Re: Article from The Guardian newspaper

[Stephen Block <stephenb@xxxxxxxx>]

Title: Re: Article from The Guardian newspaper

> Would selectively raising taxes not have been a more delicate, and more effective, instrument, if anything was to be raised?

> At 08:54 PM 9/6/2002 -0400, you wrote:
>
> > The Dow is now some 25-30% above Greenspan's "irrational-exuberance" level -
> > when a "rational" monetary policy response would have been to "calm the
> > nerves of financial market participants" by taking away the punch bowl.
> >
> > It strikes me as self-evident that Keynes, as life-long opponent of monetary
> > inflation, would NOT agree that the cure for the hangover is to "flood the
> > system" with more of what made it sick in the first place.
>
>
> The solution for a boom is not a higher rate of interest but a lower rate of interest [See Keynes, GT]
>
> Flooding the market with liquidity after September 11, did not cause any inflation.  You have to get off the quantity theory of money kick .
>
> Paul
> Paul Davidson
> Editor, Journal of Post Keynesian Economics
> 503 SMC
> University of Tennessee
> Knoxville, Tn 379996-0550
> phone Number: (865) 974-4221
> fax number: (865) 974-1686
> http://econ.bus.utk.edu/davidsonextra/Davidson.html