. Union members have a collective employment contract with their employer and the employer is forbidden from negotiating with them individually. Non-union employees have an individual contract with their employer and negotiate as individuals, but can't strike.
The "full employment through monetary policy" article however, was somewhat disturbing. I didn't realise there were people who still thought it was possible to do that.
On “All Deficits and No Jobs Make Homer Something Something”
Really? That's a really weird way to fund projects.
"
Here's the problem with "shovel-ready" projects. For it to be "shovel-ready" all the planning and so forth must have been done, which means the project was probably going to happen anyway. So even the "shovel-ready" projects are weak stimulus.
"
Infrastructure is actually not much good for stimulus (infrastructure can be good in the long run, but that's a separate issue).
According to Keynesian theory, there are two things good stimulus spending needs: it must be spent quickly, and must actually get spent (not saved). But infrastructure is slow - there's a lot of planning and decision-making that has to take place before you can build roads or bridges. Given that it takes time for any spending to start stimulating the economy, if you use infrastructure as the base for stimulus there's a good chance you won't get the effect until it's too late.
For speed, you can't beat tax cuts and transfer payments. For tax cuts I'd go with payroll taxes for the US because cutting them makes it cheaper to keep people employed (I'd also suggest cutting consumption taxes if you had them). For transfer payments, expanding unemployment benefits is not a bad idea (which you actually did, yes?).
I'm agnostic when it comes to fiscal stimulus, but if I were going to do it, that's what it would look like.
On “Debt and the ticking clock”
Yes, it was the Labour party who implemented Rogernomics.
"
Oddly enough his prediction did kinda come true for New Zealand in the 1980s, the free market Rogernomics reforms were only possible because of the fiscal crisis. But while I'm glad the reforms happened, the suddenness of them caused some serious economic problems, we basically had a lost decade for growth and we ended up having to cut the government payroll in half in the teeth of a recession. IF we had been able to implement those reforms over 10-15 years instead of 4 years things would have been a lot smoother for us.
On “Breivik’s Cold Logic”
Indeed, better Chamberlain than Mosley.
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