12 Sep 10
"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did." - Milton Friedman, 2003
With the credit crisis putting the final nail in the already smelly coffin of monetarism, what is the economic doctrine that will dominate Anglo-Saxon politics in the coming decade or two?
12 Sep 10
1 edit
Originally posted by KazetNagorraI think the American people have decided this. What they want is Big Brother to take control of every aspect of their lives and end an evil prosperous private industry. What we need is a system like Cuba's. Just ignore Castro's comments about how it has failed Cuba.
"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did." - Milton Friedman, 2003
With the credit crisis putting the final nail in the already smelly coffin of monetarism, what is the economic doctrine that will dominate Anglo-Saxon politics in the coming decade or two?
Of course, any "bad" things that then happen to America as it surrenders itself to Big Brother can directly be blamed on "W" and the previous effects of capitalism. All I can say is that they better get some more Republicans in there so they have people to blame for all the s***t that is going down now.
12 Sep 10
Originally posted by KazetNagorraI really don't know the answer to your question, but I do know one thing -- humans are inherently bad at creating stable systems because they 'fiddle'.
"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did." - Milton Friedman, 2003
With the credit crisis putting the final nail in the already smelly coffin of monetarism, what is the economic doctrine that will dominate Anglo-Saxon politics in the coming decade or two?
It happens like this -- say there is something like economic growth that we want to keep between 3-5%. As soon as it drops to 2.5%, humans think "we have to do something". So they turn the knob up -- and next thing you know, growth has jumped to 5.5%. Now it is too high. "We have to do something," says the crowd. So the knob is turned down, and growth drops to 1%.
So constant fiddling is virtually assured of creating a system which has VERY high variability and which is almost NEVER on-target. But keeping your hands off is something descendants of monkeys with opposable thumbs find very hard to do.
So I think the answer to the economic variability problem is to set the rules and then step back -- let the system run and stop fiddling with it! It would be politically hard to do, but we would be better off. I'm not sure if there is an economic school of thought that lines up with that view, but there it is.
12 Sep 10
Originally posted by spruce112358How would you set the rules, broadly speaking?
I really don't know the answer to your question, but I do know one thing -- humans are inherently bad at creating stable systems because they 'fiddle'.
It happens like this -- say there is something like economic growth that we want to keep between 3-5%. As soon as it drops to 2.5%, humans think "we have to do something". So they turn the knob up -- ...[text shortened]... if there is an economic school of thought that lines up with that view, but there it is.
12 Sep 10
Originally posted by spruce112358I think the Castro system is pretty predictable and stable. It goes something like this. You take everything from the populace and give them enough to survive on and pocket the rest. No prosperity, no growth, just a nice predictable pattern of existence. In fact, people are so happy they build life rafts so they can reach out and tell the rest of the world how great their system is.
I really don't know the answer to your question, but I do know one thing -- humans are inherently bad at creating stable systems because they 'fiddle'.
It happens like this -- say there is something like economic growth that we want to keep between 3-5%. As soon as it drops to 2.5%, humans think "we have to do something". So they turn the knob up -- ...[text shortened]... if there is an economic school of thought that lines up with that view, but there it is.
12 Sep 10
Originally posted by KazetNagorraIf there were a perfect system of rules we could follow humans would still muck it up. Don't you get it? There is no perfect system. ALL systems will fail because humans fail. All that you can ask for is to try and allow people the most freedom while they will inevitably destroy themselves. Get it?
How would you set the rules, broadly speaking?
12 Sep 10
Originally posted by KazetNagorraI am not sure the crisis specifically and principally kills monetarism. Its causes were complex and many, and so many aspects of the economic system could be criticized.
"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did." - Milton Friedman, 2003
With the credit crisis putting the final nail in the already smelly coffin of monetarism, what is the economic doctrine that will dominate Anglo-Saxon politics in the coming decade or two?
12 Sep 10
2 edits
Did the Great Depression change the monetary system? It is called the economic cycle. You can only abuse the system for so long before the floor drops out from under you. True, if you have a government to rob its citizens to prop up the system, you can abuse it even longer, but eventually you are going to have to pay the piper. After paying our dues, the cycle will run its course.
12 Sep 10
1 edit
Originally posted by KazetNagorraWhat do you mean? "Monetarism" is about monetary policy, not an overarching "economic doctrine" that encapsulates all aspects of economic policy.
"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did." - Milton Friedman, 2003
With the credit crisis putting the final nail in the already smelly coffin of monetarism, what is the economic doctrine that will dominate Anglo-Saxon politics in the coming decade or two?
12 Sep 10
Originally posted by KazetNagorraOk.
Perhaps I should have said "neoliberalism", but that would confuse the folks on this forum, perhaps.
Personally, I think a much more pragmatic and less dogmatic approach to economic policy seems to be the best bet. However, I don't underestimate the (unfortunate) power of maxims in political opinion so who knows...