Comments on: Thomas Palley: The Implications of Debt-Fueled Business Cycles

By: STS

STS — Sat, 09 Feb 2008 19:20:00 +0000

Trying to close the rogue anchor tag above. It points to a satirical Reagan Legacy project. Blogger has some bug in scanning html in posts.

By: STS

STS — Sat, 09 Feb 2008 19:15:00 +0000

Reagan's economic legacy hasn't really been properly evaluated, so "revisionism" would be the wrong label.

Certainly Reagan hagiography is working overtime.

So much so that it has attracted .

FDR didn't "cause" the Great Depression because it was in full swing before he took office. His efforts to fix it met with mixed success, but were initially perceived as spectacularly successful -- leading to his landslide reelection in 1936.

Reagan didn't "cause" the Soviet Union to implode. The gross ineffectiveness of central planning did them in economically, and Gorbachev's lack of brutal instincts forstalled a political crack down.

What links Reagan and FDR most is the fact that Reagan's reputation has been inflated precisely in order to kick FDR out of public memory so the New Deal can be eliminated. The high water mark of this campaign was the move to put "Reagan on the Dime." It was a pleasant surprise to find Nancy Reagan unwilling to help Ronnie's "friends" remove one of Reagan's heroes from our currency.

By: Anonymous

Anonymous — Sat, 09 Feb 2008 16:35:00 +0000

There seems to be a revisionist conspiracy afoot to negate the entire economic legacy of Ronald Reagan (Paul Krugman has also notoriously written in this vein). And yet Reagan's economic and foreign policies brought about the peace dividend that Clinton benefited from. If only Dubya and the drunken sailors in Congress had maintained the Clinton-era budget surpluses, we wouldn't be having this discussion. And if you really want to get revisionist, why not go all the way back and blame FDR for hugely expanding the role and size of the federal government and putting the whole lumbering entitlements machine in motion?

By: RK

RK — Sat, 09 Feb 2008 11:49:00 +0000

I saw an inteview with George Soros at the recent Davos summit, where he spoke about our being at the end of a credit “super cycle”. What he meant by that was the last gasp in a series of expansions, each of which are progressively more dependent than the prior one on the expansion of credit. In the past 20+ years, this ratio of the amount of credit creation needed to fuel the next expansion has increased nearly threefold. To quote Ben Stein’s dad Herb, “What cannot go on forever will eventually stop”. The only question is when.
It is easy to understand why the general public fails to connect the rising asset prices which form the collateral for their increased borrowings, with
the expansion of credit. The latter is much harder to observe in the aggregate, wheras the rise in values of land, houses and stocks is the stuff of daily headlines. It would take a simple “thought experiment” (what would happen to prices if everything was 100% cash on the spot, no credit)
to make things crystal clear.

By: John

John — Sat, 09 Feb 2008 11:10:00 +0000

Just looking at the history of the FFR. Greenspan only began to raise rates from one percent in July 2004.

Over the past few days I've read that monetary policy takes about six months to have an effect. So the "effective" rate at the time of the presidential election was STILL one percent, and had been for a year.

Do you think this is what got Bush re-elected?

But I thought the Central Bank was independent of politics.

Such lies, we are told. They never end.