Re: Automatic Stabilizers

[ACSLKS@xxxxxxxxxxxxxxxx id <01HMW97N63MO8Y6PJE@xxxxxxxxxxxxxxxx>; Fri, 10 Feb 1995 19:44:41 -0400 (EDT)]

> On Fri, 10 Feb 1995 12:53:02 -0700 <ACSLKS@xxxxxxxxxxxxxxxx> said:
> >There has not been much discussion and/or research done on the economy's
> >automatic stabilizers for a long time.  With all this flurry over reducing
> >taxes and transfers, would this not increase the severity of future
> >recessions??  Never heard this discussed on C-SPAN.
> >
> This is a major issues. As politics seem to be returning to the
> style of the 1920s (if not the 19th century), the automatic
> stabilizers are probably doing so also. The lack of automatic
> stabilization was one structural cause (perhaps minor) in the
> origins of the 1930s.
>
> However, what Wallace Peterson terms "the silent depression"
> may not intensify (who can predict?)  Instead, we might see
> more severe recessions (and steeper booms), as Lonnie suggests.
> The resultant insecurity
> might keep wages down and promote profitability, a major
> goal that both Republicans and Democrats seem to be pursuing
> (outside of the realm of rhetoric).
>
>
> sincerely,
>
> Jim Devine
> jndf@xxxxxxxxxxxxxx or jdevine@xxxxxxxxxxxxxxx
> Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA
> 310/338-2948 (daytime, during workweek); FAX: 310/338-1950
> "One knows so much and comprehends so little." -- Einstein

Maybe not so much profitability as the ability to engage in predatory behavior
(price or otherwise) because of a lower wage bill.  Should one observe a
changing "gap" between wages and profits over the cycle, in recent years?

Lonnie K. Stevans