Thursday, August 30, 2012
Why an economy?
This morning I wrote a quick comment at Yves Smith's site that turned out to be a nice terse summation.
I've been making these points every day since 2006, but I don't think I've ever tied them up so neatly in one package.
Copying here with added context:
We shouldn't be asking whether we need more spending or less tax. We shouldn't be looking at GDP as the goal. We have to start by asking "Why do we have an economy?"
The answer is NOT "to increase a number." The correct answer is that we have an economy to improve the lot of humans. More specifically, we have an economy to provide decent jobs that ordinary people can do, and to provide decent stuff that ordinary people can buy.
America had an economy like that once. Roughly from 1945 to 1980.
Let's look at variables and constants.
At various times in those years we had high spending and low spending, high taxes and low taxes. So we know that spending and taxes are NOT the relevant forcing factors.
What did we have constantly during those years that we don't have now? Most importantly we had strong restrictions on financiers and banks. Second, we kept a firm hand on corporations. Third, we kept a firm hand on foreign trade. All trade treaties were strictly bilateral, none of this WTO/NAFTA shit. We weren't afraid to charge tariffs. ¶ 4:57 PM
I've been making these points every day since 2006, but I don't think I've ever tied them up so neatly in one package.
Copying here with added context:
We shouldn't be asking whether we need more spending or less tax. We shouldn't be looking at GDP as the goal. We have to start by asking "Why do we have an economy?"
The answer is NOT "to increase a number." The correct answer is that we have an economy to improve the lot of humans. More specifically, we have an economy to provide decent jobs that ordinary people can do, and to provide decent stuff that ordinary people can buy.
America had an economy like that once. Roughly from 1945 to 1980.
Let's look at variables and constants.
At various times in those years we had high spending and low spending, high taxes and low taxes. So we know that spending and taxes are NOT the relevant forcing factors.
What did we have constantly during those years that we don't have now? Most importantly we had strong restrictions on financiers and banks. Second, we kept a firm hand on corporations. Third, we kept a firm hand on foreign trade. All trade treaties were strictly bilateral, none of this WTO/NAFTA shit. We weren't afraid to charge tariffs. ¶ 4:57 PM
