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In particular, it is a common failing of mainstream economics to assume an economy that naturally tends to full employment, so that policies that boost employment are a cost, when in the real world they are a benefit.

It really is a question of costs and benefits to whom. Mainstream Economists have been trained, and as a condition of continued employment are required, to see these questions from the perspective of those who own the capital and to assume that if the interests of these worthies are not satisfied nothing will happen.  

The heterodox economists are more likely to consider the other 99% of the population, the ecosystem and the possible advantages of investments with goals other than 18% ROI for the investors--such as sustainability and total productivity of the entire society. From the perspective of the 1%, every dime spent stimulating employment is a dime taken out of their pockets. From a social perspective every involuntarily unemployed person is a chunk of lost production. Keynes understood this.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Apr 13th, 2010 at 04:38:13 PM EST

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