[quote=EconProf]
You are kind of making my point here, SK. The lack of consumer demand your clients cite is because of a lack of jobs, no confidence by consumers and businesses in the future, and a fear that the failed policies of the past few years will merely be increased..[/quote]
The first part I have no problem with. The bolded part is pure speculation without evidence. There’s no evidence that consumers aren’t spending because of fear of failed policies. They’re not spending because they have no money! So no, i’m not making your point at all.
[quote=EconProf]
The very “stimulus” programs that have indeed pumped money into the economy–in great part to failed programs and wasteful bailouts–have cast a dark cloud over investors and consumers. [/quote]
Failed? I don’t think so. Less successful than hoped for? absolutely. Badly conceived and poorly executed? Yep. But not failed.
[quote=EconProf]
The Keynesian multiplier that arguably worked somewhat during the Depression is now nearly nonexistent. But the negative incentive and confidence effects of this “stimulus” are very real and offset any multiplier benefits.
BTW, Republicans can be just as guilty of an over-reliance on Keynesian economics as Democrats.[/quote]
If Republicans were even considering Keynes, they would have raised taxes in 2004. Keynesian theory has never had any influence among Republicans in at least 30 years. I’m not sure that there’s been much on the Democratic side either. There’s talk. But no action.
[quote=EconProf]
The regulatory burden of Sarbanes-Oxley was passed, I believe, during the Bush presidency, and we know much of the stimulus was begun in his last months in office before being continued and greatly increased under Obama. [/quote]
Perfect example of what I said earlier. Business complains about burdens presented by SOX compliance. And they deal with it. Hasn’t put companies out of business. In fact a whole new industry has grown up around it.
And no, we ddon’t know that any stimulus was passed during the Bush presidency. TARP was passed in his last few months in office. That wasn’t a stimulus. It was a crisis averting injection of capital into the system.
[quote=EconProf]
As to the “mistake” of FDR that led to a second phase of the Great Depression, perhaps you are referring to his attempt to “pack” the Supreme Court by boosting its membership so as to make it more compliant with his more extreme proposals, which by then were getting quite alarming to the general public. In fact, his business bashing did a lot to sap employment throughout the 1930s, and even Keynes advised FDR and his Treasury Secretary to ease up on the rhetoric if the US wanted to see a recovery. As Keynes put it, you need to preserve “animal spirits” in order to keep capitalism going.[/quote]
No, his packing of the supreme court, while ballsy, wasn’t the mistake I was referring to. It was his (non-Keynesian) reduction in government spending which lead to a halt of the advances of the previous 7 years. A recession within the depresssion. As soon as government spending resumed, so did economic growth. An identical similar concern exists now.
