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First, an excellent posting! It validates my analysis of urban mass transit rail in the U.S. costing $3.4 trillion just to build, never mind the rolling stock. Clearly, someone talking billions at this point is a sure sign that they are of the old paradigm of finance-dominated "free market" neo-liberalism - the Anglo disease.

And that's the problem with economic advisers - the old paradigm of finance-dominated "free market" neo-liberalism is so damn dominant now. Even Thomas Palley (who so far as I know was not close to any of the primary election contenders), imho, has stumbled badly in his policy prescriptions the past few months. It is extremely disheartening. In a way, the problem is more cultural than anything else. We have to attack the Anglo disease every opportunity we get. I think one more big financial shock like Bare Sterns, and the Big Crack will begin.  

Btw, anyone interested in how the U.S. bubble economy has managed to keep going since March would do well to read Doug Noland's latest "CREDIT BUBBLE BULLETIN
The cost of credit seizure" at http://www.atimes.com/atimes/Global_Economy/JF10Dj02.html

With Wall Street finance having lost its perceived "moneyness", the ongoing US credit expansion will only be sustained by rampant growth of instruments that retain the perception of safety and liquidity - namely, Treasuries, agency debt and MBS, bank liabilities and money fund "deposits". And, at least for the first quarter, double-digit growth virtually across all these key sectors generated the necessary SAAR $2.036 trillion of non-financial credit and SAAR $3.115 trillion of total system credit to prop up an acutely vulnerable economic bubble. But at what cost? And for how long does today's functional "money" - being inflated at double-digit rates through the intermediation of risky credits - retain its "moneyness"?
by NBBooks on Thu Jun 12th, 2008 at 09:56:51 AM EST
[ Parent ]
NBBooks:
Even Thomas Palley (who so far as I know was not close to any of the primary election contenders), imho, has stumbled badly in his policy prescriptions the past few months. It is extremely disheartening. In a way, the problem is more cultural than anything else. We have to attack the Anglo disease every opportunity we get. I think one more big financial shock like Bare Sterns, and the Big Crack will begin.
I have been googling a bit for Thomas Palley and I found a November 2007 paper criticising Financialisation which would seem to be another name for "Anglo Disease".

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 10:13:29 AM EST
[ Parent ]
Btw, anyone interested in how the U.S. bubble economy has managed to keep going since March would do well to read Doug Noland's latest

"CREDIT BUBBLE BULLETIN
The cost of credit seizure"

Any chance that someone might be kind enough to translate the column into English?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 12th, 2008 at 10:33:27 AM EST
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Thanks for your vote of confidence.  $3.4 trillion JUST for urban mass transit sounds like a good starting number.

As for Palley.  I say let's cut him some slack.  Here is why I say this.  Even though economists have familiarity with large numbers, they have--as a general rule--NO experience with building anything so they don't have the background to estimate either the time nor the cost for such policy prescriptions.

My editor / publisher is a VERY smart guy and as a professor of Institutionalism, his progressive credentials are impeccable.  Even so, he had me cut my $100 trillion estimate because he was afraid of appear to irresponsibly radical.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Thu Jun 12th, 2008 at 11:43:04 AM EST
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