Comments on: Bloomberg: Jason Furman now top dog for Obama http://moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/ St Croix, United States Virgin Islands Thu, 09 Feb 2012 07:42:52 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: warren mosler http://moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/comment-page-1/#comment-3576 warren mosler Mon, 26 Jan 2009 14:32:40 +0000 http://www.moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/#comment-3576 I don't think that's the primary reason. Borrowing to spend supports lifestyle. What matters is distribution of consumption more so than distribution of income. So programs to keep consumption up for lower income individuals in that sense is progressive. What has hurt is the fact that the 'labor market' is not a 'fair game' in that workers have to work to eat, while business only higher if there is a sufficient return on investment. Given that game theory tells us real wages would stagnate, which has been the case. I don’t think that’s the primary reason. Borrowing to spend supports lifestyle. What matters is distribution of consumption more so than distribution of income. So programs to keep consumption up for lower income individuals in that sense is progressive.

What has hurt is the fact that the ‘labor market’ is not a ‘fair game’ in that workers have to work to eat, while business only higher if there is a sufficient return on investment.

Given that game theory tells us real wages would stagnate, which has been the case.

]]> By: Jim Baird http://moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/comment-page-1/#comment-3570 Jim Baird Mon, 26 Jan 2009 13:29:39 +0000 http://www.moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/#comment-3570 And doesn't the "horizontal" monetary expansion lead to increased inequality as the have-nots borrow more and more from the haves? Is that what led to the increase in inequality we've seen over the last 30 years? And doesn’t the “horizontal” monetary expansion lead to increased inequality as the have-nots borrow more and more from the haves? Is that what led to the increase in inequality we’ve seen over the last 30 years?

]]> By: warren mosler http://moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/comment-page-1/#comment-3563 warren mosler Mon, 26 Jan 2009 01:48:42 +0000 http://www.moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/#comment-3563 yes, the surpluses reduced savings by exactly that much, and it was the desire to reduce savings via going into debt that drove the economy until collapse. The household sector was expanding its indebtedness at an unheard of and unsustainable 7% of gdp as it crested the y2k hurdle and then collapsed. Subsequents deficits still haven't made up for the equity lost in the surplus years, when you recognize deficits of maybe 4% of gdp are perhaps 'neutral.' yes, the surpluses reduced savings by exactly that much, and it was the desire to reduce savings via going into debt that drove the economy until collapse.

The household sector was expanding its indebtedness at an unheard of and unsustainable 7% of gdp as it crested the y2k hurdle and then collapsed.

Subsequents deficits still haven’t made up for the equity lost in the surplus years, when you recognize deficits of maybe 4% of gdp are perhaps ‘neutral.’

]]> By: zanon http://moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/comment-page-1/#comment-3562 zanon Mon, 26 Jan 2009 01:22:42 +0000 http://www.moslereconomics.com/2008/06/10/bloomberg-jason-furman-now-top-dog-for-obama/#comment-3562 Can someone explain how "Clinton caught the tail wind of the 5% GDP deficits of the early 90’s that pumped in income and savings, and allowed the economy to expand until the surpluses generated by the countercyclical tax structure destroyed almost $1 trillion in net financial equity and caused the economy to collapse in 2000." If the deficit became too small under Clinton, as Warren seems to be arguing, wouldn't that mean there was insufficient money available for savings, and wouldn't that reduce aggregate demand? But the Clinton years had strong AD -- the 2000 drop was because the .com bubble popped (it inflated under Clinton). Where do asset bubbles live in the Paradigm? Can someone explain how “Clinton caught the tail wind of the 5% GDP deficits of the early 90’s that pumped in income and savings, and allowed the economy to expand until the surpluses generated by the countercyclical tax structure destroyed almost $1 trillion in net financial equity and caused the economy to collapse in 2000.”

If the deficit became too small under Clinton, as Warren seems to be arguing, wouldn’t that mean there was insufficient money available for savings, and wouldn’t that reduce aggregate demand? But the Clinton years had strong AD — the 2000 drop was because the .com bubble popped (it inflated under Clinton).

Where do asset bubbles live in the Paradigm?

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