Income Inequality and Economic Consensus

income-inequalityIn a forthcoming book, John Quiggin makes the case that the economics profession has embraced market economics almost to the exclusion of competing ideas in recent decades, with unhappy effects on public policy.

Throughout the crisis, the economics profession carried on, for the most part, as if nothing had changed. And now that the immediate crisis has passed, market liberals are trying to pretend that it never happened. As Richard Posner, a rare example of a market liberal who has changed his views and embraced Keynesianism observed in a recent interview ‘market correctives work very slowly in dealing with academic markets. Professors have tenure. They have lots of graduate students in the pipeline who need to get their Ph.D.s. They have techniques that they know and are comfortable with. It takes a great deal to drive them out of their accustomed way of doing business.’

An approach to economics that has been dominant for more than three decades will not go away simply because its predictions are inconsistent with the facts. It is necessary to provide an alternative to the zombie economics of market liberalism.

[…]

The prevailing emphasis on logical rigor has given economics an internal consistency that is missing in other social science. But there is little value in being consistently wrong. Economics must move on from the infinitely rational, farsighted and asocial beings whose decisions have been the central topic of analysis in recent decades.

Matt Yglesias concurs and adds,

It’s striking to consider the extent to which public policy in the developed world from 1980-2010 has clearly been in better alignment with mainstream thinking about macroeconomic policy than was policy in the 1945-75 era. Either, it seems, this should have brought some clear benefits in terms of improved economic outcomes or it should say something very bad about the basis of these prescriptions. And it seemingly hasn’t led to better outcomes—growth in per capita income has not been faster, and the economy hasn’t actually gotten more stable.

I don’t have any especial insights into the economics profession, although I’m surprised at the suggestion that it’s not only monolithic but in a direction that accords with my own policy preferences.  Certainly, the economists who taught the handful of college courses in that discipline I took in the middle 1980s were neither monolithic nor fans of laissez faire.  But there does seem to be a bipartisan consensus among the types of people who would be considered seriously for Treasury Secretary or Fed Chairman in favor of globalization and free flowing capital.

Otherwise, our public policy would seem to have been aimed over recent decades — going back to the New Deal — toward redistribution of income from the haves to the have nots. The main change in federal policy that would seem obviously to have been in the other direction is the move away from confiscatory taxation.  We’ve gone from a system, as recently as the start of the Kennedy Administration, in which the top marginal rate was over 90 percent.  Kennedy persuaded Congress to cut it to 70 percent and Reagan managed to get it into the mid-30s, a range around which it has fluctuated since.

Presumably, the impact of that is that the very rich can keep most of their money, rather than forking almost all of the “excess” to Uncle Sam.   That strikes me as reasonable enough.   But, certainly, that policy allows  for greater disparity at the top of the economic ladder.

But I’m not sure that there’s a tremendous social problem with Bill Gates having, say, $100 billion to devote to his philanthropic pursuits rather than, say, $20 billion.  (Although, perhaps he’d have stayed at Microsoft longer and not started the Gates Foundation?)   It’s really play money at some point, from even the perspective of the upper middle class.   What’s more meaningful, it seems to me, is how well most of us live, not our relative deprivation compared to the Lives of the Rich and Famous.

On that front, it would seem we’re markedly better off than we were at the end of the Carter Administration.   I can still remember when microwave ovens and color televisions were luxury goods and having a telephone in one’s car likely meant said car was a Rolls Royce.   For that matter, as recently as the early 1980s, having a second car in the family was unusual.  Going out to dinner was a rare treat.

The average American of today lives better than all but the richest of 1977.  And, because of the march of technology, even the working poor have goods that were simply unavailable at any price in those days.

Update (Steve Verdon):

I haven’t read Quiggin’s book, but based on what he has written at the above link I’d say that he fails in his argument against markets because he fails to consider the political aspect of economic policy. It isn’t merely an academic exercise devoid of politics and this is a crucial mistake, if indeed he has made it.

My view about our current mess is that it is due at least in part to politics. There is a relationship between Wall Street and Washington D.C. that is very harmful. I typically refer to this relationship as being incestuous in that people move back and forth between Wall Street and D.C. pretty regularly. It is not uncommon for the Secretary of Treasury to be from Goldman Sachs (Paulson and Rubin to name two). Given this relationship is it surprising that there are policies that benefit financial firms? I’d argue not at all, it is in fact to be expected. After all, this creates a situation where the interests of many in D.C. are in line with the interests on Wall Street.

This is a bad incentive structure, to say the least. Also, this doesn’t lead to policy that is driven by academic considerations such as improving efficiency or higher growth. Instead it is policy that is geared towards helping Wall Street and it is cloaked in free market language. I’m sure if we asked Quiggin he’d likely admit that the influence of Wall Street firms are a problem. But then it isn’t really pure market liberalism that is determining policy, but really corporatism.

Now I want to be clear, I’m not making a partisan argument here. I’m not saying Obama is worse than Bush. Bush didn’t meet a spending bill he didn’t like. The highway bill, the energy bill, Medicare Drug program, and so on and so forth. Special interests were hard at work back in 2000-2008 getting whatever they could then. Same thing back in 1992-2000, and I’m sure they are hard at work right now on the Obama Administration.

I would also argue that Japan’s economic policy was characterized by corporatism as well and interestingly enough Japan went through a crisis very much like the one we are in. And the result was Japan’s lost decade. And I’m not saying that pure market liberalism will result in a utopia or even an economy without major recessions. I just think it is silly to blame it on market liberalism. After all, the first recorded bubble was the Dutch Tulip Mania of 1637. Adam Smith wouldn’t be born for almost another 100 years. And despite lots of attempts at trying to “engineer” the economy we’ve had some pretty good recessions in the post-WWII era.

And I’m not arguing that there is no role for government either. Part of the problem with activist government is that obtaining an efficient outcome is very difficult even in the setting with a benevolent dictator who doesn’t have to worry about being re-elected. One proposed solutions is to have rules such as a rule for the money supply to keep inflation in check. Or course, the problem with rules is that the same force that prevents discretionary policy from obtaining the “optimal” outcome would also be at work when designing these “rules”.

Basically, we really haven’t tried market liberalism, thus it is rather silly to say it is all wrong.

FILED UNDER: General
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. M1EK says:

    Nonsense. The typical American’s real income has dropped; and cheaper gadgets don’t come remotely close to making up for the huge real increased costs for things like education and health care.

