LOCALDEV (alonovolabs)

A little more heady than I had anticipated. 2009-09-09

Reviewer: Warren R. Grayson

I enjoyed this book, but I read it right after reading Paul Krugman so it was a little more technical than I was used to. (I don't know if that is a good thing or a bad thing.) I enjoyed it all the same; I recommend it.

The myth of the free market and its concomitant freedom 2009-07-28

Reviewer: Luc REYNAERT

In this formidable book, J.K. Galbraith reveals that the free market emperors are naked. The free market doctrine is simply a run from `the money to the ideas'.
The naked emperors sold their myth by linking markets to (economic) freedom. This concept opposes real freedom created by a raising general living standard (e.g., universal health care, free public education). Economic freedom is only the freedom to shop.

The myth consists of 4 elements: monetarism, supply-side economics (including tax cuts and deregulation), balanced budgets and free trade.
Monetarism is a scam, because not the money stock, but interest rates drive the economy.
The only real effect of tax cuts is the enrichment of the super wealthy, leaving nearly nothing for the society as a whole.
Deregulation is not more (not less) than turning public institutions over to the private sector.
Budgets deficits no longer depend on federal policies, but on international trade (imbalances) and the financial health of the private sector.
The link between the world's most important trading partners (China and the US) is not based on free trade, but on a tacit agreement between US consumer interests and Chinese manufacturers.

The free market policies are also responsible for huge inequalities (income) within the
US society. Therefore it is highly inefficient, because inequality produces unemployment and unemployment is waste (of means of production).
The deepest issue concerning inequality is the distribution of political power.
In the latest republican administrations, this political power was grabbed by a secretly operating clique of `predators', who assaulted the welfare State, regulation and the unions. Public institutions and public protection (health, safety, consumer protection, environment, national security) were systematically abused for private profit. The State was run in such a way that it would bring to them the most money, the least disturbed power and the greatest chance of rescue should something go wrong.

The power of the predators should be broken.
Serious planning should be installed for alternative energy sources and to combat climate change (global warming).
Price controls should be imposed in order to reduce economic inequalities and the power of monopolies.
Before the fall of the Berlin Wall, the US domination was based on military power and protection against a threat (communism). After the fall of communism, a facsimile of this threat (The War on Terror) failed. Moreover, a danger exists for a huge dollar crisis. At least, one should be prepared for the possible disastrous consequences for the nation as a whole.

This book is a must read for all those who want to understand the world we live in.

The Final Demystification of Supply-side Economics 2009-07-25

Reviewer: Herbert L Calhoun

This is a trenchant refutation of the accepted meanings and conventional understandings of the Chicago school of Reaganomics. It lays bare (and then to rest once and for all), the mythology of Uncle Milton's Chicago supply-side approach, an approach that has ruled the economic roost since Ronald Reagan's reign in the 1980s.

In Galbraith's view, Reaganomics, with its stripping away of regulations (that was finally completed during the GW Bush administration) has been a failed God that has turned our economic system into a capitalist wasteland and U.S. elites into a pampered greedy non-working leisure class that has learned how to live on the fruit of the land, that is on capital markets rather than on their own labor, and as a result have become predators on the rest of us.

Through weak kneed and greedy politicians, this protected class has become so fat on its own greed that it thinks nothing of killing the goose that laid the golden egg. After all it still has globalization to fall back on. And it seems that it finally did so during Bush II's reign. With obscene salaries that have no relationship to effort, efficiency, productivity or the bottom line, with perks and access that amounts to a grotesque twisting and perversion of our democracy, with offshore tax dodges, outsourcing and down-sizing, with barely transparent "bust-out" banking schemes price-fixing, stock sale collusions, and credit card usury rules that are so outrageous that they threaten the very vitality of our economic system; and with no one watching them, or to answer to, these demigods (with Congress as their co-conspirators), have perfected ways to repeatedly "game" the U.S. economic system and thus no longer have a need to be loyal to any one but their own pocketbooks -- and least of all to an abstract notion of the common national good. With no one, and nothing to hold them accountable, and loyalties only to the all mighty dollar (soon to be the all-mighty Yuan) they have set themselves up as a special protected-class who uses the lapdog Congress to write rules that are primarily designed to further enrich themselves.

Galbraith, in clear understandable language and great examples, gives us here a tutorial in modern economics fashioned along the lines of Torstein Veblen's "Theory of the Leisure Class," in which the predators "no longer work; they just hold office; perform rituals; enact deeds of honor and valor." Running up bank accounts is just what they do. It has nothing to do with work, productivity or efficiency or maintaining the health of the U.S. economy, it is just their way of keeping score. After all, as in George Orwell's Animal Farm some of us (the Predators) are more equal than others.

Galbraith's tutorial explains, by illustrating what went wrong, mostly during the Bush and Reagan years, how American workers have been consistently put in the politicians "trick bag" and then systematically led to the economic slaughterhouse floor so that they can be more easily fleeced by this protected class of economic predator, of which Bernard Madoff is just the tip of the iceberg. He shows in devastatingly clear examples why uncle Milton and his acolytes are wrong, and why we need to move beyond supply side to fix the problem.

Five Stars.

Thought provoking 2009-07-14

Reviewer: Alan Johnsey

Thought-provoking and eye-opening. Provides a perspective not often seen from modern economists. A book I will refer to again.

A mixed bag of searing analysis and thoughts gone 'rogue.' 2009-06-29

Reviewer: D. P. Jestic

[2.5 stars] What happened? The first 140 pages or so had me staring holes into the book at his wisdom, his on-target examples, and strong but reasoned approach. Then the wheels fell off. I'm not sure if he's simply a demagogue masquerading as an analytical observer or a deep thinker who gets off course, but the book makes you think, and is not a hard read.
He goes too long and hard on global warming. You have to step back to realize this may have little to do with documenting a 'predator state.' His mortgage loan argument vanishes when you realize PRIME mortgages also defaulted in large numbers, and that loss of income and a declining economy may have made significant contributions to the crisis. He tips his hand by laying the Katrina mess totally on Bush, neglecting to mention Gov. Blanco's impotence and Mayor Nagin's miscalculations. When Galbraith contradicted himself on NAFTA [beginning pg. 188], I figured he was just enjoying 'stirring the pot.' He should've turned the partisanship down a notch to maintain credibility, in my opinion.