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View Diary: "In Defense of Deficits" by the great James Galbraith (19 comments)

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  •  Unfortunately, the financial traders may not have (0+ / 0-)

    the necessary qualifications to perform useful tasks. In many people, the gift of gab seems to mask a practical incompetence.
    I'm reminded of the young housewife whose children I used to baby-sit. We lived in the same gigantic apartment building. One day she called me to come and see what she'd done. Turns out she'd spent the whole day washing down her entire kitchen. Ceiling, walls, cupboards. She'd washed them all. But, apparently, she'd used just plain water and a sponge, which, of course, didn't cut the grime. So, the whole place was just as grey and greasy to the touch as it was before she started. Perhaps she saw it, but she obviously didn't know how to clean.
    There was a point to all those TV ads for Mr. Clean, etc.
    The North American continent has been explored and exploited and exhausted by a horde of middlemen -- traders and factors that make up the commercial class. They are the "market." Oddly enough, the middlemen don't even show up in formal economic analysis where the primary players are producers and consumers. And, while the middlemen have been dominant from the start of European conquest, today's middlemen operate in a virtual realm. Their enterprise is esoteric. Their virtual or vicarious economy has increasingly little connection to the real economy. I sometimes think of it as comparable to the dominance of form over function in literature and the decorative arts. Wall Street is wasting dollars on derivatives and trades in the same way a "modern artist" covers a canvas with white paint and tries to sell it as art.
    The advantage we have, if we're willing to take it, is that, unlike the components of acrylic or oil paints, dollars are limitless. We can always make more, as long as Congress, the source, doesn't engage in rationing.
    Of course, simply making more dollars to compensate for those Wall Street plays with is inefficient and renders the accounting function meaningless. So, prudence would seem to dictate that their frivolous use of dollars be somehow limited. Perhaps we should put Wall Street on an allowance. LOL
    Congress needs to be disabused of the notion that rationing dollars is OK. In addition to the inconveniences rationing causes (including hoarding), artificially scarce currency prompts decision-making on the basis of how much something costs, rather than whether it is worth doing at all. We are making bad choices because there is seemingly not enough currency to make good ones. As a result, we are building mountains and landfills with stuff that shouldn't have been manufactured and sold to begin with. Cheap stuff. And cheap food that is making people sick.

    We organize governments to deliver services and prevent abuse.

    by hannah on Tue May 28, 2013 at 02:37:40 AM PDT

    [ Parent ]

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