  2. Dave Schuler says:

    Otherwise, our public policy would seem to have been aimed over recent decades — going back to the New Deal — toward redistribution of income from the haves to the have nots.

    I think that’s an overstatement since on net, i.e. when everything is taken into account, our system is mildly progressive or redistributive rather than strongly so.

    We tax people with money because they have money to tax and the preponderance of the tax proceeds are spent on our military, sent back to people with money in the form of social security or Medicare payments, or used to pay the interest on our debt (which also goes to people with money).

    IMO a better characterization of our system is that it’s a profoundly conservative one not in the sense of conservative politics nowadays but in the sense that it serves to maintain the status quo.

    There appears to me to be no particularly good reason that we have an income tax rather than a wealth tax or that estate taxes are inherently evil in some fashion. However, taxing the accumulation of wealth rather than wealth itself and ensuring that once accumulated it stays in the hands of heirs doesn’t sound like redistribution “from the haves to the have nots” to me.

  3. James Joyner says:

    The typical American’s real income has dropped; and cheaper gadgets don’t come remotely close to making up for the huge real increased costs for things like education and health care.

    It’s not just gadgets but actual lifestyle. We live in bigger, nicer houses. Drive better, safer, newer cars. Eat better food. (Or, at least have it affordably available to us if we chose to avail ourselves of it.)

    Yes, healthcare costs have skyrocketed. But most of us are still insured and have access to it. And it’s leaps and bounds better than it was 30 years ago.

    College education is less subsidized than it was a generation ago. I’m not sure there’s much evidence, though, that it has driven people who ought to have been in higher education out of it.

  4. James Joyner says:

    I think that’s an overstatement since on net, i.e. when everything is taken into account, our system is mildly progressive or redistributive rather than strongly so.

    We’ve got Earned Income Tax credit, all manner of school subsidy programs, welfare, food stamps, public housing, Medicaid, and all manner of tax policies that are aimed at low earners. The broad aim of our social policy is redistributive.

    To be sure, the military-industrial complex pours money into successful companies and funds a middle class lifestyle for many. But that’s a net effect of a policy choice rather than the aim.

  5. Steve Verdon says:

    Nonsense. The typical American’s real income has dropped….

    Uhhmmm…no.

  6. steve says:

    “Otherwise, our public policy would seem to have been aimed over recent decades — going back to the New Deal — toward redistribution of income from the haves to the have nots.”

    You need to not just talk theory, but look at the real numbers. Wealth has been accumulating at the very top. Not just income, but total wealth. More importantly, economic mobility has decreased. See the work of Saez, who won the john Bates Clark medal, at least partially for work in this area. Earnings have been pretty stagnant for the last 10-20 years, even though productivity has been up, unless you are in the top 1%, especially the top 0.1%.

    The argument about cellphones and microwaves always strikes me as odd. People in the 70s had indoor plumbing, which people in the 30s probably did not always have. People in the 30s had electricity, which those in the 1890s did not have. Etc., etc. You need a better indicator. For one thing, most households today have two people working as opposed to the 60s and 70s. You need a better measure, like the hours of work needed to buy something. You should also note how often you need to buy stuff. You can buy cheaper clothes at WalMart, but they do not last as long.

    Lastly, I used to not worry about inequality per se, but rather the lack of mobility. i now worry about the absolute inequality because of the extreme concentration of wealth into the hands of a very few. if it was just play money and they were buying bigger toys, well maybe Pareto was correct. However, in this country, money=power. The ultra wealthy are using that money to influence policy decisions (and ensure their continuing wealth). The right complains about Soros. Guys like Adelson and Milliken exist on the right (need I mention Murdoch?). Is it really good for our economy to be run by an oligopoly? Is it good that so few people have so much money that they can influence government? Think about it.

    Steve

  7. Dave Schuler says:

    We’ve got Earned Income Tax credit, all manner of school subsidy programs, welfare, food stamps, public housing, Medicaid, and all manner of tax policies that are aimed at low earners.

    And the total amount attributable to all of those things is a fairly small fraction of the total. Most of the federal budget goes to the military, Social Security, Medicare, and debt service. Once upon a time there was a pretty good argument that Social Security and Medicare were from the haves to the have nots but things have changed since then.

    Most of the budgets of state governments goes to Medicaid and schools. Medicaid is definitely redistributive. Are public schools redistributive?

  8. The argument about cellphones and microwaves always strikes me as odd. People in the 70s had indoor plumbing, which people in the 30s probably did not always have. People in the 30s had electricity, which those in the 1890s did not have. Etc., etc.

    This only strikes you as odd because you live in the modern world, and share a modern viewpoint that expects that progress is the normal state of human history. While one can certainly study history and make an argument that this is so, a thorough study of history of any length makes it clear that this isn’t something that should be widely assumed. For large swaths of human history, stagnation or even regression were the norm. And even during the periods of “progress”, the rate of progress was slow compared to the modern era.

    It’s also not at all a given that the rate of progress we currently take for granted will continue indefinitely. Periods of progress have stopped before, historically, and if we extend our timeline into infinity it’s almost a 100% certainty that our current sting of progress will, eventually, halt.

    Given that, what exactly is wrong about using progress as a benchmark? It’s not perfect, but there’s no such beast.

    More importantly, economic mobility has decreased.

    This, on the other hand, I agree is a real problem and a serious one. Worse, it hasn’t just decreased, it’s decreasing. I personally don’t really care if there’s a huge income gap, if there’s an honest chance for hard working people to work their way to the top. Our culture is still one of the most class-mobile societies in the history of the world… but it’s not as good as it used to be, and it’s getting worse instead of better.

    I also believe, however, that the causes of this are complex and solutions aren’t easy. I do think, though, that it’s the proper area for our policy to focus, rather than on some kind of artificial redistribution.

  9. Michael Reynolds says:

    Basically, we really haven’t tried market liberalism, thus it is rather silly to say it is all wrong.

    Isn’t this precisely the argument that Marxists make? That we should not judge their theory since the application of their theory has never been carried out under optimal circumstances?

    Isn’t it logical to expect, given human history, that any economic theory will upon collision with the real world be transformed? And doesn’t that mean that economic theories are unable to be tested, incapable of proof or disproof, and therefore not science but perhaps art or guesswork?

  10. John Quiggin and Young Matt Yglesias, two more statist apparatchiks that think The Road to Serfdom is a plan instead of a warning.

