Comments on: NIC Report: US Geopolitical Influence to Diminish by 2025

By: slowsmile

slowsmile — Mon, 24 Nov 2008 09:51:17 +0000

Tanya,
Thanks for your comments. I completely agree with you here, Keynes was a great man with a wonderful vision. His plan, via Breton Woods, was remarkable in putting the world back on to its economic feet after WW2. However, I really believe that Keynesian Economics has had its day now, as evidenced and explained in three parts by this link:

http://seekingalpha.com/article/106043-the-downfall-of-keynesian-economics-and-the-u-s-part-1-of-3

I regard real and adverse economic situations as a Darwinian beast, a continuous moving target that cannot be predicted or held back. Here, logic and economic theories are plainly inadequate, since it can be said that the economic theories of both Keynes and Friedman have been followed since the 1950s and have clearly led us to this current critical financial point.

As to my own further reasons, a partial explanation for this lack of economic foresight may indeed be because these economic theories are logical, are so set in concrete, and are never capable of adjusting to the continually shifting economic terrains. Perhaps part of the reasons for this inadequacy is the inability to foresee, factor in or explain the relationships between market confidence, leverage, risk and greed into their economic mathematical equations. These are all involved as major causes of the current financial crisis and are - for the greater part - all human characteristics that are impossible to predict.

By: Tanya White

Tanya White — Sun, 23 Nov 2008 04:49:21 +0000

The reference to the increased likelihood of international conflict over resources should remind us that it was once - certainly before and during World War 2 - widely taken for granted that there were major economic causes of war, and that economic policies and international economic institutions were important to prevent this and to increase the chances of peace. The economist Keynes, who is being revived today, certainly believed this. It may be in part because of the success of Keynes’ project of post-war prosperity and therefore peace that we have largely lost sight of this - until now. Anyone wanting to think about the economic causes of war and (international and domestic) economic policies for encouraging peace might like to start by reading a book called “John Maynard Keynes and International Relations - Economic Paths to War and Peace”, by Donald Markwell. It’s especially interesting on free trade and peace - really important today!

By: slowsmile

slowsmile — Sat, 22 Nov 2008 18:55:16 +0000

Thanks Richard. I would also suggest that your warning concerning the NIC Report could apply to every govt agency in every country in the world today. Every govt. plays that tedious game. But I have found a good site for US govt. statistics though - the site is call http://www.shadowstats.com - run by John Williams. A meticulous and thorough man, I think. He even writes about the history of ‘biased’ American govt. reporting.

I also agree that shuffling around and redistributing taxes will not help to resolve or repay the current US Fiscal Debt problem to any extent. Adopting such a policy will aid this current problem about as much as giving tax cuts I fear. Bush gave two notable tax cuts in his reign, and managed - single handedly - to nearly double the US National Debt. A debt must always be paid back.

Perhaps a departure from Keynesian/Friedman Economics is now necessary since consumerism, debt, risk and greed have contributed so much as cause to this financial crisis. Maybe a return to Savings and Production - a much older way - and adopting the tenets of The Austrian School of Economics would help the situation.

Much has been said about whether we should or should not have free markets. I would generally accept this as a natural rule for the markets, but I would add that the reasons for the reasons for the current financial mess are not about bad business practices.

The habit of greed, leverage and risk-taking were never adequately scaled into anybody’s economic theories. I’m fairly sure that Keynes, Friedman and Hayek were all geniuses - but how do you write a consistent mathematical formula for taking risk and greed ? It’s impossible, because these are human traits, therefore utterly unpredictable.

By: Richard

Richard — Sat, 22 Nov 2008 17:46:26 +0000

I routinely read NIC Reports and find them instructive with the caveat that you MUST sift out the politics. Having written some analysis myself I know how many hands, filters, revisions and partisans they have to pass through.

Any step toward socialism by the U. S. (call it wealth transfer, redistribution, justice or bullshit) is a step backwards.