Cost-Benefit Analysis In A Failing Economic System

9 thoughts on “Cost-Benefit Analysis In A Failing Economic System”

1. Key point: ultra-accommodative monetary policy is (at best) just another form of trickle-down economics. That that has been our political-economic reality tells me that Ronald Reagan, not FDR, was the most consequential president of the 20th century.

   1. FDR had almost 50 years….let’s see if the Gipper has 50 which would be about 10 more years ahead….

2. Fiscal policy is better at producing more robust outcomes due to stimulus being shared better that way. During the GFC, Obama was overly cautious and the Republicans took advantage of his reticence and inexperience. Long on rhetoric short on accomplishments. Bernie Sanders missing the nomination was a bullet dodged for the Democrats. That said, it appears to be Nancy Pelosi’s last hurrah as speaker- not mind you because she is not a good speaker. She is one of the best House Speakers ever. But because history and gerrymander will probably cost the Democrats enough seats to switch to Speaker McCarthy (g-d help us).

3. PS- That is the reason the Democrats need to pass as much of their agenda as possible by the early Spring of next year. It may be awhile before they can do this again. (House/Senate/President control).

4. I wonder if Powell understands that his own getting reelected as Chairman next year, is vastly less important than the well-being of millions of Americans.

   There is a perception that a rising stock market helps people. But it’s just a perception. The reality is, the share of the total pie, for most everyone, is getting smaller.

   The metric of interest should be real, inflation-adjusted wealth. And that metric should be applied to ordinary people, not just billionaires.

   The so-called “job creators” do not create jobs. They will only hire if they can profit, and in every case look to cut a job or send it overseas, where possible. Trickle down does not trickle. It’s all b*******.

   We need an economic system that works for everyone, not just for Mark Zuckerberg or Jeff Bezos.

   The populism that brought us the most incompetent and corrupt moron ever, Trump, will only get worse if the wealth cap continues to grow.

   1. Elmer

      Too right! Trickle down is the biggest con job at least since WWII. It occurred to me as I read H’s post that what is happening to America now is that it looks a lot like 18-19th Century England. The uber rich are in much the same position as England’s peers of the realm, they own or control most everything of value in the country. They invested for themselves and their offspring. Everyone else had to find a place and be happy with it. The merchant class sold the country’s goods but rarely got rich. After the Industrial Revolution, there was a rising management hierarchy, financed by a few merchant bankers. Many of the lower class went into “service” for the rich (see Upstairs/Downstairs). Entrepreneurs in various crafts trained young apprentices, who were often essentially indentured slaves whose parents sold them to their masters. Everyone pretty much had a place they (and their children) occupied with little hope of advancing out of their class assignment. Scions of the rich didn’t have to work if they had an “income” from a trust fund. 100,000 pounds could be placed in trust by a rich parent and create a safe income of “2000 a year” which could support a young gentleman, and perhaps even a servant, as long as the young man didn’t have a gambling problem. Look as us today. Not a whole lot different.

      H also added a quote to the effect that: “… wealthy people are parking more of their cash in debt funds, which account for a significant proportion of lending to governments and households [meaning] the US and lower-income families are becoming more indebted, rich people have more money tied up in debt funds, and less money goes toward fostering innovation and prosperity.” I would extend that thought to companies who have $2 tril or more in cash and equivalents and are more disposed to use that money to buy back stock to enrich the management class than to invest in innovation and job creation.

   2. I agree 100% with EF & Mr. Lucky in regard to the inequities in our system. Being from Chicago, I watched first-hand from the time of boss Richard J. Daley as inequalities in living standards and education unfolded across the racial divide in the city. It was disgusting. But that was only the beginning of the inequity I saw during my lifetime. The divides grew exponentially during the 80’s, 90’s and through the early decades of the 2000s.

      Needless to say, I also favor tipping the balance in favor of broader prosperity and innovation. If we are to complete, I would prefer that all of our people can fully participate in the economy. I don’t reckon the current Fed will have the guts to address the financial inequities, let alone the racial inequities. Powell will leave it in Biden’s hands through raising taxes on the relatively wealthy.

      Taxes can be a help in this regard. But upsetting as it may be for markets, I would look forward to standing and cheering loudly, if and when the President chooses his own Fed Chair.

      The current infrastructure spend in Congress to mitigate climate change also may support broader economic participation. Radical innovations, perhaps safe nuclear (maybe Thorium 232?), and similar radical ideas, sorely needed to save the earth from its people, can also support new type of jobs and participation in the economy.

5. The simplest thing to do to start a change is to make IRS tax returns public information.
   Neither party has the nerve to pass that.

6. H-Man, you unleashed your digital tongue today. Not a viper, not a dog chasing a car. But you were vocal. So how do you resolve “disparity”?