Tom, I too can see the logic of Baker's argument -- but only looking by at it from a boring conventional perspective. What's the difference between his logic and Larry Summers'?
But what is it that you think "ain't going to happen"? That net exports will fill the demand gap? I'd agree with you. Or that there will be a stimulus driven recovery, meanwhile, to placate the populous until the dollar falls in value and exports zoom? I'd agree on that with you. Or, simply, that there won't be much of a recovery at all, until a new approach to macro policy is implemented? I'd agree on that with you. Gene On Jun 20, 2012, at 7:04 PM, Tom Walker wrote: > Two points: 1. I can see the logic of Dean's argument. 2. It ain't gonna to > happen. > > On Wed, Jun 20, 2012 at 6:57 PM, Eugene Coyle <[email protected]> wrote: > In a Counterpunch article on June 20th, Dean Baker seems to recommend > austerity as the long term solution to the recession: > > > > > The Recession Politicians Don't Want to Talk About > > The Real Story of the Housing Crash > > by DEAN BAKER > > The economy is certain to occupy center stage in the presidential race this > > fall. Unfortunately neither Governor Romney nor President Obama are likely > > to give us an accurate account of the economic problems we are now facing. > > > < snip > > > After describing a huge drop in demand as the result of the collapse of the > housing bubble, Baker says that the government is the only remaining source > of demand to fill the gap. But then he turns to austerity for the longer > term: > > > Over a longer term we can expect that net exports will fill the demand gap. > > If we bring our huge trade deficit close to balance by selling more abroad > > and importing less it will provide a substantial boost to demand. However > > this will require that the dollar fall in value relative to the currencies > > of our trading partners, making U.S. products more competitive. That is a > > process that will take time. With many of trading partners also in severe > > slumps, we cannot expect any major improvement in our trade balance in the > > immediate future. > > > What is that but austerity? > > Gene > > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > > > > -- > Cheers, > > Tom Walker (Sandwichman) > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
