Back in the Saddle

I really have some difficulty with the Krugman postulate. His model does not truly express any success except in the Short Run, and fairly fails in the Intermediate. I dislike a model which works only until the funds are exhausted, and then must be reloaded. There is no spring connected to that board. The banks did not go back to Lending, Business did not ramp up with no Consumer Demand in sight, and foreign trade did not better until the U.S. ramped up on Imports. China is also attempting the Krugman formula, and can’t seem to get the engine to restart. More of the same does not appear to be any form of rational policy.

I favor letting the Bush Tax Cuts run out for All. Make everyone work a little harder to bring the style of life which they prefer. The greatest element of this will entail Business altering their basic operational format. I am wary of a time where all major industries can continue to accumulate Profits while Production is in decline; there is simply too much liquidity in the mix. Investors would proclaim this is a prime policy because of immediate Profits, but there is not long-term capitalization and recapitalization. Labor will never present the long-range Consumption necessary for sustained Production if these conditions are maintained. The situation is not to Anyone’s benefit.

I am out of surgery with a good report, but it will be reflective of current conditions. It will cost more than the first go-round, and the actual Cost will have gone down; yet no one will witness a reduced Price for such work. It is useless to blame the Hospital or Doctor, and all Staff for well-trained and efficient. My recovery will probably be maximized. What We will find is that Insurance Costs will have gone up, and supportive services will have been minimized. The Question to be asked is How Much can the Services be pared, before the quality of Product drops. It will be an increasing issue of dispute in the coming decade. lgl