(12-07-2016, 03:08 PM)Galen Wrote: [ -> ] (12-07-2016, 02:36 PM)taramarie Wrote: [ -> ] (12-07-2016, 03:58 AM)Galen Wrote: [ -> ] (12-06-2016, 02:34 PM)taramarie Wrote: [ -> ] (12-06-2016, 10:32 AM)pbrower2a Wrote: [ -> ]The regulatory burden exists because the free market does nothing to prevent such deeds as toxic dumping, adulteration of foodstuffs, dishonesty in disclosure of financial statements, inducing workers to do unpaid overtime off the clock, asking female employees from offering themselves as fringe benefits to male bosses... Regulation exists because human nature is flawed, and because abuses in the past have obliged government responsible to the People to control those who wield economic power.
If Humanity were invariably good then we would need no regulation -- or police, courts of law, or prisons.
Bingo. That is why I support it. I care about the planet.
You really have no idea how insane its getting here in the US and the bureaucrats get pretty arbitrary.
I am for regulation that works. Not too much, not too little. Keep it workable and simple.
Look up Robert Higgs and his work on regime uncertainty. It will not only help you understand the present but also why the Great Depression lasted as long as it did.
The article.
My critique:
Start with the severity of the three-year economic meltdown beginning in the autumn of 1929. Going into it, economic inequality was severe by any standard until the Double-Zero Decade, which itself culminated in an economic meltdown that for a year and a half was similarly severe.
I saw the chart showing the connection between gross private investment* (note: not a standard measure in economics!) and GDP. Because the axes are not proportional, I note that gross private investment dipped to roughly one fifth of its 1929 value that in 1932 while GDP fell by about a third. It's arguable that economic production beyond that necessary for bare survival practically disappeared within three years.
It's easy to see why people who might otherwise have invested did not do so. Seeing nothing but economic decline, seeing business failure upon business failure, and perhaps seeing better opportunity to pick up productive assets at fire-sale prices than to make expensive investments ion new plant and equipment, investors could wait and see how bad things would get.
For that one cannot blame the New Deal, as it had yet to take place. People had even bigger things to fear, like a Socialist insurrection or a fascist takeover (neither of which materialized)**. The interpretation of the Great Depression as a uniformly-bad time is undue. I see the graph and notice that by 1937 GDP is roughly back to where it was in 1929 and was ahead of where it had been in 1929 by 1939. The time from 1933 to 1939 was a growth-based recovery. America could not get back to a line of growth as one might have seen it in the late 1920s.
Note that I observe from my encounters with people who lived through both the late 1920s and late 1930s: that few people wanted a return to the economic conditions of the late 1920s by about 1936. By 1936 the speculative boom of the 1920s got blamed for the recent hard times. By the late 1930s Americans had more consumer goods, clearly indicating that things were better in the late 1930s than in the supposed halcyon days of the late 1920s.
Of course the people who told me this (they are practically all gone now -- but I paid attention to my elders when I was a kid because I thought that I might hear something worth learning) were such people as farmers, factory workers, schoolteachers, and the like -- and not the 'economic royalists' who may have never recovered from the Market Crash. For most people putting food on the table, maybe having a car, refrigerator, modern stove, or a radio for the first time mattered far more than that some 'right people' got what they wanted first. In the current decade, the 'economic royalists' got what they wanted first and have ensured no material progress for others. That's the difference between having the economic royalists in charge of Congress with the aid of their obedient stooges in most of this decade and having politicians who really paid attention to the common man in the 1930s.
The consequence of a financial panic is the recognition of the loss of wealth after a corrupt boom devoured it. Wasted investments, as in the middle-to-late 1920s and the middle-to-late Double-Zero Decade, don't get recovered. The escape from a severe recession or an outright depression is growth from the low point of the economic downturn, and not a swift return to the economic appearance of the alleged good times before the meltdown.
I notice the graph of 'gross private investment' tracking the GDP rather closely, except during World War II. It may be a quibble to decide whether American expenditures in World War II were enhanced consumption that went to supplying soldiers in the battlefields of land, air, and sea or an investment in keeping American assets from becoming property of fascist war criminals and American labor from becoming serfs and slaves... you may interpret such at your choice. But defeating the Third Reich and Thug Japan was clearly the right thing to do, and if it meant that Americans could not fully participate in a consumer society, then so be it. We would get to enjoy far greater prosperity after WWII than after the pale recovery of the late 1930s.
For me to predict what follows when the Economic Royalists, of which Donald Trump is the most blatant example, have complete control over American political life is likely to express my fears (the gain and mass sacrifices will go into conspicuous spending redolent of oil sheikhs that does not trickle down) or your hope (that the gain and mass sacrifices will go into conspicuous spending redolent of oil sheikhs that no patriotic American can complain about for not trickling down). Of course I expect four of the dreariest and potentially most dangerous years in American history with no precedent since the Civil War.
I can come up with some quotes on how a grossly-unjust America will work. I need not cite Karl Marx. Abraham Lincoln in his excoriation of slavery will be far more apt for my purposes.
Uncertainty goes with the territory of any investor. Mass consumption, and not elite indulgence, drives the economy.
*What is so bad about public investment except for its unreliability? Just think of the tax-funded Interstate Highway System which may have kept the American economy humming along. Its building devoured huge amounts of industrial production in steel, asphalt, and concrete. Once segments were completed the freeway system, at least in rural areas, made possible a significant private investment in roadside services as motels, automobile service stations, and restaurants. The unreliability is boom-and-bust, which is the norm for investment of any kind.
It was certainly better than the private investment in the real-estate scams of the Double-Zero Decade.
**Saving the system from a catastrophic overthrow of the social order is a good idea. The best way to save what is good in a social order is to reform the rest.
![[Image: Superfund_sites.svg]](https://upload.wikimedia.org/wikipedia/commons/9/91/Superfund_sites.svg)
