02 June 2015

Gentle Ben

These endeavors began in March, 2009; one in tribute to Dr. Codd and the other to Dr. Keynes. Both had figured out how to understand important vectors of human endeavor (both of which have been central to my professional life), and both have been ignored and even denigrated for voicing their wisdom. What Santayana said, in it's many variations.

I wrote thus, on 22 March 2009, my first post:
Failure is not success. In the context of a Federal government stimulus program, success means there are more wage earners earning more than they did before the stimulus. Success is *not* simply a rise in GDP/GNP; we had that during the Bush years, and we find ourselves in a bit of a mess, since the most of that growth went to a small fraction of the population. It can be argued, and I certainly would, that the Bush approach to economics is a cause of the current mess, although the approach was not original with him; he didn't have one original thought.

Ben Bernanke has left his hidey hole, and, more or less, fesses up that I was right. He also asserts that it doesn't matter. He asserts that fiscal policy should be used. He elides the salient fact: Obambi was forced to put the burden on the Fed since the right wingnuts wouldn't allow significant fiscal policy to deal with the problem. That's the last thing they want. A full blown terminal depression is so 19th century.

From the article, not a Ben quote to be clear:
The stock market has soared, and investors have prospered, even as wage growth has stagnated. Kevin Warsh, a former Fed governor, has memorably described the Fed's current role as a "reverse Robin Hood", rewarding the rich at the expense of the poor.

As to unemployment: yes, the calculated number is very much lower. But... the labor force participation rate (the denominator used to make the percent) is down nearly 5 percentage points since 2000. And much of the jobs (here) are hamburger flippers and banksters. Not that we need more of either.

As a Keynesian, Ben cannot avoid the fact of demand driven growth. There isn't, and never has been, supply driven growth. Just look at the petro sector.

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