    I was rereading The Road to Serfdom on a trip this past week and it is depressing to realize just how prescient Hayek was.

  11. Steve, as Hayek says, price in a free market is a much better transmitter of information than anything any central planner can possibly devise. The fact that price in a free market is not a perfect transmitter of information somehow is used against the liberalization (nineteenth century meaning, please) of markets in a classic perfect being the enemy of the good scenario, even though every planned system functions worse, and necessarily so for those unfamiliar with Hayek.

  12. Steve Verdon says:

    Isn’t this precisely the argument that Marxists make? That we should not judge their theory since the application of their theory has never been carried out under optimal circumstances?

    I suppose they might argue this, but I’d argue the theory. The theory has crap incentives:

    From those according to ability; to those according to need.

    I have no ability and I need a porsche.

    Plus there is all that nonsense about the dictatorship of the proletariat and eventaul withering of the State. Exactly how often do dictators allow their power to wither away? I’m thinking none. When someone tries to take their power they take that person’s life.

    Isn’t it logical to expect, given human history, that any economic theory will upon collision with the real world be transformed?

    Theory? No. Policy? Yes. This was part of the Lucas Critique. You can’t formulate a policy without taking into consideration how people will react, and even there that is going to be some guesswork.

    I’d also say that dynamic time inconsistency tells us something similar. From a theoretical standpoint we might know what the best policy is. But when there is an attempt to implement it there are problems.

    In other words, the theory often tells us that certain things are going to be problematic as you note. To me this is often an argument against many policies.

    As Charles says, lets not let the perfect be the enemy of the good (or better).

    Dave,

    Once upon a time there was a pretty good argument that Social Security and Medicare were from the haves to the have nots but things have changed since then.

    Is this supposed to be an argument that Social Security and Medicare are not redistributive? Just because a government policy takes money from the little guys and gives it to the rich guys does not mean the policy is not redistributing money. It may be bad, immoral, stupid, etc., but it is still redistributing money from one group to another.

    Social Security and Medicare are inter-generational income redistribution plans. That is what those two plans do when you get right down to it. Now, the elderly tend to be one of the wealthier demographics in our society, but its still redistribution.

    Also comes with a really crappy incentive too in that it incentivizes people to Reduce savings for retirment and medical expenses when they get older. Why save, when you are going to get a check from the government and have them pick up much of your health care expenses?

  13. Gerry W. says:

    We enjoy many things that we have not had before, but it comes with a price. We buy cheap goods from third world countries and we lose the jobs for it. China has an advantage towards the Westernized countries as we have big government programs that we have to pay for. We have two wars that we have to pay for. We are all over the world and we are doing too many things and we are not concentrating on running our country. We have two political parties that have no idea in running a country as they are stuck with their ideologies. Our incomes have been stagnate, factories have closed, and the only growth is from companies who laid off people and claim productivity. We also not only have federal deficits and debt, but we also have a high personal debt.

    Steve makes a good point on inequality. It was not that big of a deal before, but now with factories closing and globalization and cheap labor paying a dollar an hour, the middle class cannot survive in this country. We have seen years of failed ideology and it has put us years behind in moving forward.

    And I agree with Russell, things are getting worse.

    I predict that our unemployment will stay high for 10 to 20 years. Our incomes have to come down to third world countries. They won’t tell you in Washington, but I will say it. We did not invest in our country, in our people, and in the future. Hence, the high unemployment and problems we will have in the future.

    The problems we have come directly from democrats and republicans of welfare ideology, of militarism, of laissez-faire in not fixing our problems, of invoking religion in government and not paying attention to fiscal matters, and of those who only believe in the constitution and not doing anything else (laissez-faire).

    Getting on web sites have been a real opener. And all I can say is that democrats are dumb and republicans are a bunch of nuts.

  14. Steve Verdon says:

    Steve makes a good point on inequality. It was not that big of a deal before, but now with factories closing and globalization and cheap labor paying a dollar an hour, the middle class cannot survive in this country. We have seen years of failed ideology and it has put us years behind in moving forward.

    Please stop with the Dobbsian stuff here. Technological advancement and innovation is the biggest job killer ever. The advent of the mechanical computer put many human computers out of work. Technological innovation and advancement put many a farmer out of business.

    Globalization is not going to wreck the economy. Promoting more trade is usually a way to increase the number of jobs. Reducing trade on the other hand tends to decrease the number of jobs. Yes, low skilled jobs will go over seas, and even some higher skilled jobs as other countries “catch up” to the U.S. in terms of skilled workers in their labor force increases. But this idea that unemployment will become permanent is just nowhere supported by the evidence.

    We tried the protectionist stuff back in the 1930’s and it helped deepen and lengthen that down turn in the economy. Lets not do it again.

  15. Michael Reynolds says:

    I’m certainly not arguing that Marxists are correct. Particularly in their anthropology which seems to hold that humans will work just as hard for someone else’s necessities as they will for their own luxuries.

    Yet, they would have their own array of counterarguments suggesting that man as he is is the product of a system they hope to change. And that in changing the economic system they would change man’s notions of work and incentives.

    Of what use is an economic theory that cannot be put into practice as policy? How can it be tested? Isn’t it possible to create an economic prescription that works perfectly in the abstract but fails when it comes into contact with reality? Isn’t it also possible to imagine a theory that fails in the abstract but when applied to reality, when it is in effect modified by reality, yields a good result?

  16. Ah, Year Zero. We are going to make men better.

    Just watch out for the Reavers.

  17. Gerry W. says:

    Steve,
    I never suggested protectionism. For some reason when I talk of globalization, people automatically think I am talking about protectionism. What I have suggested is that we invest in our country, in our people, and in the future.

    1. Invest in our country: That is energy independence for security and jobs. You do everything from nuclear to drilling to alternative energy. Natural gas can be used for trucks as Boone Pickens has suggested. A new air traffic control system would help airlines become more profitable as they would use less fuel. And this means they can buy more aircraft. High speed rail may also provide jobs. It is expensive, but you will need to find a way to preserve the middle class.

    2. Invest in our people: That is mandatory vocational training. You will need an educated society.

    http://www.hudson.org/index.cfm?fuseaction=publication_details&id=5656

    3. Invest in the future: That is federal research grants to universities and businesses.

    http://www.newsweek.com/id/222836/output/print

    This is the only way we will be able to compete with globalization and the political parties do not get it.

