In the rush to come up with a plan of spending cuts and tax hikes, both democrats and republicans have missed the essential detail that makes our current economic circumstances different from any we have previously experienced since World War II–it’s a trap. A liquidity trap, that is, and it’s going to make any spending cuts and tax hikes the US government enacts mean serious pain for millions of people.
Tag: politics
Misconceptions: “America is Like Greece”
The other day I found myself in conversation with one of my fellow students about whether or not the British government had too large of budget cuts too soon in the economic recovery. I argued that it was fairly self-evident that it had done so, considering the superior economic performance of most nations that had refrained from issuing cuts or embarked on a policy of stimulus. The response he gave me was an interesting one–he argued that the advantages being enjoyed by the stimulus countries were short term, and advised me to look at France, a country that had refrained from austerity and has recently had its credit rating reduced by Moody’s, is seeing stagnant growth rates, and has a host of other problems. I responded that Eurozone countries were in a different kind of economic crisis from countries like Britain and America, and that different rules applied–this was met with scepticism, as if I were trying to weasel my way out of the point. So today I would like to make the broad argument that the economic problems being experienced in non-Euro countries like America, Britain, Japan, and Canada are of a fundamentally different nature from the kind being experienced in France, Spain, Portugal, and Greece. So different, in fact, that comparing the former to the latter is intellectually useless.
Groupthink: How Democracy Maintains Evil and Injustice
This morning an entirely new line of attack on democracy occurred to me, and I feel an intense pressure to share it with all my readers. In the past, I have argued that democracy has a tendency to result in the political preferences of the median voter being realised. There is, however, a related implication that did not occur to me at the time of writing and which has such spectacular implications so as to deserve a post unto itself for explication.
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The State’s Role in Investment and Innovation
It is often said that the state spends money inefficiently–or at least, less efficiently than the private sector spends it. The old Hamiltonian argument, in favour of the state as an investor, an engine of growth, technological development, and innovation, often falls on deaf ears as the opposition points to Solyndra, the “crony capitalism” of investment centred states like France or Japan, and so on down the line. Today, I would like to challenge this dismissal for being much too flippant and much too anti-historical.
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The Foreign Policy Borg
One of the most common criticisms of Obama from the left is that his foreign policy is not discernibly all that different from that of late period George W. Bush–Guantanamo was never closed, Obama employed a surge strategy in Afghanistan, drone attacks were used, troop numbers continued to decline in Iraq, it all felt, and perhaps it all feels, as though nothing has changed. At the same time, many on the left like to argue that, were Kerry or Gore elected, things would have been quite different, that Bush was discernibly distinct from Clinton. The historical record shows this to be false–Bush’s foreign policy amounted to a mere evolution of Clinton’s military interventionism and embrace of the democratic peace theory, the notion that democracies promote peace and prosperity and that, consequently, democracy should be spread to foreign lands. It’s not as if the interventions in Somalia and Yugoslavia during the nineties were motived in any way significantly differently from the reasoning eventually supplied for the occupation of Iraq–spreading freedom, ending tyranny, and so on down the line. Of course, when these people were running for office, they talked a different game. They tried to draw distinction from their predecessors and purported to offer a serious foreign policy alternative–Mitt Romney as we recall attempted this very line of argument. So why is it that our presidents get assimilated into the foreign policy borg and adopt policies that are, for the most part, quite similar to those adopted by their predecessors? That’s today’s topic of investigation.
Benjamin Studebaker 