>If this keeps up it's going to make Alan Greenspan really really mad.
>Time for the periodic citation of Kalecki's "Political Aspects of
>Full Employment":
>
>>In the slump, either under the pressure of the masses, or even
>>without it, public investment financed by borrowing will be
>>undertaken to prevent large-scale unemployment. But if attempts are
>>made to apply this method in order to maintain the high level of
>>employment reached in the subsequent boom, strong opposition by
>>business leaders is likely to be encountered. As has already been
>>argued, lasting full employment is not at all to their liking. The
>>workers would 'get out of hand' and the 'captains of industry' would
>>be anxious to 'teach them a lesson.' Moreover, the price increase in
>>the upswing is to the disadvantage of small and big rentiers, and
>>makes them 'boom-tired.'
>>
>>In this situation a powerful alliance is likely to be formed between
>>big business and rentier interests, and they would probably find
>>more than one economist to declare that the situation was manifestly
>>unsound. The pressure of all these forces, and in particular of big
>>business-as a rule influential in government departments-would most
>>probably induce the government to return to the orthodox policy of
>>cutting down the budget deficit. A slump would follow in which
>>government spending policy would again come into its own.
>>
>>This pattern of a political business cycle is not entirely
>>conjectural; something very similar happened in the USA in 1937-8.
>>The breakdown of the boom in the second half of 1937 was actually
>>due to the drastic reduction of the budget deficit. On the other
>>hand, in the acute slump that followed the government promptly
>>reverted to a spending policy.
>>
>>The regime of the political business cycle would be an artificial
>>restoration of the position as it existed in nineteenth-century
>>capitalism. Full employment would be reached only at the top of the
>>boom, but slumps would be relatively mild and short-lived.
>--
>
>Doug Henwood
>Left Business Observer
>250 W 85 St
>New York NY 10024-3217 USA
>+1-212-741-9852 voice +1-212-807-9152 fax
>email: <mailto:dhenwood at panix.com>
>web: <http://www.panix.com/~dhenwood/LBO_home.html>