    I don’t know where you live. I live in the Midwest in a small town. And like many towns, we saw our jobs leave. My town of 16000 has seen 2000 jobs lost with three factories closing. It is not only globalization, it is also automation and the internet. There is no jobs where I live and there won’t be even with a recovery.

    In any case, cities and states cannot compete with third world countries. We cannot compete with 2 to 3 billion cheap laborers now that other countries opened up.

    Cities and states are grasping for extension of unemployment benefits and casinos for their states. Why? Because there is nothing else.

    Promoting more trade means nothing where I live. Cheap labor will win every time. We have lost some 2 to 3 million jobs to cheap labor.

    The evidence is there with high unemployment and or employment that pays less. It is not only globalization, but also high deficits and debt which will keep our country from growing faster, it is failed ideology from both political parties and not policies to make our country prosperous, it is the baby boom generation and their reliance on the younger workers, it is finding a job that will pay less than the one you had before, it is high consumer debt, it is 2 to 3 billion people that will want jobs in the world. We did not invest in new jobs or materials at the federal level (federal research grants) it take years for science and investment. We sat around with “stay the course” and tax cuts which don’t solve problems. The constitution does not solve problems. And “free market principles” by Sarah Palin and others by themselves will not cut it. The support of small business means nothing in my town with the loss of factories. Small business cannot survive in my town without the factories. And what widget can be made here and not in China?

    There are no new jobs to go to as we got rid of the old jobs. It takes years to replace. Funny how politicians ignores these facts. Funny how things are so rosy. But they have no answers and they ignore what is going on. We are spending money on wars (needed of course) and not fixing our country. I view most jobs, if possible, can move out of the country. China already has a plane that is equivalent to the Boeing 737. McDonalds has been testing a drive thru in which you order your hamburger from someone in India or Pakistan. Both technology and cheap labor is making this happen.

    We had situation of one or two decades of high unemployment in the past. The 60’s and 70’s with inflation/stagflation is a good example. And we will see it now as we are bogged down with so many negative things. LBJ did a “guns and butter” economics (years of inflation/stagflation, higher interest rates, and higher unemployment) and Bush has done the same and Obama is doing the same also. So all that is a negative.

    We have seen over thirty years of our textiles, our steel, our electronics, and our cars go overseas. Japan did a job on us, and now it will be China and other countries. China with less government commitments, with less military commitments, with surpluses, over a billion people and some 8% growth to our less than 3% growth tells us all in who will be the leader in the future.

    I know people don’t like being alarmed, but it is all there and we sit back and let it happen.

  18. Dave Schuler says:

    Is this supposed to be an argument that Social Security and Medicare are not redistributive?

    No, because that wasn’t what James asserted. His claim was that we were redistribuing from haves to have nots. But I don’t think the evidence supports that that’s what’s happening. I think the evidence is better than we’re redistributing from haves to other haves or from haves to “have somes”.

    Just to be clear, I have considerably more problems with redistributing from people making $10 million per year to people making $100,000 a year than I have with redistributing from people making $10 million per year to people making under $10,000 per year.

    If we’re going to have a modern society, we’re going to redistribute from haves. We can’t finance the various public goods that most of us agree are necessary like public health and national defense solely on the basis of a head tax.

  19. John Quiggin says:

    I discuss a lot of this in my book, particularly in the chapter on Trickle Down. You can read a fairly complete draft here/.

  20. Gerry W. says:

    That is some book from what little I read. I dreamt of writing one like it. You beat me to it.

  21. I suspect James that what you are seeing is disagreement along a continuum. They may not agree on much, but they know there are sides to be on. To borrow from Terry Pratchet, it isn’t tortoises all the way down, it’s capitalists with similar world-models all the way down … to left leaning capitalists with the same world-models.

    There are an odd group of people who don’t buy into that. Their very strangeness (heterodox economics) seems to undermine what should be a good endeavor.

    There are some reasonable people who suggest that happiness might be a better measure of progress than GDP, for instance. But they are so few that they tend to be given just a moment, before everyone returns to GDP projections and the conventional world-view.

    It’s weird. You’d think that the Christian Right would be on about a salvation index or something … but for most of them too … it’s GDP.

    I personally think GDP is very good for what it is, a year-to-year comparison of economic activity, but I’d like a more flexible view of progress and prosperity.

  22. BTW, we went from a society which could support a middle class lifestyle on a single income, to one in which women had to go to work (increased labor participation barely holding the line on buying power), and now on to one in which men are leaving it (higher unemployment among males).

    I don’t see formulaic right or left answers as very helpful in that. I’m tempted to think a less materialistic society would be safer one (with less leveraged families), but if housing costs stay high, it’s kind of hard for a family to choose a “moderate middle class lifestyle.” Not in states with half million dollar starter homes.

  23. sam says:

    I was rereading The Road to Serfdom on a trip this past week and it is depressing to realize just how prescient Hayek was.

    Perhaps you should start the Geteon Society, Charles, and have a copy placed in every hotel room.

  24. It’s not just gadgets but actual lifestyle. We live in bigger, nicer houses.

    I could ask ‘live in’ or ‘own’?

    1 in 4 mortgages ‘underwater’

  25. Drive better, safer, newer cars.

    Americans spending longer to pay off auto loans

    I think sir, that you are confusing debt with prosperity.

  26. magoo says:

    The big problem in saying that things are better off now than in 78 is the obvious – few can afford to have single income households.

    Both spouses have to work and pay for childcare.

    That means less time with the kid and less security.

    I just don’t see how having a microwave and a DVD player measures up to that. Up to the loss in security and to the necessity to have both parents work.

  27. […] January 19, 2010 One common refrain in the comments section of yesterday’s income inequality post is that much of the lifestyle gain made by Americans in the past thirty years is a result of […]

  28. If I could afford it, I would be happy to place a copy in every hotel room on the off chance that even a few people would read it.

    Just curious, but is anyone aware of a refutation of Hayek’s arguments against central planning?

  29. […] a post yesterday James asserted: Otherwise, our public policy would seem to have been aimed over recent decades — going back to […]

  30. Gerry W. says:

    I don’t know that much about Hayek other than what people talk about. Central planning can mean many things in my book. It can mean the old Soviet style planning, and I assume that is what Hayek is talking about. But we see central planning in all forms and mostly they fail. Trickle down is a form of central planning and does not reach the bottom 20% to 30% of the population, so it is somewhat of a failure. We also know that welfare planning, militarism, laissez-faire, and religionism is a failure also.

