Keynsians, Hearken!

The above link is to an article that speaks about the effectiveness of the U.S. president's 2009 spending package that by some recent reports has added over two million new jobs (is that net or just a regular number?)  The content of the article examines, in theory pretty much only, the validity of the recent spending package, and there is some ground to be contested for the Keynsians, i.e., Romer, Summers, et. al, insofar as theorists vary on how effective government stimulus spending is at any one time, and this goes back to the Okun period in the 1960's when economic indicators started to become more true to life and "accurate" with respect to economic phenomenon and the information derived thereby using telecommunications and computing power.  Keep in mind that Keynsians do believe economics is full of numbers and you need some sort of quantitative analysis to make economic decisions (Keynes read statistics in the paper pretty much always, or obtained them over the telephone in working his economic and portfolio majic at Cambridge when he was alive.)  The fact is statistics do work, but they can be flawed, such as in the 2008 presidential stimulus package whence there was additional government spending, but investment was going abroad in one way or another, and the spending had little effect - there was a recession anyway.

The article does accurately propose that deficit reduction and cutting taxes, and cutting interest rates, and some other things would do well to get the U.S. economy booming again like a big band.  The problem has been for years that the twin deficits are structural, and this is in time of war so the federal government needs to pay for the conflicts somehow and we are all deeply in debt which means we are taking away from tomorrow (sui generis) when interest rates will be adversely affected by the increase in debt today.  The problem with interest rates and the dollar continue and if the president does what others have done before him, raising taxes, all this will mean is the commensurate spending that will result will only really cancel some of the deleterious economic effects remaining from the 2009 recession.  Policy makers talk about now "cutting" the deficits, and that would be first a positive thing for our consumer economy and then might attract some capital back into the country.  How this is to be done remains a huge question as Keynsians want to project an image the economy is doing better and then capital will follow; the monetarists' quip in this case might be that spending and tax reductions are not the 200% solution, but are better than projecting our economic troubles everywhere through taxing and spending behaviours.  The monetarists are in a bind as they have no real voice in the federal administration right now despite some prospective redemption in thier policy ideas.

Neither tax and spend, nor manipulating monetary economic items is the answer here as both these principles work most adequately under different regimes in relative peace time.  There are wars going on and our country (and its armed forces) is / are the champion(s) of liberty, honour, patriotic and civic duty in those conflicts; things we all believe in as U.S. citizens and citizens to - be.  Warrring parties often have their own ways of resolving payments and items due in the conflicts:  Before modern finance was discovered, moneys to pay for soldiery and armaments came mostly from the countries' treasuries, which is less so in modern times.  States have given to taking out loans from the citizenry to pay for conflicts, especially the current conflicts in the Middle East.  People like me do not believe government policies are the reasons for either our current economic difficulties or their solutions.  Without getting into what one might think of James Earl Carter's "Conspicuous Consumption" speech during the latter part of his presidency means for us today; everyone knows some belt - tightening is in order for everyone within our shores.  You also might do well to try to buy a few treasuries through the local mutual fund broker.  This will in the individual case do virtually, if not absolutely, nothing, but you will thereby be in step with the problems the president has:  a.  Simple people have believed for years that belligerents become wealthy and this is the reason for countries going to war (war is actually extremely expensive in any age, and quickly drains the treasury of any region,) b.  There is an ever - burgeoning debt mound in the federal government due just to deficit operations and spending; c.  The effect of any, even extremely powerful monetary / fiscal policy decision will be marginal / has been marginal at best; d.  Our region currently suffers from now historically very high unemployment on average; e.  The twin deficits must be reduced - something past administrations have demonstrated as "possible" but not probable; f.  To the extent deficits are cut, there are more poor tradeoffs between taxes and interest rates, for example, and other factors; g.  Any efforts at federal austerity will principally choke the national and regional economies that are used to federal funding; h. and on and on...  There is an entire body of work that goes into every economic policy decision, and the president, whoever he is, makes very few mistakes despite finger - pointing and partisanship, etc., especially with people like Paul Volcker in his corner.  The unfortunate thing here is that the Volcker people themselves, whatever their views are, have never been the purveyors of good tidings, really, and fall more or less within the Keynsian framework that calls for a kind of modern liberalistic approach to things. 

Nonetheless, pay attention to what the economic bills the president is signing, and they could pull off some austerity measure while raising taxes, or something.  Maybe a new labour bill could do it, though the business climate in the States now is as if we have had a labour regime for twenty years and the 1990's and early 00's have been cancelled out.  My solution would be to do what has been done in countries like Japan - hold down interest rates and muddle through, and call elections when things really do not work out.  All this, though we do not want our model to be Japan (and it isn't at this point,) do we, as that region has been long suffering economically for years.  People like me do believe in austerity measures and at the same time, and despite the increased expense of the wars, do not believe in rationing or quotas.  The idea is to stay away from that type of business climate where everyone is trying to get their hands on gold, silk, booze and chocolate, for example.

Some comments are that "It Could Be Worse." - 2009 New York Times Magazine

Also - Click President Signing Unemployement Act - 2010 as well for more ...

The above link is a 2009 interview site where the U.S. president sat down with a magazine editor and went over some items not only affecting our country, but other administrations as well that look to the O'Bama administration as an example, especially those in the western hemisphere.  This is the first I had heard that the president's mom had a cancer attack, then she apparently had stroke and upon that fell and broke her hip.  This would be a sorrowful thing for anyone, and this happened during the presidential campaign which must have been doubly disconcerting for the to - be president - elect and it shows his leadership skills to be able to speak about this openly, and to talk about it within the overall framework of medical care in the U.S.

