I fight with a known prejudice I have concerning this whole economic thing.
But I know I’m not the only one who does this. Factcheck.org points out an important fact:
Why all the uncertainty among first-rate economists? Well, for one thing, economists have very little data with which to work. There are plenty of theoretical models out there, but those models are largely untested. See, economics is a relatively new discipline, with much of its most important work having been done just within the last 50 years. Fortunately for most of us, the world hasn’t seen many serious, worldwide economic crises during that time. Unfortunately for us, our long period of relative prosperity means that economists haven’t been able to plug a lot of real-world situations into their models to see how well those models hold up. Indeed, there are basically just two modern depressions: the Great Depression and the so-called “lost decade” in Japan during the 1990s.
So, no one holds the absolute truth in these matters.
Therefore this becomes a “hard problem” (a problem that has no clear solution. An “easy problem” is one where we know the solution no matter how difficult that may be.)
Since the answer is so unclear how else do I decide how to lean? Prejudice, I guess.
I feel like I’m a centrist liberal. I am fairly conservative in money… but there are some wrongs in the world that shouldn’t be allowed to continue… children with no health care, working families going bankrupt because of medical bills. I just don’t like to see people (Americans especially) suffer through little to no fault of their own. I also am pretty extreme when it comes to foreign oil and adhere pretty closely to the Pickens Plan. While I believe the environment is in trouble, it’s not as important an issue for me as the two mentioned.
I have been thrown into a bit of a tail spin since Greenspan said basically that his assumptions about how the world economy worked are pretty much all wrong.
Greenspan, 82, acknowledged under questioning that he had made a “mistake” in believing that banks, operating in their own self-interest, would do what was necessary to protect their shareholders and institutions. Greenspan called that “a flaw in the model … that defines how the world works.”
I was heavily leaning towards a Greenspan Libertarianism until all of “this” happened.
Additionally, in that article he points out that he did not see this housing crisis to unfold as significantly as it did. I can’t tell you how many people I talk to today that say they saw the housing crisis (of it’s current proportions) was something they saw a mile away. Not only are these people world-class Monday morning quarterbacks, they have deceived themselves into believing they were extraordinary soothsayers.
So, I guess I just take all that information and, based on my preferences for social order, adhere to the strategy that seems to make sense from there.
Tax cuts don’t seem to help anyone, nor do they show any signs of working in the previous administration. But ultimately because nothing works in a vacuum, I can’t declare this with complete clarity and confidence.
And then there is the fact that I just gravitate so easily to the mind of Paul Krugman. He is the most recent Nobel Laureate for economics.
At this point I’m not convinced that anything will work as some sort of be all end all answer. The secret will be to turn America’s phsychological perspective. The mass pessimism is the destroyer here. The key will be to do something big that shocks all Americans out of this slump.
Shock and awe. That’s what I think is most important here.
Build a ton of bridges. Fix our roads. Get Amtrak a new corridor. Weaterize a bunch of houses. Just get us moving in a big way.