US economy: les volatile

Edwin Dickens edickens at DREW.EDU
Wed Oct 6 13:27:13 PDT 1999


Brad DeLong wrote:


>I see three periods:


>{i) one of successful counter-cyclical stabilization from 1948 to 1966 >or so...

What evidence is there that the government--and especially the Federal Reserve--tried to stabilize the economy during this period? It seems to me that the Fed in particular was more concerned with class conflict and bank profits.


>(ii) one of breakdown--caused by Keynesian hubris, the macroeconomic >impact of the Vietnam War, Richard Nixon's political business cycle, or >OPEC, take your pick--from 1967 to 1983.

A smorgasbord approach to economic history? Rather than these distracting tidbits, what about class struggele, a falling rate of profit and an obsolete social structure of accumulation?


>(iii) a resumption of counter-cyclical stabilization policy--with fewer >claims made for it--by Volcker and Greenspan after the Volcker >depression. What are Greespan's massive monetary injection in late >1987, Greenspan's pushing of short-term real interest rates below zero >in 1992, or Greenspan's "preemptive strikes" against inflation in 1994 >and subsequently but counter-cyclical stabilization policy?

Acting as lender of last resort? Bailing out the banks? And an example of the dangers of authoritarian government? respectively.

Edwin (Tom) Dickens



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