Re: Monday's WSJ Front Page and pg 15-triumph of the GT?

["Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>]

Re. the following:

> So there we have it-the WSJ, the FED and the IMF warning us against the
> dangers of deflation and frank admissions that falling prices don't bring
> the economy back to full employment. It's as if I woke up on some bizarre
> parallel universe where the WSJ excoriates Bush and the FED and the IMF
take
> the GT seriously. There's got to be a catch somewhere.

Comment:

A deflationary threat in a world awash in liquidity should signal to the FED
and IMF that, through their somnolent watch over the world financial system
in the post-Bretton Woods era, they have sown the seeds of Japan-style
STRUCTURAL problems in the Global Economy.

Gunnar




----- Original Message -----
From: "Clifford Poirot" <cpoirot@xxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Tuesday, May 20, 2003 10:36 AM
Subject: Monday's WSJ Front Page and pg 15-triumph of the GT?


> The front page and page 15 of Monday's WSJ are well worth a look and of
some
> considerable interest to Post-Keynesians. Here is a brief synopsis:
>
> "Caution: Tax Cuts Are Bigger Than They Appear in Budget" : While there is
> some disagreement on this list over the desirability of tax cuts and
> deficits, I don't think anybody on this list would approve of Bush's long
> held strategy of using mirrors and gimmicks to redefine the size of the
tax
> cuts. This article pretty much directly accuses Bush of lying and
hypocrisy.
>
> "Newly Defined "strong dollar" Signals U.S. Shift": Now this one made me
> almost burst out into raucous laughter and roll on my office floor-a
"strong
> dollar" policy is no defined by Treasury Secretary John Snow as "general
> public confidence" and "difficulty to counterfeit". Perhaps it can be used
> in Bounty commercials too-a comparison test between the dollar and the
Euro?
> Which one will hold up when wet...?. Again, clearly we have some
differences
> on this list about the advisability and meaning of the current dollar
> devaluation. And again, regardless of what one thinks about this (I'm in
> favor) I wonder why is the Bush administration resorting to redefining
terms
> rather than admitting what is going on?
>
> I think it is significant politically that a paper that has practically
> become the Republican Party propaganda page, takes Bush to task (far more
> than the NYT has been willing to do) for his verbal sleight of hand on two
> significant economic issues.
>
> More interesting from a theoretical point of view is the FED's new found
> concern on the problems of deflation "Having Defeated Inflation, FED girds
> for New Foes: Falling Prices". Follow the story to page 8 where the IMF
now
> says we need to prevent deflation, rather than fighting it.
>
> So there we have it-the WSJ, the FED and the IMF warning us against the
> dangers of deflation and frank admissions that falling prices don't bring
> the economy back to full employment. It's as if I woke up on some bizarre
> parallel universe where the WSJ excoriates Bush and the FED and the IMF
take
> the GT seriously. There's got to be a catch somewhere.
>
>
>