Political Change: In Context

@BrightNoon,

BrightNoon wrote:

This is about nomenclature. When I say the people 'do not understand why' they hate the system, I mean they do not understand why there are certain economic and political conditions that they dislike, such as rising unemployment, inflation, lobbying, etc.

That's fine, and you're probably right that most people do not, for the most part, understand why the various economic and political problems exist. But they do understand why they dislike the current administration, even if they cannot explain how certain conditions became manifest.

BrightNoon wrote:

Feel free to attack my position on the system, but don't assume to know what the people do or do not like. You know now better than I. I admittedly base mine on assumption.

I don't assume, I check opinion polls. If opinion polls overwhelming indicate that people do not like the current administration because, for example, people think the current administration botched the Iraq war, well, that's why the people do not like the current administration.

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@Khethil,

Bush himself probably does not subscribe to a particular economic theory. However, many key people in his present and past administration are NOT followers of Keynesian economics, but of the economic theories of Milton Friedman. Friedman's economics can be traced back to Nixon's white house. It is essentially the basis of Reaganomics. The country has moved further away from Keynesian economics for many decades.

Ironically, those who have power and follow Friedman's Chicago School of economics, support Keynesian policies when it applies to their own interests, like corporate bailouts, for example. It's kind of a perverse mix of economics that does not work for average people.

In my opinion, Friedman's theories are essentially "survival of the economically fittest," which of course, appeals to powerful corporations. It would follow that the "fittest" would do whatever it takes (even surgically apply Keynesian policies) to "survive." Which brings up the question "is this economic anarchy really an economic theory at all?"

1 Reply

@chad3006,

chad3006;35726 wrote:

Bush himself probably does not subscribe to a particular economic theory. However, many key people in his present and past administration are NOT followers of Keynesian economics, but of the economic theories of Milton Friedman. Friedman's economics can be traced back to Nixon's white house. It is essentially the basis of Reaganomics. The country has moved further away from Keynesian economics for many decades.

Ironically, those who have power and follow Friedman's Chicago School of economics, support Keynesian policies when it applies to their own interests, like corporate bailouts, for example. It's kind of a perverse mix of economics that does not work for average people.

In my opinion, Friedman's theories are essentially "survival of the economically fittest," which of course, appeals to powerful corporations. It would follow that the "fittest" would do whatever it takes (even surgically apply Keynesian policies) to "survive." Which brings up the question "is this economic anarchy really an economic theory at all?"

This is really just incorrect. Bush, Reagan, and Nixon all had little to do with adopting Friedman's policies. They invoked the name of Milton Friedman and the "chicago school" to sell their economic policies, but they did anything but (as Friedman later said of his time advising Reagan).

I can guarantee you Friedman would have been against any type of bailout. Some of the "chicago school" disciples of his (who are really more for big corporate power than for a true free market) probably would be. Their philosophies differ quite a bit.

Friedman's policies would not help corporations like Reagan's and Bush's. Friedman wanted to kill the capital gains tax (which is basically like a corporate subsidy), end special corporate tax breaks, and institute a progressive negative flat tax program.

The "free" market is not an unregulated market. It is one that theoretically allows for "free" competition, unhindered by excessive government control, as well as excessive corporate control. What we have now is a corporate-run market, subsidized by the gov't.

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@Khethil,

Perhaps I should have said the influence of Friedman's economics has been around since the Nixon white house. Nixon certainly didn't mind using taxpayer dollars to assist Friedman's Chile experiment.

Yes, Friedman would have been against the corporate bailout, but free markets as Friedman imagined them are impossible to implement when you have powerful entities free to cherry-pick economic systems. The fox eventually winds up in charge of the hen house.

So, I'll spell out the whole point to my post: blaming Keynesian economics for the whole mess is short-sited.

1 Reply

@chad3006,

chad3006;35899 wrote:

Perhaps I should have said the influence of Friedman's economics has been around since the Nixon white house. Nixon certainly didn't mind using taxpayer dollars to assist Friedman's Chile experiment.

Yea...but most of the "chicago school" after Friedman, Reaganomics, and Bush's economic plan really have nothing to do with following Friedman's outline for the economy. Most of these policies were a corruption of what he advocated, to aid big business and make it look economically legitimate.

Quote:

Yes, Friedman would have been against the corporate bailout, but free markets as Friedman imagined them are impossible to implement when you have powerful entities free to cherry-pick economic systems. The fox eventually winds up in charge of the hen house.

I'd agree this is right, given our political system. Friedman's colleague at Chicago, Stigler, was well-known for his "capture theory", and Friedman did acknowledge this danger (it seems complete capture has occurred at this point). He did campaign for some policy changes that really would have brought about change, i.e. a constitutional amendment to abolish the federal reserve as we know it today.

Quote:

So, I'll spell out the whole point to my post: blaming Keynesian economics for the whole mess is short-sited.

Yea, there are many causes we could find for the current mess that might equally be worthy of blame. Aside from looking at actual policies that helped cause the problem, I think many of us would agree that it has to do with our society's current practice of thinking we should all live beyond our means; greed for money and material items is OK when we can just charge it all to credit and create money out of thin air, thinking things will always improve to where we can pay off our debts. When society tells us it's better to go into massive debt for our material desires and buck all common sense in the process (look at govt. spending and the national debt; a great example for the average american and his finances), then we will run into problems.

1 Reply

@Pangloss,

This isnt entirely relevant, but I thought it was very interesting: an excerpt from Alan Greenspan's 1966 essay Gold and Economic Freedom.

"Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale."

This analysis shouldn't be unfamiliar, but does anyone find it odd that these were the opinions of Alan Greenspan, the man who presided over the greatest monetary expansion in American history? I can only wonder if he had a change or heart, was corrupted, or has been working hard to 'starve the beast,' as they say.

1 Reply

@BrightNoon,

He's a Randroid who focuses on his own self interests, which primarily involve a pay check. He's not so much corrupted as he is pathetic and pitiable. Greenspan, that is.

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@Khethil,

We should be reminded of the 2000-year old judgment of Cato/Sallust on the power of Rome...read his words, and apply them to our current situation:

Quote:

"Do not imagine that it was by force of arms that our ancestors made a great nation out of a small community. If that were true, we should today have a far more glorious nation. In allies, in our own citizens, in armaments, in horses, we have greater resources than they enjoyed. But it was other causes that made them great, causes that with us have ceased to exist: energy in our own land, a rule of justice outside our borders; in forming policy, a mind that is free because [it is] not at the mercy of criminal passions. Instead of these we have self-indulgence and greed, public poverty and private opulence. We praise riches: we pursue a course of sloth. No distinction is made between good men and bad: the intrigues of ambition win the prizes due to merit. No wonder, when each of you thinks only of his own private interest; when at home you are slaves to your appetites, and to money and influence in your public life. The consequence is that an attack is being launched on a republic left without defences."

1 Reply

@Pangloss,

It all seems very tragic considering the knowledge that our founders had of the Roman republic. Methinks the imitation will be more exacting than they would have liked. :nonooo:

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Political Change: In Context

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