Warning: Political Rant!!

[davidbcoe]

Are they really this stupid?  Is that even possible?  Does Republican Senator John Thune of South Dakota not realize that in rehabilitating ATV and recreational trails in national monuments and parks we are creating necessary work for people who have no jobs?  Does Republican Senator Sam Brownback of Kansas not understand that in renovating

Comments

[carolf]

Good exchange, both of you!

I have two big problems with the Freds of the US right now.

1) Their arguments, well reasoned as they are, all lean to the supply-side of economics. Ever since Reagan, that's been the be-all and end-all of Conservative economics.

Problem is, supply is not our problem. As a country we've been growing our production efficiency at an accelerating rate. Supply, we've got. What we lack is Demand. (Ask anyone who's trying to sell a house, right now.)

That's why, when the demand is lacking, the Mt Rushmore projects work better than the small business project. The small business model does produce some jobs -- but it also gives money to the shareholders. The Reaganomics model assumes the shareholders will invest in more businesses, creating new jobs. However, that takes much, much time and so doesn't help now. More importantly, Reaganomics assumed a closed system. As Friedman says, the world is flat, economically speaking. The jobs created aren't here -- they're in Sri Lanka or Vietnam or China.

2. None of the projects I've seen mentioned are of the Mt. Rushmore model. Some are meant for immediate infrastructure repair (shovel ready), some for intermediate infrastructure (schools, for example) and some for long-term investment into the infrastructure we'll need going down the road (green industries et al.) Small businesses do not repair the roads they use. Small businesses don't have the resources to invest in, say, high-speed trains, and large businesses, beholden to their stockholders, do not.

The reasoned arguments from the Freds have been followed in this country, now, since Reagan. (Clinton didn't have a Congress to do much else.) No matter what happens, Fred keeps saying the same thing.

At some point, I'd like to hear Fred tell me when he thinks we might need a demand stimulus.

In short (too late!) Fred keeps reasonably arguing a solution for a different problem than the one we have.

[davidbcoe]

I agree with you, Carol. (Not surprising, I know.) The point of the stimulus is to prime the pump, get things moving again, put just a little bit more money in people's pockets so that they'll start to spend again. The supply-siders don't get that done.