tag:blogger.com,1999:blog-2098432983500045934.post1853116038878295856..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: What does one have to do?The Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2098432983500045934.post-2195829361103783222012-07-15T21:35:04.756-04:002012-07-15T21:35:04.756-04:00In regards to your point that financial investment...In regards to your point that financial investment being more appealing than productive investment (which is no longer so true) I would say we are better off.<br /><br />It took many long decades for the Ponzi scheme of chasing after capital gains to go bust. You can't expect that to turn around in a day. The economy could be a lot worse.jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-59646776208223675262012-07-15T11:39:40.730-04:002012-07-15T11:39:40.730-04:00"I still say policy matters, and it's bec..."I still say policy matters, and it's because of policy changes - starting with Carter, then going on steroids under Reagan - that the finance sector grew in the way that it did. Replay the 1920's."<br /><br />Sure. But policy does not change by accident. Policy moves in a direction that is thought to provide some necessary response. It was thought necessary to enhance finance -- at least twice, as you point out -- because both times financial costs had already been hindering economic growth. But policymakers refuse to recognize that financial costs create problems. So they thought boosting finance would boost growth.<br /><br />The more effective alternative would have been more in line with the policies you are always calling for.<br /><br />You don't read me carefully enough on wealth disparity.<br /><br />Good to see you.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-48888914648364979042012-07-15T09:38:45.181-04:002012-07-15T09:38:45.181-04:00I still say policy matters, and it's because o...I still say policy matters, and it's because of policy changes - starting with Carter, then going on steroids under Reagan - that the finance sector grew in the way that it did. Replay the 1920's.<br /><br />And I think you have tunnel vision - especially regarding wealth disparity. It links up with the growth of finance in an impressive fashion. They are of a piece.<br /><br />I guess to Jim's point, reversing, frex, debt/dollar, and deleveraging has not pointed toward meaningful recovery.<br /><br />The metrics have changed, but the policy hasn't.<br /><br />That, alas, may take blood in the streets.<br /><br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-8274811909462217012012-07-15T08:39:27.106-04:002012-07-15T08:39:27.106-04:00Hi Jim. Well, sure. But breaking the economy is no...Hi Jim. Well, sure. But breaking the economy is not the correct solution. You're not saying the economy was better after 2008 than they were before 2008, are you?<br /><br />My observation is that <i>financial cost hinders growth</i>, and we need to stop the relative growth of finance soon enough that it doesn't destroy the economy. Everyone who praises the "flat trend" on the Debt/GDP graphs is saying the same thing. I'm just laying it out more thoroughly.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-70324098382131947662012-07-15T07:55:03.907-04:002012-07-15T07:55:03.907-04:00Hi Art,
You wrote:
"The problem is the incr...Hi Art,<br /> You wrote:<br />"The problem is the increasing cost of finance, due to the growth of finance. Financial cost hinders the growth of the productive sector, making financial investment more appealing that productive investment. And that only makes the problem worse."<br /><br />This is true, until it isn't.<br /><br />All the evidence says it became no longer true in 2008.<br /><br />Even the debt/dollar graph that you favor tells that story.jimnoreply@blogger.com