Road To Ruin – Recession Britain – The real story behind the economic slump.
Follow the above link to see how Britain’s The Guardian is reporting on the financial situation.
As they describe it:
Our writers look at the real story behind the economic slump. We find out how boom turned to bust, ask who’s to blame, and suggest ways out of the mess we’re in.
Follow this link to read Paul Krugman’s Thursday piece on what was wrong economically with President Obama’s inaugural address.
One thing I would like to see Obama do is to correct people like Rep. John Boehner who claim that giving tax cuts is the fastest way to stimulate the economy.
Boehner’s claim might have some credence during normal times. However one of the key insights of Keynesian economics is exactly why tax cuts fail to stimulate the economy in times of deep recession or depression.
For any rational individual actor who is afraid of job loss, the best thing to do with a tax refund or cut is to save as much of it as possible. This may put lots of money into banks, but the banks are not lending right now. Why would a bank lend money to a company that might fail when the banks are teetering on the brink themselves? Why would a company invest in more capacity when their sales are shrinking?
So a large part of any tax cut will sit on the sidelines waiting for things to get better.
The only major actor who can take a chance on investing money at this time is the U.S. Federal Government. When other investors see the government putting money into some industries, then they will feel safer in investing money there, too. This will unlock some of the money that is sitting in cash reserve accoounts waiting to be invested.
I have heard that there are trillions of dollars sitting in semi-liquid assets waiting for the economy to turn.
Follow this link to an article by Steven M. Teles that offers another explanation of what I am trying to say.
If you want to stay involved in pressing for the political change you desire, you will be happy to know that the Obama presidential campaign web methods will continue to work for this change.
Follow this link to read some of Obama’s agenda as posted on www.whitehouse.gov. In particular, read the comments on hurricane Katrina.
I guess Obama felt a little constrained during his inaugural address given that George Bush was sitting right behind him.
The agenda uses phrases such as “broken promises” and “unconscionable ineptitude” to describe Bush.
Now that he is in office, Obama can tell us what he really thinks.
You want to make suggestions to Barack Obama? He has a web site called Citizen’s Briefing Book.
Share your ideas on any issue facing the new administration, then rate
or comment on other ideas. The best rated ideas will rise to the top
— and be gathered into a Citizen’s Briefing Book to be delivered to
President Obama after he is sworn in.
Economist Paul Krugman’s column of two days ago explains why Barack Obama needs to be very bold in his proposals to fix the economy.
To put it another way, if Obama proposes to do more than we find out that we need, he can always cancel some of his proposals. On the other hand, if we eventually find out that we need more than he has proposed, it may be too late to add these items by the time we find that we need them.
When it comes to having a few extra resources, I always believe it is better to have them and not need them than to need them and not have them.
In the military sphere, this would be equivalent to the Powell doctrine of having an overwhelming force to accomplish your mission.
My freshman advisor at MIT, the noted strobe photography expert Dr. Harold Edgerton, once said in a lecture, “If 5,000 volts is needed to fire this xenon flash lamp, then 10,000 volts will surely fire it.”
Follow this link to the Vanity Fair article of April 2008 that explains how the current situation in Gaza came to be.
As I posted the above link, I had just read the Huffington Post article that is derived from this one. That article is headlined Bush Plan Eliminated Obstacle to Gaza Assault.
After breakfast, I finished reading the Vanity Fair article. It never ceases to amaze me how one can confidently depend on the Bush administration to make things worse.
Now the question is, “Is it too late to reverse the ill affects of the last 8 years?” The first law of holes states that, “If you find yourself stuck in a hole, the first thing to do is stop digging.” Perhaps the new administration can start there.