As I read all of the bickering about Greece’s fiscal crisis (Paul Krugman’s latest salvo is here) it puts me in a mind to summarize. Japan has taught us that government spending does not ipso facto produce a flourishing economy. Greece has taught us that austerity does not ipso facto produce a flourishing economy. What does? We don’t know.
That’s completely consistent with what one of my economics professors said fifty years ago to the effect that we know how to produce shortages but we don’t know how to produce prosperity.
IMO those who draw a dichotomy between socialism on the one hand and laissez-faire free market capitalism on the other are missing the boat. Anybody who’s advocating one or the other is either misinformed or an idiot. Our problem is not in choosing between the extremes of a centrally-planned economy and a completely laissez-faire one but in providing prudent stewardship. Should this aspect be more or less controlled? What are our needs? What are the risks?
There will always be people who think they can make a buck out of unrestricted capitalism or as a commissar. Resist them.
“IMO those who draw a dichotomy between socialism on the one hand and laissez-faire free market capitalism on the other are missing the boat. Anybody who’s advocating one or the other is either misinformed or an idiot. ”
Uh, er, well you’ve just put your finger on it. Those are academic polar straw men. Neither exists. We from time to time drift too far in one direction. I think everyone knows where I stand right now.
Where I stand is that some things are too unregulated, most are tremendously over-regulated, and we should have a much better fit between laws and regulations on the one hand and enforcement on the other.
I also think that we need a law like the one that Canada just adopted which required regulators to remove a regulation of equal economic impact whenever they want to impose a new one.
My dad, early-on, lectured me on the benefits of “moderation” in one’s life, saying that balancing extremes was how one achieved happiness. I thought about this when reading your comments on unrestricted capitalism versus over regulation. Unfortunately, the parties and people voting in them have become blind sighted by their own political alliances, and thus believe only the opinions extolled in their party’s ideology. Basically, common-sense thinking simply does not prevail any more, either in DC or among a more self-serving and government-dependent populace.