Predictably, a couple of the left's leading apologists for an agenda involving virtually endless quantities of government spending accommodated by massive money-printing launched into full-throated attack mode in response to David Stockman's opinion piece. Chief among them is far-left economist and pundit Paul Krugman, who recently offered this little jewel of a thought:
1-minute 37-second YouTube Video
(Yeah, that'll fix everything!)
Note the reaction from Harvard economist Ken Rogoff. He can't quite believe what he just heard!
Stockman is spot on. None of the myriad structural problems our economy faces are being meaningfully addressed. Everything is being papered over and covered up.
But if you think Stockman is some sort of blind partisan or apologist for the Republican Party agenda, think again:
http://www.eccie.net/showthread.php?t=576357&highlight=
http://www.nytimes.com/2012/08/14/op...=1&ref=opinion
Markets need real price signals in order to function in a healthy fashion. Policymakers should have learned something from our experiences with price controls in the 1930s and 1970s. Although you may succeed in making things look a little better in the short run with massive fiscal and monetary interventions, you do so only at great long-term cost.
Robert Scheer, who is far to the left on the political spectrum and writes for
The Nation, has a slightly different take from Krugman:
http://www.thenation.com/article/173...recked-economy#
One of Scheer's key points is that the policy agenda has exacerbated income and wealth inequality in the U.S. He bemoans the fact that while Stockman is treated by many as something of a pariah, a few of those most responsible for the failures are still lauded in "polite circles."
Going a bit further, this form of financial repression hurts the non-affluent in two additional and distinct ways:
1) Artificially low interest rates (well below the rate of inflation) hurt the finances of millions of savers and non-affluent retirees who traditionally earned better returns on CDs and bonds of various maturities. The result is the transfer of a great deal of wealth to the banking system, largely from people who are not very well off.
2) Over the last few years, rates near zero and continual QE have created a big run-up in oil and agricultural commodity prices, placing further stress on the budgets of the middle class and the working poor.
A sad irony here is that monetary policy interventions deemed necessary to accommodate our current budget deficits, which are themselves largely created by programs promising to assist the non-affluent, do great harm to many households the programs are supposed to benefit.
