Anticipating Ric Holt's call to get back to Keynesian thought
Dr. Curtiss Priest, an esteemed member of this list, forwarded
to the Cyberspace Society an economic response to Sept.11.
The response is called an assymetric response to terrorism.
Although naiive, in that no mechanism is proferred, it none-
the less asks for things much needed. The authors claim the
title of "capitalists" not "economists". That is a pity in a way.
Because what they ask of capitalism can only be had if
concious economic reform is legislated to support our
system -- reform of the type we are used to, that changes
markets with no rules into nations with civilizing laws and
AN ASSYMETRIC RESPONSE TO TERRORISM
The events of the past few weeks have been devastating to all Americans in
varying degrees and for various reasons. This devastation has caused
dramatic personal, professional, national and international emotions all of
which will have further consequence. Having watched, with our own eyes from
the roof of our offices, we have been changed forever.
Our condolences go out to the families, friends and loved ones of the
victims of this brutal act. We have been moved by the many emotions that
have been expressed by our friends, peers and colleagues. All of these
emotions are real and valid and some of each of the opinions as to where we
should go from here is correct.
We are a great nation, in freedoms and the inalienable belief in those
individuals of which we are made; we are the greatest the world has known.
As an industry, we have lost a lot in the past few weeks; from the countless
friends and colleagues with whom we can never again share a laugh, a smile
or a discussion. In addition, as an industry we now have a shaken belief in
what we 'offer' the country and world. How can we truly feel 'worthwhile'
and important solely on the basis of material wealth creation? Do we really
'add up' on the same calculator as the police and firemen who have given
their lives for us?
We have as much unbridled outrage at our assailants as anyone, but we are
professional capitalists and as such search for needs in the marketplace
that have not been addressed and look for ways to meet those market needs
while generating an economic return on investment.
We ask, as a capitalist;" why do they hate us?" and search for economic
means to end this senseless violence.
In an effort to generate earnings growth for investors, as a country, we
have continuously sought to expand into new markets. We have opened
McDonalds restaurants and Nike manufacturing plants throughout the
'lesser-developed' world. This has had the effect of highlighting the
differences in wealth between the economic classes of those countries. Those
who work in the restaurants or make the sneakers cannot likely afford the
fruits of their labor.
Capitalism should have sought to increase the wealth of the workers in those
restaurants as a means to increase the restaurants customer base. These
shortcomings have created further disdain for the United States because we
have become the symbol of economic development and a constant reminder of
the economic stagnation of most of the 'lesser-developed' world.
Economic reality dictates that as a country we are likely on the path
toward deficit spending. We are spending to rebuild New York and
Washington, to save our air travel industries, to support the well being of
those tragically touched by these attacks and to begin a military deployment
in an effort to root out those cowardly villains.
Although most of these monies that our government is borrowing
and spending will provide tangible social and economic returns
some may not.
The military-industrial complex has often been called upon to pull
countries out of recession by creating governmentally funded jobs
for the procurement of tools to fight wars. We may be able to
stimulate the creation of domestic jobs by ramping up our military
spending but that likely will not provide sustainable economic returns, may
not create new and stable markets for US exports and could present a real
'reinvestment risk' problem as we would ultimately be confronted with
questions of where to re-employ those workers after the military conflict
Over the past few decades we have been witness to American jobs
leaving our country, driven by an effort to reduce expenses, and
watched the growth rates of American exports decline. This has
occurred at the same time as we have made astounding
technological and broad productivity gains.
As capitalists we [should] ask; "is there a long term economic return to be
made by making 'them' [the world out there and the poor right here] better
appreciate us?" The answer is clearly yes. As capitalists we believe that
the United States could serve itself and it's citizens well by considering
economic weapons to solve these terrorist issues. If we launched a new
Marshall Plan by spending our monies to increase the agricultural,
industrial and economic bases of the citizens (not the governments) of the
Middle East and other similarly unstable third world countries, we could
create sustainable American jobs and new sustainable end-markets for the
goods we produce.
A new Marshall Plan could reduce American unemployment rates at the same
time as it increases the ability of citizens in those lesser-developed'
markets to generate the income required to purchase goods manufactured by US
companies. Building products, irrigation equipment, power generation
technology, construction equipment, timber products, waste-water treatment
technologies, communications technology and infrastructure, aero-space
engineering, and professional services are all industries in which we have
global dominance but now suffer from economic sluggishness.
If our government chose to support our businesses by procuring goods and
services from these industries, as opposed to restarting the military
machine, we could support domestic price stability, increase employment
rates, further international democracy and advance a more pure form of
At the same time we would be diminishing the grievances that
radicals in those lesser-developed' countries could lodge
against the U.S.
Our economic successes have always been commingled with our social
The first Marshall Plan demonstrated the virtues of teaching an
impoverished people to fish and proved that they would buy our
fishing gear and would compete with us thus guaranteeing that all
of humanity would become more efficient fishermen. Rarely does
radicalism find support among the well clothed, well fed or
As capitalists we can be every bit as valuable to humanity as firemen,
teachers, doctors and police. Perhaps it is time to pay our respects to our
fallen brethren and focus more fully on the good business practices of
sustaining life, liberty and the pursuits of individuals everywhere.
Joshua Rosner, Vincent Daniel, Michael Corasaniti
Graham Fisher & Co., Inc.
Graham Fisher & Co. is an independent institutional equity research
boutique with no conflicts of interest. We seek to be a balanced,
objective and disciplined firm.
----- Original Message -----
From: Ric Holt <rholt@xxxxxxx>
Sent: Tuesday, October 02, 2001 1:38 PM
Subject: We need to get back to Keynesian Economics
Over the last few weeks it has been appropriate for us to discuss the
politics of the terrible event that occurred on Sept. 11th. But this is not
a political list; we are a list that focuses on Post Keynesian economics. So
let's focus more on economic issues and less on politics. I know,
particularly for Post Keynesians, there is a political part to economics.
But let's focus more on the economics.
editor of pkt