May 7, 2003
From the desk of Jane Galt:Department of egregious redundancy
Great Robert Samuelson article.
Posted by Jane Galt at May 7, 2003 3:05 PM | TrackBack | Technorati inbound linksVery good article.
Krugman has been saying the same thing for some years now. And developed analytical models to try to explain all this.
Glad some in the general press are beginning to catch on.
Better late than never.
A day or so ago, Algore's good buddy Mort Zuckerman wrote that we need substantial immediate stimulus and the Bush tax cuts are not enough.
Samuelson's stagnation scenario screams out for a Reaganesqe tax cut (which brought us out of the stagflation of the 70s).
If reliable liberal voices like Zuckerman and Samuelson continue to lay out the obvious case for big tax cuts, perhaps Congressional Dems will be frustrated in their efforts to keep the economy stagnating.
Jane-
Sure it's a great article, but many people have been aware of this potential problem for awhile. What I'm not reading anywhere are sensible proposals for how to avoid deflation. Instead, what I read are people like Krugman on the left and Kudlow on the right using this potential problem to argue that now we really need to do all of the things they've been wanting to do for other reasons.
Do you have any thoughts on what we should do differently, as a country or as individuals, to deal with this problem?
Goodness, GT, not everything is an endorsement of Paul Krugman or the liquidity trap. He's not exactly the only economist to have noticed the problems in Japan.
He isn't? You sure?
Just kidding.
No, he may not be the only one but he certainly was one of the 'pioneers'.
And that's always been my point about Krugman. Agree or disagree with his politics he is simply way ahead of most everyone else in the general press in terms of insights.
BTW, did you follow his little seminar on the tax cuts and the jobs? Any views? It's too bad that National Review hires idiot know-nothings like Luskin to comnent on that when they don't understand the basic economics. You should write for them. The fact that you don't drink the supply-side Kool Aid means you probably wouldn't be hired but you are smart and witty enough to expose in an effective way many of the sillier economic arguments of the left.
Jane, the answer is not found in tax cuts or fed funds rate manipulation, nor consumer spending or savings rates.
The answer is productivity and it is a generational solution. Those of us old enough to remember the days when volume of activity covered management errors in marketing or manufacturing can testify that the pure competitiveness of business has increased dramatically.
As a result, anyone with significant experience in executive management and, in addition, the individual courage to look at how other companies have better tools or practices can look around their own office and know that opportunity is ready and waiting for them.
Harold Geneen wrote a management tome years ago that opened my eyes. The barrier is arrogance, hubris, whatever you want to call it. Until executive management accepts the responsibility to perform effective organizational self criticism, opportunity will be standing in the corner office laughing at the befuddled CEO with the red ink rising around him. Unfortunately, the truth is that most of it is a function of the male ego.
If you want to know more about where we could be without this problem, the first place to look is the roster of Baldridge Award companies.
Whew! Sorry for the rant, I had to get that off my chest.
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