The Direction of the Winds

John Kay writes a short history essay of the Economic profession. His Thoughts on Keynes and Schumpeter are cogent, but attributes their degree of success to the aptitude of their Personalties. This is realistically unfair, Schumpeter coming from a failed society and economy, while Keynes was forever close to the action of a vibrant center of the World economy. Schumpeter and I would agree that the dynamic of Capitalism has been destroyed by Corporate procedure and archaic Patent law. Kay does a really good job of resurrecting John Kenneth Galbraith, mentioning the fact that most Conditions which he criticized are still with Us, and still impacting the successful functioning of the economy. His later treatment of Milton Friedman lacks some sincerity, conscious that the Friedman Devotees share the Neoconservative attitude towards criticism of Ronald Reagan. I will not actively cirticize Anyone, but will say that Paul Samuelson had a real impact on Economics, while the Rest will have prestige through the lifetimes of their Students, and possibly through their Student’s Students lifetimes; after which discrepancies will lead to the short Sermon of ‘Rest in Peace’.

This NYTimes article by James Broder contains a frank Warning to all Parties, the Bush administration will attempt to block effective Change in future administrations by massive writing of regulations governing all elements of Government. This would not be so bad except it will undoubtedly serve only Corporate interests; later protected by massive Lobbyist effort. Many of the Bush initiatives will actually aid both Economy and Environment, as the structural problems of doing business remain too involved and Time-consuming, but simple blockage removal for advancement of Corporate Profits can promote economic as well as environmental damage. A sensible Congress would create a Standing Committee to review all new Government regulations, by law establishing that new Regulations must be Read Out and passed by the new Committee; possibly even examining old Regulations for lack of validity.

Tyler Cowen gives Us an excellent column in the NYTimes, which contains far more truth than Most would enjoy. I will say now that I agree with Tyler in about every particular, but will state I believe the Fed has gone about as far as desirable in maintaining liquidity. A dip into Reality states that necessary funds are available at the Present, financial institutions simply dislike to borrow at the current rates because it affects their own personal Profits structure. This is not a rationale for the Fed lowering its funds rates. Loss of Book value Profits–consider the buildup of Profits since 2002–would essentially generate a huge deflationary effect on the Economy; which currently expresses little indication of recessionary factors. Actual fact states We could benefit from a Clearing Operation, removing unearned Profits. lgl