Seven Cardinal Virtues of Equitable Growth

marshallz10(z9-10 CA)September 20, 2013

This just posted today by econ. prof Brad Delong and worth discussing: [not exactly the libertarian approach to the future, in fact, a total rejection of most libertarian principles.]

1. Manage the macroeconomy to match aggregate demand to potential supply. Take the dual mandate seriously: maintaining full employment is as important a central bank goal as low and stable inflation--and much more important than preserving healthy margins for the banking sector. Run large deficits--run up the national debt--in times of war, depression, or other national emergency calling for government action. Pay down the debt in other times.

2. Invest. Invest in ideas, in equipment capital, in structures capital, in education: we need more of all forms of investment. Boost public and private investment: we need both kinds.

3. Over the past generation, America has shifted enormous resources into value-substracting industries: health-care administration, prisons, finance, carbon energy. We need to reverse those shifts, and focus the American economy on the value-creating sectors rather than the value-subtracting ones.

4. We ought to have had a carbon tax 20 years ago. We still need one.

5. We need more immigration. It is much easier, worldwide, to move the people to where the institutions are already good than to make good institutions where the people are. More immigration produces a richer country for those already here. More immigration is a mitzvah for immigrants. More immigration is, to a a lesser degree, a mitzvah for those in poor countries outside who see less population pressure on resources. And a U.S. in 2070 that has 600 million people is more of an international superpower than a U.S. in 2070 that has only 400 million people.

6. We need more equality. If we want to have equality of opportunity 50 years from now, we need substantial equality of result right now.

7. We are going to need a bigger and better government. The private unregulated market does not do well at health-care finance, at pensions, or at education finance. The private unregulated market does not do well at research and early-stage development. The private unregulated market does not do well with commodities that are non-rival. We are moving into a twenty-first century in which these sectors will all be larger slices of what we do, and so a well-functioning economy will need a larger government relative to the private economy than the twentieth century did.

Here is a link that might be useful: Seven Cardinal Virtues of Equitable Growth

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marshallz10(z9-10 CA)

One of the comments following DeLong's post is worth posting here because it highlights the nature of our collective malaise:

"Kervick said...

Good stuff. It's taken five long years, but I finally sense a new spirit emerging.

I would add: "We need more democracy." That is, we need more real, honest to goodness, high-participation, deliberative, hands-on democracy, at the national, regional, state, local and sub-local level.

Americans have to get back in the habit of thinking that the future is a place we are entitled to deliberate about, argue about and then democratically choose. We then formulate a strategy for getting to the place we have chosen, and execute that strategy.

For some decades now, Americans have been taught instead to believe that only evil communists think that way. The future isn't democratically chosen or planned in any degree; it's entirely something that is delivered to us by 1,000,000 independent entrepreneurs seeking their own self-interest by building better mousetraps and burritos. Social progress is just an improved salsa at Burrito Pavilion.

As a result of this passive and disengaged attitude toward invisible hands and the processes of historical development, Americans have lost their capacity to imagine better futures in concrete terms, and have lost their sense that what they can imagine is achievable.

One suggestion: advocate for a 4-day work week, with the open day to be devoted to community and democratic work: participation on a school board, conservation committee, zoning board, parks committee, legislature, government commission etc. In a functioning democracy, everyone needs to be part of the government. Preserving democratic liberty isn't just a matter of claiming rights; it's a matter of shouldering responsibilities.

Rule or be ruled."

    Bookmark   September 20, 2013 at 10:51AM
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It would be mighty difficult to switch the focus from greed back to ethics at this point, but I agree that too many people have lost interest in full participation. It does take a village... but we have to actively participate, and we have to hold onto our ethics and integrity...

I see all the power held by the few.. not very equitable.

    Bookmark   September 20, 2013 at 10:59AM
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I don't find much to disagree with.

The point about being invested in "value-subtracting" industries is especially urgent.

Immigration is right also, not because immigrants are monolithically wonderful or heroic or criminal-free, but because we are an aging population and all populations must have young workers or perish.

    Bookmark   September 21, 2013 at 7:32AM
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Brushworks Spectacular Finishes(5)

I agree with most everything.

Now, where do we find honest, ethical managers to govern such a move?

Please don't say Wall Street, Corporate America or the White House.

    Bookmark   September 21, 2013 at 7:48AM
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marshallz10(z9-10 CA)

The Baby Messiah wins another round.

    Bookmark   September 25, 2013 at 10:26AM
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david52 Zone 6

Its an interesting subject, Marshall. When I first read it, I thought that so much of it is just inevitable anyway. And then the second thought is that with tea party ideology now holding the country hostage and making it ungovernable, maybe not.

    Bookmark   September 25, 2013 at 11:29AM
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Embothrium(USDA 8 Sunset 5 WA)

>with tea party ideology now holding the country hostage and making it ungovernable, maybe notKoch Adds Life!

That is the main nut that needs to be cracked, everything else starts with the level of domination the 1% has achieved.

    Bookmark   September 25, 2013 at 6:42PM
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I figured this wouldn't get much play, as interesting and important a subject as it is.

"Please don't say Wall Street, Corporate America or the White House."

Aren't they all pretty much the same people?

    Bookmark   September 26, 2013 at 4:45AM
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tobr24u(z6 RI)

Dream on folks...

    Bookmark   September 26, 2013 at 5:19AM
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Maybe the tea-party will manage to make the Fed a hollow giant, and return all power to the States. Should we expect the demise of the IRS and federal military?

    Bookmark   September 26, 2013 at 8:36AM
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