    There is not one economic theory that is perfect.

    In my book, we have to balance the budget and have fiscal responsibility, but also we have to solve the problems of the day. The biggest problem of the day is globalization. And to tackle that you need to invest in your country, in your people, and in the future. Since we have not done that, we will suffer many years for doing nothing.

  31. Drew says:

    LOL (at the thread)

    Excellent essay and follow on by SV.

  32. Drew says:

    To be clear: excellent essay by JJ, and follow on by SV.

  33. Steve Verdon says:

    I know this is only a wiki of the book thus is more limited, but I’ll be damned if I find some of the stuff in there a bit perplexing. Take for example the entry on the implication of the Efficient Market Hypothesis (hereafter EMH, note too the discussion appears to be limited to the weak form of the hypothesis). The basic gist of the EMH is given as,

    The alternative interpretation, more logically consistent (if less consistent with reality), that the financial market price of an asset was not merely the best estimate of its value relative to other assets of the same kind, but was the best possible estimate, given available information.

    Which fits pretty well with what I’ve read, but then the entry goes on to seemingly imply that the above statement of the EMH is that markets are always going to be exactly right in its pricing. But then why is the word estimate in the definition? Why is there the conditional tacked on at the end, you know the part that says, “given the available information”.

    I read the above statement of the EMH and don’t see how it says, “Bubbles are impossible” yet that seems to be the conclusion many have reached. I read the above and it says, in general you cannot hope to beat the market, because in general the market will be efficient in its pricing. On occasion this may not hold (bubbles), but in general it will be. It seems to me that in effect people are saying, “I don’t believe the Strong EMH, but I’ll attack the Weak EMH as if it is the strong form.”

    And really, the best part is pointing to the writings of non-economist Thomas Friedman…whisky tango foxtrot?

    Then moving of from this annoying part we get the following a bit later,

    The implications of the efficient markets hypothesis go well beyond financial markets. The EMH provides a case against public investment in infrastructure….

    Uhhhh, what? Really? The EMH says that there are no issue with public goods and externalities? I looked around and couldn’t find much making this kind of claim. Because the financial markets are generally efficient in pricing we don’t need public roads, or national defense? Really? I’m sorry I’m calling bullshinto on this until I see several citations.

    Quiggin does indeed start to change the definition he is attacking a bit later,

    The EMH implies that the prices generated by stockmarkets and other asset markets are the best possible estimate of the ‘right’ price for the assets concerned.

    What happened to “given the available information”? Even further on, the word estimate starts to disappear.

    All-in-all, if the book is like this and updating my prior probability that I’ll end up hurling the book across the room said probability just go higher.

    To be a bit fair, it probably isn’t as simple as the EMH is true or not. No theory or hypothesis is true. Every theory is an approximation of reality. And the reality is that generally, most of the time, you cannot beat the market. And bubbles do happen, and the EMH is annoying silent on explaining them. So there is quite a bit of room for improvement here. If this is Quiggin’s argument then fine, but at this point in time I don’t see the support for the sweeping changes he is advocating.

    As a side note, I’d be curious to see what kind of investment strategies Quiggin uses.

    Michael,

    Yes, its a tough problem. Humans seem to have a ginormous inclination to tinker with other people’s business. We can’t be content to just leave well enough alone.

    Look at Gerry W.’s post above. Energy independence is a wonderful bromide that people love to toss out. But in the end it wont give us a net increase in jobs, and may very well lead to a net decrease. I’ve discussed this in other posts here and I’m too lazy to search for them.

    Then there is the mandantory vocational training. We’ll get rich by fixing each others plumbing or something. The research grants aren’t too bad if you are talking about basic research that is very much like a public good (high sunk costs, very low marginal cost).

    My point isn’t to slam Gerry, but everyone and their uncle Bob seems to have these kinds of plans. Implement my plan and the jobs will stop leaving (or will be replaced by fiat) and the country will be strong again and we’ll return to the good times.

    The bottomline is that these plans are often ill concieved. For example, if we really wanted to be energy independent we could do it tomorrow. It would cost a huge amount though, and in the end nobody would want to pay that cost tomorrow or even over 10 or 20 years.

    Basically, I see it as there being a significant under appreciation for unintended consequences and/or the incentives many of these plans engender. Believe it or not Bill Clinton put it very well, I’m paraphrasing something I read that was attributed to him, “Sometimes we don’t want to fix the problem if the fix is worse than the problem.” We often fail to look at what are the implications of any “fix” to the current problem.

  34. Gerry W. says:

    Another problem is economic cycles. It used to be that you had tax cuts and the fed lowering interest rates, that you would have an economic recovery for some 4 years or so. After having 8 years of tax cuts, you have to ask the question whether tax cuts (and the continual deficits and debt) have anymore bite in them. The same goes for the fed. The fed has kept interest rates low for so long. Are they effective? And when will they raise interest rates? And as what point will that choke the economy. And none of this means a hill of beans as long as we keep ignoring globalization and other problems.

    And then you have to ask whether tax cuts are important or if jobs are important. I mean, we lost jobs while having tax cuts. So, tax cuts don’t make any sense if you keep losing jobs. This is what we saw in the Midwest in the last decade.

    Normally, without doing harm to the country, you should have tax cuts for two years and the fed to accommodate and that would be enough for an economic recovery. Since everything was overdone on failed ideology and that our problems have been ignored for so long, it will take a long time (10 to 20 years) to get out of this mess.

  35. Steve Verdon says:

    Trickle down is a form of central planning and does not reach the bottom 20% to 30% of the population, so it is somewhat of a failure.

    Uhhhmmm only if you broaden the definition of “trickle down” to be so wide that it becomes meaningless (i.e. it means whatever I want it to mean as with Humpty Dumpty).

    Now the issue with trickle down is that there is nothing in economics that says that a market based allocation of goods has to be equitable. It does say it will (assuming no externatilities, public goods, etc.) efficient, but that efficient allocation can be very inequitable.

    The biggest problem of the day is globalization.

    Yes, having more people to trade with is never good. Having more customers is always bad. And from a consumer’s standpoint more competition (and lower prices) is never good. Yes, higher prices, less competition, and fewer choices. Why its 1935 all over again. Sorry, but I’ll pass on that corpratist nightmare.

