Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Until 1929 the American System worked quite well. Run amok finance derailed it during the Great Depression of the 1930s, but WWII and the post war period set it right again. But by 1971 or so US economic elites came to prefer first milking the wealth that had accumulated in the USA since colonization and then looting that wealth. For those purposes the American System was not so useful.

They had been undermining that system since the 1880s with their efforts to spread neo-classical economics via the universities and through the establishment of the Federal Reserve system. The incompetence of that approach to economics should have been revealed for all by the Great Depression. Fisher clearly showed the role of debt and the unwinding of unsustainable debt in the creation of depressions and Keynes created an alternative approach that better explained economic activity and gave rise to useful insights and practical policy recommendations.

But those recommendations were not to the liking of the economic elites, as they led to too much money being given to labor and the bottom 95% of the population. So no expense was spared to discredit Keynes and pump up Chicago School economics, especially from the mid 60s onward. Fisher's later work was simply ignored. These efforts came to fruition with the election of Ronald Reagan and it has been downhill at increasing velocity every since.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Apr 8th, 2011 at 12:44:57 AM EST

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