Keynesian Approach

Robert Reich has an abridged bio on John Maynard Keynes, economic advisor from the Depression Era. Here's an excerpt:

Keynes' basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That's because the private sector won't invest enough. As their markets become saturated, businesses reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption and even less reason for business to invest. The economy may reach perfect balance, but at a cost of high unemployment and social misery. Better for governments to avoid the pain in the first place by taking up the slack.

Keynes was the mastermind behind the idea that government funding of jobs and getting the people to work helps in a recessed/depressed economy. That is why Obama is proposing 2.5 million jobs (see Presidental [elect] address posted below) for infrastucture development and greenification of government buildings & schools. AND LIBRARIES!!!

Governor Palin, on the other hand, is promoting (see her statements during the infamous turkey video) the idea that failed so very miserably during the Great Depression -- that government has to cut spending and balance budgets during an economic downturn. See the full Reich blog on John Maynard Keyes as to why that is a very stupid thing to think. Or, actually, simply look at the colossal failure of the Hoover Adminstration.

Citi gets a sweet sweet deal

I'm a subscriber to Robert Reich's blog. Today he posted this about Citi Corp getting a bail out:

This is not a particularly good deal for American taxpayers, but it is a marvelous deal for Citi. In return for all the cash and guarantees they are giving away, taxpayers will get only $27 billion of preferred shares paying an 8 percent dividend. No other strings are attached. The senior executives of Citi, including those who have served at the highest levels in the US government, have done their jobs exceedingly well. The American public, including the media, have not the slightest clue what just happened.

Meanwhile, more than a million workers in the automobile industry, along with six million homeowners in danger of losing their homes, and a millions of Americans who depend on small businesses and retailers for paychecks, are getting nothing at all.

He had previously posted an item about Citi versus the The Big Three Automakers (GM, Ford & Chrysler) and why Citi should not be favored over the The Big Three. Citi's failure effects the market; automakers' failure effect that proverbial "Main St", meaning working and middle class peoples.

If you're looking for an informed opinion on the economy, I highly recommend Reich. I barely think i need to mention this, but his ideas are considerably more leftist (I would requalify that as more "middle class focused" as opposed to focused on the rich) just so you know.

Meanwhile, Obama just finished a press conference introducing his new economic team. The members are a mix of experienced and new, centrist and center-left. I have no commentary to add to this, as the only thing I know abotu any of them is that Lawrence Summers, now head of the National Economic Council, ticked off a poopload of ladeez at Harvard when he said girls are genetically crappy at math. Or something like that.

This Week in WTF - My Own Personal Sad Realization

So, here's my tragedy for this week (besides getting in a minor fender bender today & Mom's scary spill down the cellar stairs). Last week, after months of job searching, interviewing, etc, I was offered a job at a town library. Yay, right? But, a few days later, they had to revoke the offer because the town instated a hiring freeze. They are worried about receiving enough funding from the state to help with municipal costs. So, instead of working for a weekly income, I sit at home (and blog) and receive just a little bit less money than I'd earn from my potential job by, instead, collecting state unemployment.

Painful painful irony.