Government Legacy

Tyler Cowen shows the stupidity of Government program expansion. Menzie Chinn has a good article on the spread of Crisis from financial markets to the World Economy. Two seeming unjointed Posts connected by only one element–Government interference. Still cannot see the Connection? Alan Greenspan lowered the target funds rates to 0% to gain a more rapid Recovery after the last Recession, which produced a less-than-normal Recovery; not exactly a 3:1 Benefit-Cost ratio. It also had another detrimental effect: There would be no Talk of reducing the funds rates again in this financial crisis, except for Greenspan’s previous interference in the market structure. It is especially bad because the Greenspan interference was the element which excited the growth of the subprime Mortgage market in the first place.

Chris Dillow points out that current Union activity serves only to hide the nature of the true Rent-Seekers in the economy. Labor Income has remained relatively static, even in the unionized market, but Management Income has soared. Some might postulate that Management did not actively seek that Income increase, there are Fools everywhere. A tie of this paragraph to its predecessor would state that the less-the-normal Recovery does not promote the ascribed increase in value of Innovation. The Result of the current Crisis might truly focus on the fallacies of current Business and Economics theories.

I personally like Robert Reich and Mark Thoma along with their Work, but have some difficulty with the direction of their theory. They, like almost all current Economists, have never questioned the basic foundation of the American economy. I hold that the Economy is overheated, with over-rapid growth of Debt, fueling an over-Consumption both unnecessary and unpaid. Economists may be paid to ignore Reality, but I am not, so I can state that the pace of Capitalization need be slowed until a greater share of Investment has been paid. A restriction of Consumption can only reduce the purchase of Exports by Americans, slowing the Trade imbalance. The Jobs lost in the Process will be exactly those Jobs which should be eliminated; most especially as their labor created Most of the economic imbalance observable in the economy today. The humor behind this entire Scene comes from a real doubt that this restructuring will even result in Recession. lgl