Links to what I’ve been reading.
Much of the thinking among those of us concerned with how to accommodate a growing US population in a sustainable way focuses on our metropolitan regions – our bigger cities and suburbs. But there’s another side to this: what about rural communities? Can we have resilient and sustainable patterns of living and, in some cases, growth in our smaller towns and villages?
Like an organ of the human body, the financial system calls most attention to itself when it malfunctions. But in normal times, is the financial system like the human heart, circulating essential capital throughout the economy? Or is it like the appendix, doing little when healthy but devastating when ill? Since the truth is probably somewhere in between, how can we calculate the contribution of finance to a modern economy? In particular, how much of the income received by financial institutions is compensation for actual services provided to their customers and how much is merely for taking on risk, such as funding risky loans with short-term borrowing?
The basic method of Obama’s speech yesterday was to point to a bunch of bad or putatively bad things and assert that they are in some vague way connected. It was the same method he used in his first state of the union address, in which it turned out that the root cause of the financial crisis and severe recession was our failure to have adopted cap-and-trade, sufficiently lavish higher-education subsidies, and national health care. Now the root cause is inequality.
*My note: Are we confusing a politician’s attempt to make irrelevant policy relevant with a politician claiming false causation?
Dr. Jan Eberly
Economists from across the political spectrum have also weighed into this debate and reached the same conclusion. Bruce Bartlett, a senior advisor in both the Reagan and George H.W. Bush administrations, said that “no hard evidence” has been offered for claims that regulation is the “principal factor holding back employment.” And in a recentWall Street Journal survey of economists, 65 percent of respondents concluded that a lack of demand, not government policy, was the main impediment to increased hiring.
*My note: Meant to blog about this and may still later.