Re: [Pen-l] John Judis in the New Republic on Obama's choice for the CEA

[Dan Zale <danzale2000@xxxxxxxxx>]

Judis has another piece that looks at a few of the latter items in the list below. 
 
Debt Man Walking
December 03, 2008
http://www.tnr.com/politics/story.html?id=16872fed-798c-476b-a6c4-303923cd6388

 

The reason I find this piece interesting is that it addresses the question "where will consumption demand come from in the future"?  

---------------------------------------------

John Judis:

The history since then has been considerably more complicated than
Romer makes out. Kennedy's economic policies were by no means
unsuccessful. Unemployment fell from seven percent when Kennedy took
office to 4.8 percent in November 1964 without provoking a rise in
prices. What took place afterwards were disasters--most of which Romer
does not mention, but which made Kennedy's brand of aggressive
Keynesianism more difficult to pull off: the Vietnam War (along with
Johnson's reluctance to finance it through tax increases); the growing
competitiveness of foreign producers that threatened, and finally
undercut, America's trade surplus; the huge spike in international oil
prices (which Romer discounts as a major cause of inflation); the
collapse of Bretton Woods; and the peculiar arrangement that the U.S.
created with Japan and later China that allows them to run budget and
trade deficits without raising interest rates.

>> Right. <<

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