    And to tackle that you need to invest in your country, in your people, and in the future. Since we have not done that, we will suffer many years for doing nothing.

    And who decides what kinds of investments? Seriously, do we leave that decision up to the individual? If a guy wants to build up his human capital does he get to decide or is that decision made for him…oh wait, mandantory vocational training. Nevermind.

  36. sam says:

    I’m curious, Steve. Do you think this has any effect on the EMH? Do you think any form of the EMH can survive in such an environment?

    Stock Traders Find Speed Pays, in Milliseconds

    For most of Wall Street’s history, stock trading was fairly straightforward: buyers and sellers gathered on exchange floors and dickered until they struck a deal. Then, in 1998, the Securities and Exchange Commission authorized electronic exchanges to compete with marketplaces like the New York Stock Exchange. The intent was to open markets to anyone with a desktop computer and a fresh idea.

    But as new marketplaces have emerged, PCs have been unable to compete with Wall Street’s computers. Powerful algorithms — “algos,” in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.

    High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.

    I find that last paragraph troubling–this seems to me to be information asymmetry to the nth degree.

  37. Gerry W. says:

    Well Steve, here is the problem. We can ignore everything and let the world pass us by. I understand the argument that government can’t do anything right. But who else is going to do it? The republicans like to bash and criticize government, but they have no answers either.

    What we do see is that China is building whole cities, they are buying raw materials and making contracts for oil. We can ignore the world as we have seen in the last decade or we can try and do something about it.

    Energy independence may or may not produce jobs. However, if we don’t have enough oil, we will lose jobs and the country could go back into a recession on high oil prices. Furthermore, the country that comes first with new technologies in energy will be the big winner. We cannot sit back and do nothing. We have been debating on what to do with energy for over 30 years and the price of oil keeps going higher. At some point, it will come to a head. With China in the game, there is no room for economic growth.

    On vocational training. It used to be you went to college or to the factory. The days of relying on the factory are gone. We are at a point in my town that carpenters and plumbers do not have work as people hold back or do it themselves to save money. People have hibernated in their homes with the loss of factories. There is no other work, so people just sit around. Republicans say they support small business, but that does not fly here. Small business rely on big employers. So, we are in a hole and there is no easy way out. Furthermore, China and other countries will take our jobs and we can sit around and do nothing or at least know something. Again, no easy answers. As we give up our old jobs, there is no new jobs to go to.

    We lost a lot of basic research. Of course we had a president that did not care about science. Again, the country that comes up with more science will be the winner. We used to do great things in this country, like building the interstate, the Hoover dam, or putting a man on the moon. We have to regain leadership, or we can ignore it and let some other country do it. Failed ideology will not work.

    The cost of doing nothing is at this time more than doing nothing. Doing nothing as we have seen over the last decade has created higher unemployment. That is less tax revenue for the cities, the states, and the federal government, and for all the programs we have to support. We have a bigger gap between rich and poor. We have seen our factories close and leave the country. We have seen 8 years of our jobs going overseas, our money going to Iraq, and the neglect of the country. Like I say, it will take 10 to 20 years to get out of this mess.

    Voting idiots in the White House and relying only on failed ideology will not make the country. Eisenhower created the Interstate and that created more commerce and tourism. Nixon put in security systems in the airports and at that time it was unheard of. We put a man on the moon by a president who said we can do it at the end of the decade. Just where is the greatness in this country? And remember, any widget that has to be made by Intel or by Apple can be made in China. So we have to work harder and be smarter to maintain our standard of living. And furthermore, China has over 1 billion people. That means they have 3 times the chance of having more in scientists and engineers. Also add their 8% economic growth and we are falling behind.

    In any case, I don’t see anyone else having better answers. Sarah Palin talks of “free market prinicples” and that don’t mean anything in my town. So all this talk I see on other web sites that it is just the constitution or just tax cuts don’t make it either. These ideologies do not work by themselves. You still have to solve problems. And we have seen a decade of doing nothing.

  38. Gerry W. says:

    “Uhhhmmm only if you broaden the definition of “trickle down” to be so wide that it becomes meaningless (i.e. it means whatever I want it to mean as with Humpty Dumpty).”

    ” Now the issue with trickle down is that there is nothing in economics that says that a market based allocation of goods has to be equitable. It does say it will (assuming no externatilities, public goods, etc.) efficient, but that efficient allocation can be very inequitable.”

    And what we do know is that “trickle down” failed. It is that simple. We saw it failing over 5 years ago.

    “Yes, having more people to trade with is never good. Having more customers is always bad. And from a consumer’s standpoint more competition (and lower prices) is never good. Yes, higher prices, less competition, and fewer choices. Why its 1935 all over again. Sorry, but I’ll pass on that corpratist nightmare.”

    It is not working the way you say it is. China and other countries have taken a lot of our middle class jobs. Our middle class wages have to come down to their level. My town has no jobs. We heard a president say for 8 years that “free trade is good” as we lost jobs. Ignorance and failed ideology prevails.

    “And who decides what kinds of investments? Seriously, do we leave that decision up to the individual? If a guy wants to build up his human capital does he get to decide or is that decision made for him…oh wait, mandantory vocational training. Nevermind.”

    Of course having a president for 8 years with no interest in science I suppose is better. Our country always had federal research grants and it just needs more. Many decisions on education can be done at the local level.

    You can laugh at vocational training or maybe the Hudson Institute but we have to deal with the real world and not the world of failed ideology in which we have seen for 8 years. But hey, it will take us 10 to 20 years to get out of this mess. And that was for doing nothing.

  39. A classic false dichotomy, the options are not hand it over to the current Democratic leadership or fail miserably. And your summaries of “doing nothing” are utterly ignorant of what has transpired since 2000. Do you really think social spending declined under Bush?

    Sorry you don’t like free market principles (by the way, why the scare quotes?), but it represents the most ethical and moral choice for all involved, as well as the best economic choice. The greatness of this country has been unleashed by the freedom of its inhabitants to make their own choices about what was best for them. Hopefully, that won’t be thrown away anytime soon for a utopian transformation of our society.

  40. Steve Verdon says:

    Gerry,

    The economy is not like a car. You can’t just open the hood and tinker here and there, close it and then get going again. Its a nice analogy, its also comforting, but it isn’t true.

