Re: The Politics of Recession

["John Gelles" <jjgelles@xxxxxxxx>]

    The credit and low interest requirements to contain
    any US recession, especially to keep unemployment
    at continuing record lows, may well be supplied by
    the Fed in a joint effort with Bush and Congress to
    spend enough on defense and other priorities,
    (including energy supply and environmental needs,)
    to justify Republican luck in the recent election.

    Alternatively, we will elect a Democratic Congress
    in 2002.

    The inflation rate that may accompany recession
    avoidance and control will be substantial -- say 5%
    even though anything less than hyperinflation is
    preferable to 10% unemployment.

    The idea of a federal capital budget can be
    revived  to make "deficits" attractive.  If Bush
    and his Texas team keep the Clinton prosperity
    alive with tax reduction and military spending
    (followed by other necessary public spending,)
    the Republicans will have become Democrats
    as quickly as Clinton's "pay off the debt"
    turned Democrats into Republicans.

    The economics of burst share price bubbles is
    being met by the politics of "don't let the decline
    of private paper wealth contract what fiscal
    boldness can expand -- and be sure to have
    the blame for any initial pain fall on the guys
    who made it happen".

    "President" Alan Greenspan is really to old
    to be remembered as just another frightened
    Paul Volker. If he does less than his duty now
    his glory vanishes as though he'd never been
    born.

        John Gelles