socrateazz

Economics and Its Discontents

I may be wrong. I think economists overvalue the short term effects of decisions made to correct imbalances. And they undervalue the consequences of future effects of those decisions. Major economic rules changes since 1980 have been few but really has put us where we are now. In the early eighties, Reagan pushed taxes on higher income people down. Because supply of goods was being overwhelmed by excess wealth going into the workers hands. Those workers attempted to spend that wealth causing a demand which pushed up prices. Inflation was the way of the future at that point. Reagan's policies caused a reversal. Some of those policies needed to be reduced in the 1990's because they were pushing too much wealth into the hands of the few. Instead they were pushed even further toward wealth redistribution toward the rich. Much continues today. Financial controls protected the banks from serious idiotcy for years. They kept banks from making decisions which would be good for the banks short term but had elements which could cause serious imbalances within banks. The problem is: Things which look good short term also have hidden consequences long term. I think we are in the beginings of a depression and I think the short term actions taken so far by those in control will have little positive long term effects. What do I know? Time will tell.