It seems to me that with respect to this article that someone make a determination as I have that public finance began the financial crisis and (through Fannie and Freddie, and maybe even other entities of the same nature) with their collapse led to further problems that eventually touched upon the private sector and snowballed further.  The president in his interview appears not to know this and despite the conversation, the interviewer appears lost on it as well, even despite some discussion of the now passing financial rules in Congress and the Volcker - influenced regulations relating to macroeconomic financial safety and soundness.  Here also seems to be some cloudiness on the subject of the role of the U.S. Treasury now that the scandals have been remedied and how the moneys that funded the failures are to be repaid.  There is, however, some discussion of the technology and other crucial sectors driving paper profits and these parts of commerce, at least in the future, according to the interview, will not have the same primary role as revenue and income drivers in the economy as they did before. 

The interview includes a discussion of the president's overall views on the economy and his perceptions about workers and their choices and goals, for example, of the workforce toward greater vocational fulfilment, greater employment, and better lives for workers.  There is a surprising omission of any discussion of the basic relationships between the means of production and labor in the talk illustrated in this article, and in fact it appears that the president has decided, maybe accurately, the economy of the U.S. must at this point, and for very healthy reasons, become at least in part a labor economy among others.  By this he must believe in anti - inflationary measures and the general provisions of labor economics with the all encompassing statistics they have and so forth.  There was a significant discussion on the subject of health care and this article notes that ninety percent of health care costs are attributed to chronically ill patients in clinics and hospitals - and with this in mind, what one can do with health care costs - with the emphasis on the cost structure of delivering health care when the fixed costs are so high.  One back - of - the - envelope solution has been to "socialize" health care, but given the structure of insurance and other vehicles that cover health care in the U.S. and they way they have been for years, it does appear, for further discussion yet, that health care is already socialized.  This lawyer - president appears to want to depend upon quantitative methods for his executive powers and their implementation, and it is in any event very interesting to have read through this year - old magazine piece from May 2009 to find many of the same issues as looked -at still up - to - date.

Egypt, again taking another administrative turn.

Hosni Mubarak and Anwar Sadat

FROM THE WALL STREET JOURNAL:  This editorial by Fouad Ajami (The Foreigner's Gift, 2007) clearly and distinctly explains the place of Egypt in the modern world and its veteran leadership as they enter the arena of political maturity and face the dangers of anarchy in the 'near abroad' - the world of islamic influence, and the 'far abroad' - the western world as led by the United States.  Mr. Ajami writes here in appropriately incriminating prose on the subject of Ayman al - Zawahiri of Al - Q'aeda who was an Egyptian terrorist and then was involved in the assassination of Anwar Sadat during a 1981 parade ceremony.  Under Sadat, Israel had completed talks with Egypt to allow international recognition of Israel.  To see how important this was, take a look at the Hamas charter.  Zawahiri had other colleagues who were involved in the 1993 New York World Trade Center terrorist blast including another Egyptian, Omar Rahman.

It is noticeable by the editorial that the Egyptian regime is the origin of at least some violence on our Homeland and in conspiratorial ways.  On the other hand, Hosni Mubarak, the current Egyptian head of state, has effectively done away at home with the types of terrorist shenanigans that dominate the headlines in other international regions.  This bitter truth, that many arab terrorists come from different backgrounds in western - friendly countries such as Egypt is something in need of a remedy that will last like the current regime has.

Terezin

From "Radio Free Europe:"  'A recent Prague Spring concert honored musicians and artists in the Terezin concentration camp who died in the Holocaust. Terezin Music Foundation founder Mark Ludwig pays special homage to composer Gideon Klein, who died aged 26...'  It is captivating to try to find out or in some way have an image of what went on in the work camps of WWII Central Europe.  Terezin itself was apparently a type of dressed - up or hotel version of said camps and was visited and approved of by officials from Geneva several times during the German occupation of Czechoslovakia.  Any material you find on it is worth reading as the Terezin camp was run in fashion always to be ready with a new coat of paint here and there and even new bunks for the Hebrew and other inmates upon the impending visitation of Geneva and other officials to confirm that there were no exterminations there.  It was a small and well - run prison camp where a higher percentage of the Holocaust inmates survived.

July 14 - An anniversary of sorts - Ten Days Ago...

... Have read and heard about the news of the latest celebration of French "independence" from the feudal or royal age, and have heard of the grand parades and so forth: "A bas Louis XVI," etc., but you and I both know that cake was possible in that time as the harvests of that time were good, and there were some bad ones, too; but the granaries were full in most places. The crown of France had spent its capital and other funds on the grandeur of the Regency two or three generations before and the state could no longer support itself. In the history of ideas, Robespierre and Danton nor are nor were at the time propitious ideologues, even given the critiques of modern day iconoclasts, though they did have great influence and this probably due to moneyed revolutionary interests emanating from abroad. The royals were mostly informed of the impending revolts, and this has been a subject in the literature for a long time, as they even in many cases welcomed and profited from the revolutionary ideas and regarded them as refreshing because they were taxed so heavily by the state. Some of the details are apocryphal and therefore must be treated 'avec un grain de sel,' and the actions of many revolutionaries in the Tuileries against the king's guards were horrendous and extremely cruel (they had an army and the guards could not surrender under orders, and so forth.) The celebrants of the 14 July festival are therefore again taken to be rapacious and jaded against what was a benevolent monarchy under which there were many freedoms for the time, just not financial freedoms which infuriated everyone in the end and the city of Paris became a powder keg for insurrection against bloodlines first, and then the crown.