commissioner.org
| Source | Jim Devine |
| Date | 03/03/15/11:07 |
| > Why do these comentators (not JIm) keep mentioning "our strong
> underlying fundamentals"? interesting question. Partly it's because of the return of the "business confidence" vision of the economy amongst observers. This vision preceded Keynes, but is very Keynesian, in which expectations -- how happy businessclowns and consumers are about the future -- drive the economy. It links up with the Wall Street-centric focus of the media, which see it worth their time and ours to report the almost meaningless ups and downs of the Dow (the Las Vegas of Manhattan). Obviously, the Stock Market reflects expectations in a big way, but I think that the extension of this vision to the economy as a whole is over-drawn. In this vision, fear & trembling about what may or may not happen in the coming war against Iraq is front & center, so economists can say that as soon as war matters are settled, everything will be hunky-dory. Complementing this very subjective view of the economy is a nationalistic and neo-liberal vision of the economy in which _of course_ the US "fundamentals" are doing fine since business is getting the government programs, subsidies, and tax cuts it wants more or less and those pesky unions and environmentalists are at bay. (Today, as part of the "Washington Consensus," neo-liberalism and US nationalism are combined, each helping the other.) It's a great country, what? Since flexibility and privatization and all that stuff is taking over the world, everything will work out, as part of a supply-side vision. Of course, it's all great for the individual businesses that the government helps. The Two Towers of the conventional wisdom (over-emphasis on expectations and nationalism/neo-liberalism) distract the observers from the fundamentals that are amiss, i.e., for the US low profit rates, high corporate debt, unused capacity, high consumer debt, a housing bubble, a large deficit on the current account, etc. |
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