It is funny how one discussion with D about Mr O and his economic policy lead to someone writing about the same thing the next day. I wonder if our skype conversation is tapped.
http://www.minyanville.com/articles/deflation-japan-lost-decade-keynesian-bernanke-spending-minyanville/index/a/25229/from/yahoo
I can't put it such eloquent words nor do I read enough economic books to reference these authors mentioned in the article. But I can say that my thought of the impact of the "stimulus" plan is from just a simple connection of cause and effect. Understanding the multiple degree of separation with the "player" of economy along with the social dynamic of people with their basic need for comfort (safety). At lot of what I've said are mentioned in the article. But what I did not put together is how deflation of an economy. I wonder if the collapse of the banks is just a deflation of the economy. A clean house like or even just the true evaluation of true wealth of people. I wonder what the Keynesian theorist are wondering now. I am not to favor one economic theory versus the other. I just think it is a chemical mixture, that both can be false and both can be true. Like the positive or negative electrons. It works on when you infuse both the negative and positive. Otherwise too much on one side lead that element to break down.
But what is the solution? Well it will take a lot. But the first step right now is to fix the indicators that we are using to report the wrong information to people. Yet we continue to use it to drive our decisions. I am talking about the out dated economic indicators that we use. Since many adopted in 1930's a lot has change. The core economic drivers of the US and the world are very different today versus 10 or even 50 years ago. Not to mention also the social economic behavior of people. Indicators is just a way to show how people will behave to money. So in my opinion how we behave with money changed a long time ago. So for example the methodology which is use to capture inflation, ever wonder what gets' factor into that number and what doesn't? Imagine if it did factor food and energy. Although I know those are high fluctuations, but wouldn't it paint a more accurate picture of what is rising or falling. Imagine if these reports gets a face lift. The impact (negative and positive) will cause mutual funds, banks, government, and you can continue to name to change their "WORK". This chain reaction will have high impact on what we are really dealing with and maybe we can start focus on the real problems. So that "WORK" is monsterous. These are what returns the fund actually produce, interest rate policies, monetary supplies, adjustment to social security, and the list just continue on and on. Larger than most people could understand it or be able to recognize until it gets worked into the economy, but having correct numbers scare the crap out of the government, banks, and the most wealthy. Oh well I can only hope. The truth the matter is, there are a lot of people who benefit from not having the right measures. So we will see. I wonder if this thought I have just written down will emerge someday in political and economic discussion. But for now, another article (mean) to justify my past conclusion (end).
Monday, November 2, 2009
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