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Boom-bust cycles are a feature of the unregulated Market. It is not only Keynesian counter-cyclical stabilization but what Galbraith calls the planning system of the Industrial State that dampens the oscillations. For the last 30 years (in policy) and 40-50 years (in economics) there has been a concerted effort by Market Fundamentalists to roll back the Industrial State to the Gilded Age. Neither Veblen (Theory of Business Enterprise, 1904) nor Galbraith (The New Industrial State, 1967-1974) foresaw this roll-back, which also affects the cultural narratives. In fact Galbraith heaps scorn on Milton Friedman in a couple of places in his book.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 03:35:55 AM EST
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... the Euthanasia of the Rentier prefigures the revolt of the aristrocracy of wealth against the Fordist system, if you take the next step to wonder whether the Rentier might object to the Euthanasia.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Sep 19th, 2008 at 03:53:29 AM EST
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Euthanasia is not necessary for the Rentier when he is on the point of being disintermediated by "Peer to Peer" Credit and Investment.

The financial markets are about to be "Napsterised" - or as the purists here have it - "Bit-Torrentised"

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Sep 19th, 2008 at 04:47:55 AM EST
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... peer to peer credit, not the creditor class.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Sep 19th, 2008 at 12:28:13 PM EST
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Does Fordism refer to the entrepreneurial or the planning industry systems, or to both?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 05:39:23 AM EST
[ Parent ]
... with the de facto post WWII labor peace bought by sharing productivity gains between profit and wage incomes.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Sep 19th, 2008 at 12:06:34 PM EST
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Migeru:
Boom-bust cycles are a feature of the unregulated Market.

Well, that's what I meant. Unregulated markets are to economics what battery acid is to gourmet cuisine.

Deregulation is a political choice with predictable consequences. Regulation is a different choice with different predictable consequences.

The problem isn't making sure regulation happens, it's making sure that deregulation becomes politically unthinkable - except for kooks and fringers.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Sep 19th, 2008 at 07:40:08 AM EST
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Um, no prestigious chef writes cookbooks calling for battery acid, do they?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 07:45:38 AM EST
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Only because there's no National Battery Acid Marketing Foundation.

Stranger things have happened in the US.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Sep 19th, 2008 at 07:52:14 AM EST
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... that normally made the dish taste batter, but sometimes there was a period when dishes made with it tasted terrible compared to their normally plainer counterparts ...

... and it had been long enough since the last time that cooking with that ingredient had spoiled an entire cohort of fine cuisine ...

... we might see the emergence of chefs that used that ingredient.

And definitely, it the wealthiest gourmets were able to eat millions of times as much food as ordinary people, the possibility of that ingredient becoming the norm would be considerably amplified.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Sep 19th, 2008 at 12:34:04 PM EST
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Reading Galbraith's The new Industrial State (1967) you would think Milton Friedman was a fringe crackpot.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 07:47:00 AM EST
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... ideas, he would have remained a fringe crackpot ... indeed, possibly would never have had the research assistants to blame for the cheating in his magnum opus, and certainly when hydraulic Keynesianism ran into trouble in the 1970's, Post Keynesian macro theory would have taken over.

But funding your own pet approach in economics turns out to be possible with only a small fraction of the wealth incomes at the top end of the wealth ladder. Funding means the ability to attract grad students means opportunities to win arguments with the current status quo when it stumbles.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Sep 19th, 2008 at 12:14:41 PM EST
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yup, the rules of the highway are for the proles.

we're formula one!

seriously, apart from being batshit loony for thinking that anyone will swallow the notion that their motor has no need of a governor, what are they so afraid of?

their more exotic investment toys being taken away?

under regulation, will every transaction require vetting by banks of lawyers before being executed?

is it the slowing down they fear?

or is it that they want to try every shiny new prototype investment vehicle they can, to con an ever less gullible public, without any government ethics agent looking over their shoulder, second guessing?

they always make it sound like regulation would be such a ball and chain, implying that if someone really understood the nuances of their 'jobs', then they'd be in on the game too, not trying to take the fun and pzazz out of it.

banking in the 60's was in no way glamorous, it has since gone through a period of what looks like coke-addled fashion, flyboy-style, similar to admen in the 60's, especially from the gecko thatcher 80's on. it's ironic that what could have been a good-ish system, if governed without so much living 'in the red', so proud of being 'free' and not controlled by the state, is brought to its knees by strings pulled from china, japan, the middle east, with contrastedly different ideologies about economics.

people don't seem to remember that what goes too far up, comes down hard and fast...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Sep 19th, 2008 at 09:40:32 AM EST
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