    I think the economy is more akin to a biological entity that is evolving over time. Poke one part and we don’t know exactly how things will respond. This is especially true with the way most policy is implemented in this country.

    And what we do know is that “trickle down” failed. It is that simple. We saw it failing over 5 years ago.

    Let me see….

    5 years ago the economy was growing and unemployment was droping. I don’t know if I’d call those policies trickle down, but it certainly wasn’t a bad time.

    It is not working the way you say it is. China and other countries have taken a lot of our middle class jobs.

    Like I said, you have a fundamentally wrong way of viewing the economy. It changes, and jobs come and go. Always has, always will. This idea that government can stop it or even do much to “fix” the problem is just not supported by historical evidence.

    You can laugh at vocational training or maybe the Hudson Institute but we have to deal with the real world and not the world of failed ideology in which we have seen for 8 years. But hey, it will take us 10 to 20 years to get out of this mess. And that was for doing nothing.

    I’m sorry, but you ideology is too authoritarian for me. Mandatory vocational training and all that.

    Many decisions on education can be done at the local level.

    You mean by the local Ministry of Education of the People’s Republic bureaucrat? BTW, in looking at education in the People’s Republic of China vocational training is not even mandantory there.

    Sam,

    For all the sturm und drang about HFT I’m still waiting for someone to show me the problem. I think we went over this at length at Dave Schuler’s site and nobody provided any evidence at all that HFT was necessarily bad.

  41. Gerry W. says:

    Charles,

    We saw 8 years of nothing. Tax cuts and staying the course is doing nothing. We heard “free trade is good” for 8 years while we lost jobs. Again, you still have to invest in your country, in your people, and in the future. None of that was done. And we are where we are. And if you complain about the democratic leadership, then it was the responsibility of the republicans to fix the problems. Since they did not it was time for democrats to come in. Your failure is someone else’s gain.

  42. Gerry W. says:

    Steve,

    5 years ago we saw deficits and debt pile up. 5 years ago and earlier than that we saw our jobs leave the country. It was laissez-faire. However, those in Washington was delighted to sit with ideology that had nothing to do with our economy. We saw the neoconism, militarism, laissez-faire, and religionism. It was 8 years of our jobs going overseas, our money going to Iraq, and the neglect of our country. Doesn’t take a rocket scientist to understand this. The country does not run by itself. It was the roaring 20’s. The money was spent with no future. Bush declared that we would have a balanced budget by 2012. He never took into account of a recession and the other problems that we had. All the stimulating with tax cuts was spent. And now I ask: Now what?

    Yes, jobs come and go. But this time it is different. We never had globalization eating away at our jobs. And the sad fact is that we are losing our standard of living. We saw it years ago. Now, you can’t be that naive.

    And our country or any country is no different than any household or business. You still have to invest in your country, in your people, and in the future. Using useless ideology is a downfall.

    On mandatory vocational training, then I guess you don’t see the problems before you. Of course, we are where we are. After 8 years of ignoring our problems ignorance prevails.

    “Authoritarian”? How about the draft? Or how about religion? How about going to school? How about on how to run a country?

    But as I said before, democrats are dumb and republicans are a bunch of nuts.

  43. Gerry W. says:

    Charles,

    Free market principles don’t work by themselves. It won’t work in my town. We lost 3 factories of 2000 employees. No small business can start up here without the factories. Free market principles works well in China with cheap labor. We are losing the middle class here. You and the rest of the republicans have given no answer. I just laugh when Palin and other republicans talk, as they have no answers.

  44. Gerry W. says:

    Steve,

    The next time your roof leaks, I would suggest not doing anything. After all, it will fix itself.

  45. Gerry, to begin with, I am not a Republican, which is merely the first of many errors you have made that I don’t have time to go into now.

  46. sam says:

    @Steve

    I think we went over this at length at Dave Schuler’s site and nobody provided any evidence at all that HFT was necessarily bad.

    OK, Steve, I’ll go over to Dave’s place and see if I can track down the discussion. I will say, though, that if this sentence from the last paragraph I quoted is true:

    And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.

    I’m not sure if we could ever know if the practice is deleterious of not.

  47. Steve Verdon says:

    Sam,

    Well if nobody knows they were there then how do they know they bullied others into giving up profits?

    And actually, yes, one argument in favor of HFT is that they improve market efficiency and add liquidity.

    Frankly, I’d like to see even a crude theory of how HFT is bad. Simply saying, “I don’t like it” like a mantra is totally unconvincing…well to me at least.

    Gerry,

    Yes, jobs come and go. But this time it is different.

    Yes, its always “different”. Clarion for granting the State more power. Its different and its a crisis, we must take drastic action now before it is too late.

    We never had globalization eating away at our jobs.

    Okay, you do know that technological advancement has destroyed far, far more jobs. Right? How come that hasn’t lead to permanent unemployment?

    And our country or any country is no different than any household or business.

    Other than:

    1. Most sovreign nations own a printing press and can quite literally print money.
    2. Have the power to tax (printing money is really a type of tax).

    You still have to invest in your country, in your people, and in the future.

    See, this is where you fall down. Your statement here implies that the individual is owned by the state. The State must invest in its people, much like a businessman must invest in his property. I reject this as, yes, authoritarian. I’ll invest in myself and my property thank you very much.

    On mandatory vocational training, then I guess you don’t see the problems before you.

    Making people do things against their will is repugnant. I don’t know how you can think otherwise.

    How about the draft? Or how about religion? How about going to school? How about on how to run a country?

    Short answers: oppose it, athiest, oppose it, very skepitcal of most people’s views.

    (On that last one, I don’t think I’d do a great job either. If I were elected President I’d promptly quit. I don’t like the idea of having that much power and what it would do to me.)

    But as I said before, democrats are dumb and republicans are a bunch of nuts.

    Whew, well good thing I don’t consider myself either a Republican or a Democrat.

  48. Steve Verdon says:

    We heard “free trade is good” for 8 years while we lost jobs.

    BTW, if we go back for the last 8 years, 2002 – 2009 the above claim is simply not true. The unemployment rate dropped as low as 4.4% and only started rising when the economy entered a recession.

    Looking at the nonfarm payroll from 2004 – 2006 the average number of jobs added was 186,944. Typically 150,000 new jobs is needed to keep up with population growth.

    The civilian labor participation rate increased from 62% in Sep of 2003 to 63.4% in March of 2007.

    The idea that the last 8 years was nothing but 8 years of job losses is just simply not true.

