RadioRaheem84
7th April 2010, 17:51
Minsky noted the natural tendency of the free market to swing, and had incorporated that into his model. I still fail to see why you would characterize - if that is what you're doing - the recent sub-prime bubble as being the tail end of a three decade swing. Bubbles come and bubbles go, and not all of them burst, or I should say - more importantly - they can be avoided by timely action.
You certainly inject a lot of complex back-room machinations into your theories. "Downgrading the state-run economy" or more simply put... deregulation of industries... promotes profits and boosts the economy. There is nothing complex or nefarious about it. Certainly the US might have tried to withstand 'globalization' for a while, maybe even a little better than most other nations, but it could never stop globalization and free trade. And let's face it, with its strong historic endorsement of individual rights and freedom, it would be hypocrisy for the US to reject free trade.
Your treaty of Detroit ramblings and talk of 'breaking the deal' with union workers... well, maybe some politicians had deals (apparently still do!), but industries were suffering under the incredibly bad contracts they had been strong-armed into by both unions and government. I work in an industry where the union "waterboys" (actual title and job description - they fill 5 gallon coolers with water and ice, as needed) are making close to $40 per hour plus generous benefits. Auto workers do substantially better.
But I digress, if there is going to be free trade - and there is - then these same workers will have to either compete with others in the world marketplace, or begin gravitating towards newer, more lucrative paying jobs. No conspiracies, just change. Also, if you're trying to make an argument that these displaced, wage-hammered workers are now forced into speculation "to make up for the falling purchasing power" you are clearly mis-reading (or misrepresenting) their options. The idea of keeping their previously (artificially) inflated salaries by force of government or unions only delays the inevitable. They have to educate themselves and move on to better jobs.
Bubbles are created by bad judgement, and judgement is greatly influenced and can be easily degraded when artificial incentives are introduced that 'are too good to be true'. It doesn't matter what segment of the market such an incentive is offered - look at the dot.com bust a few years back. When bankers and investors ignore the established standards of good business practice that have helped them avoid calamities, a new bubble can grow. The mini-crises and bubble burst before this - regulation AND deregulation both played roles in some , like the S&L crisis. In others, like the Dot.com bust, just bad judgement. We not only do not have to regulate every facet of business, we have to carefully avoid over-regulating business. You can't legislate good sense.
Bubbles created by "bad judgment", "good business practices"?
No collective bargaining according to him, wages were just artificially high?
There was no conscious effort by policymakers and industrialists to scale back the previous economic policies of the 'golden age'? It was just "change", natural "change"? Anything to the contrary is just conspiracy talk?
You certainly inject a lot of complex back-room machinations into your theories. "Downgrading the state-run economy" or more simply put... deregulation of industries... promotes profits and boosts the economy. There is nothing complex or nefarious about it. Certainly the US might have tried to withstand 'globalization' for a while, maybe even a little better than most other nations, but it could never stop globalization and free trade. And let's face it, with its strong historic endorsement of individual rights and freedom, it would be hypocrisy for the US to reject free trade.
Your treaty of Detroit ramblings and talk of 'breaking the deal' with union workers... well, maybe some politicians had deals (apparently still do!), but industries were suffering under the incredibly bad contracts they had been strong-armed into by both unions and government. I work in an industry where the union "waterboys" (actual title and job description - they fill 5 gallon coolers with water and ice, as needed) are making close to $40 per hour plus generous benefits. Auto workers do substantially better.
But I digress, if there is going to be free trade - and there is - then these same workers will have to either compete with others in the world marketplace, or begin gravitating towards newer, more lucrative paying jobs. No conspiracies, just change. Also, if you're trying to make an argument that these displaced, wage-hammered workers are now forced into speculation "to make up for the falling purchasing power" you are clearly mis-reading (or misrepresenting) their options. The idea of keeping their previously (artificially) inflated salaries by force of government or unions only delays the inevitable. They have to educate themselves and move on to better jobs.
Bubbles are created by bad judgement, and judgement is greatly influenced and can be easily degraded when artificial incentives are introduced that 'are too good to be true'. It doesn't matter what segment of the market such an incentive is offered - look at the dot.com bust a few years back. When bankers and investors ignore the established standards of good business practice that have helped them avoid calamities, a new bubble can grow. The mini-crises and bubble burst before this - regulation AND deregulation both played roles in some , like the S&L crisis. In others, like the Dot.com bust, just bad judgement. We not only do not have to regulate every facet of business, we have to carefully avoid over-regulating business. You can't legislate good sense.
Bubbles created by "bad judgment", "good business practices"?
No collective bargaining according to him, wages were just artificially high?
There was no conscious effort by policymakers and industrialists to scale back the previous economic policies of the 'golden age'? It was just "change", natural "change"? Anything to the contrary is just conspiracy talk?