Sunday, August 28, 2011

Show Me The Errors Of Appropriate Keynesian Spending

Considering the way he threatened Fed Chairman Ben Bernanke, Governor Perry obviously considers himself some sort of economics expert, and considering his opposition to any kind of Keynesian deficit spending to get the unemployed back to work, he must have some iron clad grip on American history. Unlike Governor Perry, I am not an economics expert. I am just an average American, born in the Midwest (Illinois), raised in the Midwest (Wisconsin), currently residing in the Midwest (Ohio). In many ways, I am just the common man, facing these difficult times and trying to raise a family. Then again, there's part of my experience that is a little different from your average Midwesterner (and that Governor Perry seems to dislike): like many others who wanted to expand their horizons, I attended supposedly elitist Eastern universities. I found that by leaving what was familiar to me and conversing with people of a thousand different backgrounds, I learned. Now that doesn't make me better than people who stayed in Wisconsin or Texas (I have dear cousins and friends who are from Texas), but I did learn.

Two of the things that I learned at Georgetown University and The Catholic University of America were to pay attention to previous experience and to ask intelligent questions. "Be attentive" is an imperative roughly equivalent to "show me," the motto of Missouri, one of my previous states of residence.

What then should we pay attention to? The experience we need to pay attention to is the experience of the Great Depression, the first great constriction, and other economic downturns. Doing so will help us understand the current economic constriction that plagues us. The questions we need to ask are:

1. If Keynesian economics is so flawed, then why did Keynesian spending via the New Deal and military spending for World War II end the great depression? In 1932 the unemployment rate was 23.6 percent. By 1936, thanks to the New Deal spending of the Federal Government, the rate had fallen to 16.9 percent. That was a 6.7 percent drop completely connected to the generous social spending of the Federal Government. It was not caused by a later phase of Keynesian stimulus which occurred 5 years later when we entered World War II.

2. Why has the US economy, stimulated by Keynesian policies for 80 years produced more wealth than any other country in history?

These questions must be answered before we abandon an economic model that works. So, Governor Perry "show me." Show me what Franklin Roosevelt did wrong. Show me what Ronald Reagan did wrong when he stimulated the economy through defense spending. Show me what the US government did wrong when it took the internet it had created and gave it to the global private sector for economic growth.

Show me.

Thursday, August 18, 2011

Let's Use Intelligence As We Deliberate About Economic Policy

As we consider our fiscal priorities over the next few years, it is wise to recall John Rawls' book A Theory Of Justice. In this text, Rawls argues successfully that the economic policies that are best for the poor are the most rational and thus the best policies.

His argument proceeds as follows: imagine that you do not know your status in society. All you know is that you are rational and self interested. You are asked to choose the economic policies that will guide your country. Which economic policies would you choose?

Rawls argues that we all would choose the policies that are best for the poor because when we are placed back into society we could be poor. We would not choose policies that would make the poor suffer because we could end up being the suffering poor. Therefore, the most rational policies are the policies that most help the poor and vulnerable.

Will the US Congress act to lower the rate of poverty and to protect the health care reform law that extended insurance to 20 million uninsured Americans?

Only if they behave rationally.

Tuesday, August 16, 2011

About The Deficit And Debt Debate

First things first. Everyone, including conservatives, needs to acknowledge the following: one of the major reasons we have deficits is that key policies of the Democratic party--Social Security, Medicare, Medicaid, OSHA regulations-- have all been successful. That's right, successful. Our seniors do not die as early as they used to. All of these Democratic policies have prolonged peoples' life spans. This is a good thing.

Before conservatives mock everything liberal they need to acknowledge that these policies are successes.

Now one of the consequences is that when people live longer they then need more social security checks and more health care. But this is not something to disdain or regret. It first needs to be celebrated, yes celebrated, and then prudently responded to. It does not mean that government programs necesarily fail.

Truth, Compassion, And Christian Dialogue With Other Religions

A friend of mine asked me a question:

"In heaven, do you think Jesus and Buddha are quarreling over doctrinal issues?"

I responded first by pointing out that Buddhists do not believe in heaven. She responded by asking me if, as a Christian, I thought that the Buddha would be in heaven. I agreed that he would be.

"So answer the question."

I gave it some thought and answered: " Of course not. They have the deepest compassion for each other."

She replied, "In the same way, we must have compassion for each other, even if we have serious differences."

I asked, "Does compassion for others mean that we find truth in different religions?"

She answered, "How can we have compassion for others, really feel with and feel for others, if we reject the ways that lead them to freedom?"