Depression Economics

9 responses so far

• 1 Rel // Mar 12, 2009 at 9:54 am

  David, I read Romer’s piece but saw it differently. Much of the right wing blogosphere is spluttering that the Administration’s borrow-and-spend policy creates an inflationary pressure. If Romer is right that inflationary monetary policy is the way to go, then perhaps that’s the unspoken goal?

• 2 JJWFromME // Mar 12, 2009 at 10:34 am

  From the piece: “More ominously, thats likely the date at which the administrations cap-and-trade plan will go into effect, sharply increasing energy costs.” I think you on the right are baffled about our energy *problems.* I don’t think you’ve fully come to terms with them. You’re too stuck in your Cold War “New Class” -demonizing mindset, just like Tanenhaus said. Read this post and the accompanying interview:
  http://scienceblogs.com/intersection/2009/03/kolbert_on_global_warming_and.php
  If cap and trade isn’t the answer, then what is? You guys need to get reality-based on this. You have enough think tanks to populate a small army. These places need to stop churning out propaganda and start finding solutions.

• 3 barker13 // Mar 12, 2009 at 11:13 am

  Rel – That’s correct… the Bush/Obama monetary policies and spending policies will lead to stagflation no later than spring 2010. Everything Bush did wrong… (*SIGH*)… Obama is doubling down upon. JJWFfromMe – Have you ever wondered how the Grand Canyon got to be so… er… Grand? (*CHUCKLE*) Anyway, connecting your comment to the issue of “stimulus” policy, if we’re destroy our currency and thus ultimately our standard of living via unsustainable debt, lets at least build some (say start with 30 with the goal being 100 within 15 years) more nuclear plants and also double (at the least!) our oil refining capacity. Cheap (relatively speaking) energy is the key to our lifestyle – and I like my lifestyle! BILL

• 4 JJWFromME // Mar 12, 2009 at 12:13 pm

  “Have you ever wondered how the Grand Canyon got to be so… er… Grand?” Actually, I’ve spent years wondering how Republicans got so fantasy-based. And I’ve got some pretty good ideas about that too. Don’t I, David?

• 5 A.B. // Mar 12, 2009 at 12:24 pm

  (DF)”Despite the chaos, loss of faith and lost wealth, the Great Depression, she said, ‘did eventually end.’” Yes, with global war, then Bretton Woods, the “real” end. Her “point five” needs to be “point one,” no?

• 6 JJWFromME // Mar 12, 2009 at 1:06 pm

  Well, has the science “gotten crisp”?
  http://www.guardian.co.uk/Archive/Article/0,4273,4171063,00.html

• 7 sinz54 // Mar 12, 2009 at 5:23 pm

  JJWfromME: I draw on Milton Friedman’s thinking. The simplest and most elegant solution to global warming is a carbon tax. Just start the tax off at a low percentage, and gradually increase it, giving everyone time to adjust. The reason why politicians prefer cap-and-trade is because it’s a HIDDEN tax; it buries the actual cost inside rising prices of fuel, goods, and services. But hiding it that way distorts price signals. With a carbon tax, the added cost of the tax is visible on the sticker of everything you buy. Then it becomes easy to see how much more your gasoline purchases are costing you to clean up the atmosphere, how much more your electricity is costing you, etc. And the free market can follow the price signals, adjusting for maximum efficiency.

• 8 sinz54 // Mar 12, 2009 at 5:29 pm

  JJWfromME and barker13: One thing that both sensible liberals and sensible conservatives can agree on, is that nuclear power must be part of any energy mix that reduces global warming. Here in New England where I live, the skies really are cloudy all day (so much for solar power); and with the population density, there isn’t room for acres of windmills either. Besides, wind is fickle; the hottest days of the year often feature calm winds, reducing wind power just when you need it most. There’s not a chance inl that a large percentage of U.S. electricity can be generated by wind and solar at any time before 2050.

• 9 danbmil99 // Mar 12, 2009 at 10:41 pm

  “If Romer is right that inflationary monetary policy is the way to go, then perhaps that’s the unspoken goal?” I suspect it’s the only solution. If house prices continue to fall, the credit default swap problem will truly tank all the major financial institutions. How can we avoid further price drops and effectively reduce the principal people owe as a percentage of income? One word: Inflation.

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