Budget talks: This is getting nasty

Yeah, instead we'll get a White House version of Scott Walker backed by the FBI, CIA and the military.

Prepare for arm tattoos.

 

That defines you, in economic terms, as a Keynesian (you are touting the theories of the economist John Maynard Keynes). I think Ragu would be a "market liberal" or perhaps a follower of the "Chicago School."

Maybe one should avoid using the phrase "market liberal," as it might be confusing with the conventional definition of "liberal."

 

Infrastructure jobs, in theory, help create permanent private sector jobs. The example is a freeway interchange. Let's say a publics work project builds a new exchange in an area that needs one. That new exchange will create a new enterprise zone which, in theory, should increase commerce in that area. That's a simple example of temporary jobs leading to more permanent jobs.

 

We need to have more balanced trade with foreign countries. Fair Trade, not Free Trade.

I know, that means that dirty word of tariffs. But make it more costly for businesses to ship jobs overseas, they'll bring them back here. And yes, prices for overseas stuff will rise. But will it rise in proportion to demand? Or would consumers keep an eye on their pocketbooks?

Look at North Dakota right now with their oil boom. They are begging people to come there because there aren't enough workers. McDonalds is paying their people $15 an hour, and I'm sure, their prices have risen accordingly to the $7 Big Mac, or whatever it is. Yet, people are still buying McDonalds, and I would think, they'e still making money.

Why? Because there's an awful lot of people working, and they have money in their pockets thanks to the competition for labor. Unemployment is something like 3 percent in that state. Businesses are making money. Landlords are raising rents, and making money.

Consumers have to have money in their pockets to spend. For the past 30 years, they haven't, but they've had credit cards to rely on. Now the banks have tightened credit, and consumers are wondering why they're paying 25 percent on their cards for no reason. So now, they can't, or won't even use the cards.

So, that means money has to be put in consumers' pockets. Either the government does so, or the private sector does it. The first option is not very popular right now. Which leaves the second option. Only, they're making considerable profits, and not trickling it down to their workers. Instead, workers are barely holding onto their jobs and dealing with pay freezes, cuts and everything else while the CEO and his minions make a shitload.

Capitalism works best when it's somewhat of a partnership (like the NFL), rather than a winner-take-all system. If money-making businesses provide jobs and good pay for workers, those workers will spend more money, which which helps businesses. If they don't, then workers don't have money to spend. If they're not spending, they're not buying what the businesses have. And then the businesses collapse.

 

It's a vicious cycle. The less money consumers spend, the less demand there is, therefore the less money businesses make, and the less they spend on hiring, innovation, etc.

Someone has to take the risk necessary to break that cycle. But who will it be?

 

Obama ran his campaign for the 38%. He has run his Presidency for the center.

His experts must have figured that the 38 % are like the family dog. Regardless of how you treat them they will keep coming back.

For most of his Presidency he has done the direct opposite of his campaign promises.

He has my vote in 2012.

 

The big thing I learned in the debt ceiling talks is that at some point I would very much like to play poker against Obama, if this is how he backs the statement "don't call my bluff." I guess he should have said "pretty please don't call my bluff and make me turn over my pair of 4s."

 

The thing about Obama getting played? I think he realized the Tea Party folks really would crash the economy, you already see the willingness to blow off more than $1 billion over a $16.5 million FAA deal. I haven't heard any Tea Party member say they were "just kidding" and bragging how they got over on the President.
The economy is in sick enough shape without having to deal with debt default. And he's taken the "anti-debt" card out of play for the 2012 campaign.

 

Back to the question: What, if anything, should be done to improve the economy?

So far I've seen one answer: Stimulus, focused on infrastructure jobs.

 

Why can't we come up with some kind of incentives for newly turned seniors to hold off applying for SS? I assume the rationale for many is, "I'm going to get whatever I can as soon as I can."

 

There already is an incentive -- you get more each year you wait between 62 and 70.