From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Mar 13 2005 - 16:45:35 EST
David L wrote: > > Second, OPE folks need to be clear: this is an attempt at >*immanent critique* of mainstream macroeconomics -- to get under >their skin, in their own terms, and upset the dogma of policy >ineffectiveness -- the main conclusion of the free-market hegemony. What dogma of policy ineffectiveness? Isn't Bush claiming that his policy of tax cuts has been massively effective in saving the economy from the recession that the coupling of the NASDAQ crash and the attacks of 9-11 would have otherwise caused? I would think the questions presently are the two following: 1) Why has a policy of budget deficits via tax cuts and military spending, coupled with loose monetary policy, been so little effective in raising real wage rates and in reducing unemployment? Is the answer globalization? Or is the answer in the structure of government spending? Or both? Or something else? 2) What has allowed Bush to run a stimulative policy with so little impact on long term interest rates and without hitherto an uncontrolled crash of the dollar? Perhaps this dogma of policy ineffectiveness manifests itself in Bush's unwillingness to run up deficits as large in relationship to GDP as did Reagan? But I am not quite sure what the dogmas are at present. Yours, Rakesh
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