Tuesday, January 26, 2010

The New--Old Order

Paul Krugman brings Us excellent comment here, but still fails to express the fundamental failure of the entire Government structure in dealing with the current Crisis. He does not detail the fundamental weakness with current Government policies, which is that We have devolved from the curative policies of previous regimes which had worked in the Past. It remains quite true that economic conditions have changed in the interim, with both Product and Employment levels changing in both number and context, but previous Government policies did succeed when faced with economic failure, and could still work if given a chance. It might not matter whether One thinks the second Reagan Tax revision or the 1993 Clinton Tax revision worked best; both seemed to work better than Our present mess. It actually also does not matter where the economic stimulus utilized was placed. What is important was the fact that both those programs worked to the degree that they did work, and that current policies are failing. There is an old adage in Business that if Innovation fails, you return to what worked in the Past. I think it is time We returned to the Days of Yore, and descend to a previous position on Tax and economic policy, before Employment returns to those previous positions.

Bruce Bartlett stands as someone who would obviously oppose the above ideology; at one point stating it likely that Roosevelt should have abandoned fiscal conservatism, and spent 5 times the amount of stimulus in the 1930s. Bruce makes the mistake of using the position of the GDP from the previous Boom before the 1929 Crash, instead of the level prior to the Boom–say 1927. He also does not understand the difference between Stock Market performance and real capital investment–positions which can deviate quite substantially through short periods. I agree with him that there is slight chance of fiscal tightening over the near future, but do not see this performance as beneficial to Anyone. The ideation of a running Mortgage on the federal government is a Concept which will come back to bite Us.

I will finish this Post with this article, which explains a great deal of the mess We are in. We literally cannot have a sound Tax base without a manufacturing sector; I will not explain the technical aspects of Inflation here, but state that Tax increases without manufacturing output increases are inflationary, and declines of output will make even current Tax rates inflationary. It is not necessary to detail who gains from manufacturing declines, and remains counter-productive in organizing Opposition. The need stands as the necessity to identify the real Costs from failure to regenerate manufacturing in this Country. It costs Us a savage price to purchase abroad, and understanding that Price will improve our organization. We can produce better Product at lower Cost with better Wages, if only We separate from the debris of the Past. I may later make a Statement on methods to accomplish this State, though it will obviously entail some research on my Part. lgl

No comments: