There IS a difference, of course.
...as America struggles to emerge from a financial crisis, any renewal of the right will require Republicans to rethink their approach to the economy. An agenda focused chiefly on tax cuts, as the Republicans' has been since Ronald Reagan's presidency, is no longer enough.
Agreed. It's the SPENDING, Stupid!!....but that's not the topic of the article.
...Reagan's platform lost its appeal because the Republican Party frequently betrayed it. The size of government increased by 33% during W's first term, the largest increase in federal spending since Lyndon Johnson. Bush's last Treasury secretary, Hank Paulson, orchestrated the most massive state intervention in a Western economy since Francois Mitterrand's nationalization of French banks.
Did we mention the SPENDING, Stupid??
The Republican Party has to move from a pro-business strategy that defends the interests of existing companies to a pro- market strategy that fosters open competition and freedom of entry.
Read the rest. Seriously. It's not long, but it's well-thought out.
HT: AmSpec
Zingales: Yet another U. of Chicago, neoclassical economist whose "Rational Market Hypothesis" fantasy led us to where we stand today.
ReplyDeleteI love this gem:
"Though American GDP has doubled in real terms the past 25 years, median real income has grown by only 17%. While the richest 1% of the population has tripled its real income, with the richest 0.01% finding its real income quintupled, the bottom 10% has increased its income by only 12%."
Yet he trumpets the victory of Reaganomics and de-regulated, free market capitalism at the same time?
Where does Mr. Zingales think that doubling of GDP growth came from? Could it be from the very same creative financial instruments born out of the same time period? The very same financial instruments that were created in order to "minimize" risk for the bankers who believed in RMH?
Furthermore, exactly where does Zingales think the roots of this income inequality began? Does he not find it ironic that the income inequality he speaks of seemed to begin at almost the exact time that top level income taxes were slashed to levels not seen prior to the 1930's?
Dadster, the neoclassical economists are dead, dead, dead. They had their moment (the 70's). Tinkle down economics failed on a grand level that we are only beginning to experience. Look around you. It's not just the SPENDING....it's the TAXES (or lack thereof) and, most importantly, all out faith in the free market which led to financial DEREGULATION and the mess we'll be dealing with for years if not decades.
Capitalism is most effective when effectively regulated. Let the past year be a prime example of this point.
Funny.....I did not find "anti-regulation" in his article. In fact, I think the thesis, taken to a logical conclusion, demands more regulation of "BIG" biz--or at the very least, less acquiescence to rent-seeking.
ReplyDeleteBy the way, Greenspan's pumping of the dollars created the bubble. That began back in 1987, after the DowDrop (around 500 points) and only increased, substantially, after the Leveraged failure.
IOW, I'm not so sure that it was "wealth" that was created--only paper wealth.
Ask anyone who had "wealth" in their Las Vegas home.