Tuesday, March 4, 2014

Economic Teenagerism

Mark Blyth, Ivy League economics professor, says that sometimes, “What is individually rational becomes collectively disastrous.”

This is true in many areas of life. It applies to dorm bathrooms, stampedes, defensive wars, freeway on-ramps, runs on banks, hoarding, depressions, and recessions. He says that some in American are wanting us to engage in economic-teenagerism.

He points out that adjusting for the variables, the American working class has not had a raise since 1979 despite economic gains in efficiency and innovation.

He further points out that in countries that have engaged in severe austerity measures when compared to the US, the budget deficits have ballooned while ours has diminished. So you know, he emphasizes that you have to manage the debt, but that the most critical thing is the size of the economy. If your economy shrinks you get into a downward spiral.

http://www.amazon.com/Austerity-The-History-Dangerous-Idea/dp/019982830X

Loren M. Lambert © December 8, 2013

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