Re: Lynn Turgeon's report of the AEA discussion of Feldstein, et al.

[Doug Henwood <dhenwood@xxxxxxxxx>]

The bond market, aside from being the place where, in Tom Wolfe's words,
educated white men bay for money (there are a few nonwhite nonmen in the
pits and in the trading rooms, but not many of 'em), is an instrument of
class power. The bigger your debts, the more you have to listen to them -
an ironic result of vulgar Keynesian policies, after all, that increase
debt without neutralizing the social power of the rentiers. Subduing the
bond market would be a lot more revolutionary than it may sound.

Doug

Doug Henwood [dhenwood@xxxxxxxxx]
Left Business Observer
212-874-4020


On Mon, 10 Jan 1994 MMEEROPO@xxxxxxxxxxx wrote:

> I was in a "discussion" with Ed Deak, head of the dept at Fairfield U., right
> after the meetings and he argued that the only way to convince the bond market
> to let the long rate continue to fall was to RAISE the short rate.  My
> response was that this is an abominable state of affairs where the Clinton
> Administration is totally hostage to the Bond Market.  I think we on the left
> need to begin making as much noise as we can (there aren't many of us but we
> can try...) about how outrageous this situation is.  Democratic control of
> monetary policy and a little "reflation" should cure the bond market of their
> arrogance .... (but such a government policy would need to be forthright and
> very politically up front about what was going on and why ... fat chance!) --