  49. Steve Verdon says:

    Sam,

    We had the HFT discussion here.

    BTW, funny you should mention moving HFT to Iceland. I play an MMO based in Iceland, and when the order comes down for several hundred players all over the world to do a specific action in game, we all click the buttons at about the same time, and we all end at the same spot, and doing what is being asked of us, all at about the same time. The speed of light…gotta love it.

  50. Gerry W. says:

    Yes, its always “different”. Clarion for granting the State more power. Its different and its a crisis, we must take drastic action now before it is too late.

    Cities and states are struggling for jobs. Factories have closed. Our enemy is not within, it is with third world countries with cheap labor. But since you want to ignore it, then we can have more welfare.

    Okay, you do know that technological advancement has destroyed far, far more jobs. Right? How come that hasn’t lead to permanent unemployment?

    We always accepted technology. And there were always jobs to go to. 2 to 3 billion cheap laborers wanting too few jobs dictates that we have to lose our standard of living. And we know what Japan did in taking our electronics, autos, and steel. And Hong Kong took our textiles. 2 to 3 billion cheap laborers and China’s growth of 8% growth dictates we will lose more. I suspect my town has at least 30% unemployment and there is nothing that will bring back those 2000 jobs. So all the talk in Washington means nothing. We watched it, we lived it, and someone has a screw loose.
    http://www.nysun.com/comments/60366

    http://www.toledoblade.com/assets/pdf/TO51488727.PDF

    But hey, “free trade is good.”

    See, this is where you fall down. Your statement here implies that the individual is owned by the state. The State must invest in its people, much like a businessman must invest in his property. I reject this as, yes, authoritarian. I’ll invest in myself and my property thank you very much.

    The problem is that we can’t invest in ourselves. If you want to try, then come to my town where we have high unemployment. Try starting a business when we lost the factories. Again, the problem is not with the state, but cheap labor around the world. And I guess it is okay for our federal government to say it is okay to send our jobs overseas and send our money to Iraq. It doesn’t add up. Again, we watched it and we lived it.

    Making people do things against their will is repugnant. I don’t know how you can think otherwise.

    Making people lose their jobs and doing nothing about it is repugnant. You only end up with more welfare, less tax money, and less self esteem.

    Short answers: oppose it, athiest, oppose it, very skepitcal of most people’s views.

    It is interesting that the very people who don’t want government in our lives want religion in our government and in our lives. Comical.

  51. Gerry W. says:

    Looking at the nonfarm payroll from 2004 – 2006 the average number of jobs added was 186,944. Typically 150,000 new jobs is needed to keep up with population growth.

    You are only looking at a cycle and not beyond. First, you have pockets of areas that are devastated, like the Midwest. Second, the tax cuts were for the here and now and did nothing for our future. Third, we saw our jobs leave the country. Fourth, we saw our money go to Iraq. Fifth, nothing was done on the budget with deficits and debt. Sixth, our politicians targeted the housing industry and did not pay attention to globalization. And finally, we did not invest in our country, in our people, and in the future.

    Now we know how it works. It was the roaring 20’s, leave office and blame the future administration over a near depression. Nothing was done about the undercurrent of problems.

    And even Bush said “America, has no problems.”
    http://www.youtube.com/watch?v=keN12U2coK8

    One lessoned learned. Never have a social conservative run the country.

  52. If any admins are still reading this thread, please rescue my comment from the spambot.

  53. It is interesting that the very people who don’t want government in our lives want religion in our government and in our lives. Comical.

    I call bullshit. You need to stop projecting.

  54. sam says:

    @Steve

    Frankly, I’d like to see even a crude theory of how HFT is bad. Simply saying, “I don’t like it” like a mantra is totally unconvincing…well to me at least.

    Well, I didn’t say I didn’t like it (I didn’t mention Iceland, either). I just find it disquieting that you can use computerized trading programs to place and cancel stock orders within nanoseconds. And I’m surprised, really, that such a state of affairs doesn’t give you pause. The hazard I see is that the programs, because of the speed and volume of the transactions, might outrun our ability to understand what’s going on. Who knows what the side effects, as those are understood by programmers, might be? What I fear is if there are side effects, they might be devastating. And we’d never seem them coming.

  55. sam says:

    Ah, btw, that’s Sam over at Dave’s place, not me (sam).

  56. Steve Verdon says:

    Ah, btw, that’s Sam over at Dave’s place, not me (sam).

    Ahhh, well you can understand the confusion.

    Gerry,

    Nice to know you aren’t denying that you are in fact a Statist, and that you want to live under the thumb of oppression. Don’t worry, most Americans like that thought too, so in the end you’ll likely win.

  57. Gerry W. says:

    No Steve, what we saw was 8 years of neoconism, militarism, laissez-faire, and religionism. That was on the right. On the left you have welfare and more spending. All we see is ignorance and arrogance out of Washington. We used to do great things, but no more. It is all about winning and ideology. We see what globalization is doing to our country. We are losing the middle class In the end it means more welfare as we are not willing to fix our problems. It has been a real eye opener and I thank Bush for giving us a chance at how far right this country could go. After all, even Cheney said “deficits were good”, and then Bush said “free trade is good” while we lost the jobs. And later Bush said “America, has no problems. I place the republicans as more responsible as they were supposed to understand economics. Republicans have no answer. What a joke.

    You people are really something. Stick with the constitution and fix nothing. Put more religion in government but condemn everything else. Have tax cuts and do nothing. Well we had tax cuts for 8 years and we lost our jobs. Yeah, democrats are dumb and republicans are a bunch of nuts.

  58. Gerry, if you think Bush took the country to the right, well, life is going to continue to be hard for you.

  59. Gerry W. says:

    Bush was many things. Liberal spending to a social conservative who cared little about deficits and debt and about science. He was ignorant of the problems of our country and stayed the course with his ideology and tax cuts. After 8 years of tax cuts, we are still looking for jobs. I am sure life will be hard for me. After all, when you have characters like Limbaugh, Hannity, and Levin pretty much mum on the failures of the republican party and with a democrat party that has no idea on what to do, life will be hard.

    We had the roaring 20’s and nothing was done. Guess history repeats itself and certainly we have the same mistakes over and over again. All those tax cuts are spent and we are in a hole that will take 10 to 20 years to get out of. It’s too bad republicans have no answers, as it is unfortunate for our country.