Bryan Willman said...
Focusing on either party per se misses a more important issue - there are actually serious divides in the electorate.
For example, it appears that a plurality actually oppose "obamacare" - were this not so, the GOP wouldn't be making an issue out of it.
You will never have "certainty" while two large mind-sets (which we might call "more" and "refuse to pay for it") are at odds. Until there is a lasting consensus on the total size and structure of government (inclusively defined) there cannot be "certainty".
The real roots of the difficulty of governing in the US have to do with the near even split on profound issues throughout the electorate.
For example, it appears that a plurality actually oppose "obamacare" - were this not so, the GOP wouldn't be making an issue out of it.
You will never have "certainty" while two large mind-sets (which we might call "more" and "refuse to pay for it") are at odds. Until there is a lasting consensus on the total size and structure of government (inclusively defined) there cannot be "certainty".
The real roots of the difficulty of governing in the US have to do with the near even split on profound issues throughout the electorate.
Winslow R. said...
It makes for interesting theater.
Since Oct. 2011 we have long-term rates continuously reaching new lows which is goosing the housing market since middle America doesn't pay much attention to what is going on beyond its borders.
The stock market is paying attention to Europe, but the stock market also pays attention to the long bond. It looks like European concerns are winning out. If the crisis is resolved, I'd expect a significant boost to the stock market, at least until the long-bond rate rises to its historic trend.
Two groups of my related family are vacationing in Europe this summer (planned months ago) with no idea of what is happening there. The Euro/dollar exchange rate is truly an unexpected bonus.
Since Oct. 2011 we have long-term rates continuously reaching new lows which is goosing the housing market since middle America doesn't pay much attention to what is going on beyond its borders.
The stock market is paying attention to Europe, but the stock market also pays attention to the long bond. It looks like European concerns are winning out. If the crisis is resolved, I'd expect a significant boost to the stock market, at least until the long-bond rate rises to its historic trend.
Two groups of my related family are vacationing in Europe this summer (planned months ago) with no idea of what is happening there. The Euro/dollar exchange rate is truly an unexpected bonus.
tagyoureit said...
This reminds me of a scene in the Frontline story about Al-Qaeda in Yemen. There we're a group of men with guns addressing other group of unarmed men about why they were fighting. The armed man stated "We institued Sharia law", then asked, "Don't you want Sharia law?"
Don't you want austerity? Don't you want gridlock?
Don't you want austerity? Don't you want gridlock?
tagyoureit said...
*were
Matt White said...
The debt ceiling debacle probably did hurt the economy. But, this is the type of thinking you get from the two authors. Both liberal academic professors, government insiders, Stevenson @ the labor dept, big government solves all problems, blame it on the GOP. Yet, there is blame enough to go around. The keep spending, borrow it from China at all costs is not mentioned, never mind the Democratic Senate with no budget for 4 years!! No it's all the GOP! This is why this country is going downhill! Pople like these two bound by their ideology vs the good of the country!
Second Best said...
Out of sight is out of mind. Regulations that increase transparency increases uncertainty due to observable fear. Bring back the shadow banking industry as a Black Ops program to insure complete invisibility.
Stamp out all fear of uncertainty. What cannot be seen at all cannot be feared or stoke fear of what could be there since it doesn't exist. Once the private sector realizes that uncertainty has been eradicated permanently and all risks are zero spending will be restored.
I'm Flim the Finance Flam and I approve this message since it's prepaid to avoid the uncertainty of a voided transaction.
Stamp out all fear of uncertainty. What cannot be seen at all cannot be feared or stoke fear of what could be there since it doesn't exist. Once the private sector realizes that uncertainty has been eradicated permanently and all risks are zero spending will be restored.
I'm Flim the Finance Flam and I approve this message since it's prepaid to avoid the uncertainty of a voided transaction.
jonathan said...
The uncertainty argument is fascinating. Not for its content but for the careless way it is used. For example, that the small business survey says about 10% are concerned about taxes and regulation is used to say uncertainty is a huge problem, even though that percentage is the same as it always is and the only change has been a huge increase in the percentage worried about sales. If you believe in expectations theory at all - which seems to be everyone - then clearly the uncertainty caused by the debt ceiling debate has current consequences.
rjs said...
what we really need is a dictator...we wouldnt have much economic uncertainty with a dictator...
save_the_rustbelt said...
I wonder if the authors actually talked to any business executives or owners?
Not likely.
Stay in the office, crunch the statistics, draw conclusions.
Actually, the TAs probably crunched the statistics.
Not likely.
Stay in the office, crunch the statistics, draw conclusions.
Actually, the TAs probably crunched the statistics.
Bank Exchange Rate said...
"Republicans have also vowed to privatize Medicare"
This is clearly a good things!! Most developed countries have already done this including Australia...The U.S is soo far behind and soooo inefficient when it comes to healthcare...how can you not see this as a net positive?!
This is clearly a good things!! Most developed countries have already done this including Australia...The U.S is soo far behind and soooo inefficient when it comes to healthcare...how can you not see this as a net positive?!
Joe Smith said...
I am just a self made millionaire, self employed kind of guy - not an economist or political activist. During the debt ceiling debate I concluded that the Republicans were insane, sold most of my American equities, shorted the index and made money.
I have not gone back into the American equity markets since then. The Republicans are too f**king dangerous for me to make investments. Its like watching psychotics juggling hand grenades.
I have not gone back into the American equity markets since then. The Republicans are too f**king dangerous for me to make investments. Its like watching psychotics juggling hand grenades.
Bryan Willman said...
There is some theater, since of course spending is in many ways controlled by the house (consitution explicitly grants them some powers, others they hold as a matter of course.)
In short, it's not necessary to have theater over the debt ceiling (but apparently politically useful to do so), since the same actors can (and will) force the issue via direct means anyway.
And for those who might which for a more parlimentarian system, keep in mind that in such a world Mr. Bohner is the prime minister and Mr. Obama's role is to serve tea at the meeting where the repeal of Obamacare is announced.
In short, when complaining about gridlock, be careful what you wish for....
In short, it's not necessary to have theater over the debt ceiling (but apparently politically useful to do so), since the same actors can (and will) force the issue via direct means anyway.
And for those who might which for a more parlimentarian system, keep in mind that in such a world Mr. Bohner is the prime minister and Mr. Obama's role is to serve tea at the meeting where the repeal of Obamacare is announced.
In short, when complaining about gridlock, be careful what you wish for....
havnaer said...
Go ahead, Boehner. Make my day.
Darryl FKA Ron said...
Economic uncertainty has always existed due to externalities. It was Joe Schumpeter that convinced democratic capitalism to institutionalize economic uncertainty into the internal economic processes of finance and capital in order for bigger highs and more disastrous lows to keep life interesting. It was sold as a formula for economic growth and it worked like steroids, with many unpleasant side effects and shortened life expectancy.
you are clearly in thrall to a socially constructed illusion
federal debt costs nothing to generate and nothing to liquidate
if its held by the fed
the fed can buy it all if it so chooses and with money it creates at zero cost
what is your problem with this ?
now you are shown one possible outcome
the extreme outcome
how is this frightful to u ?
my guess you suffer from a second socially constructed illusion
hyper inflation
do you toy with owning gold bought at 1k or more an ounce ?