>Remember that I (and a lot of other fiscally-orthodox Dems) are
>capital fetishists: believers in large positive externalities from
>investment through learning-by-doing, learning-by-using, and
>worker-employer quasi-rent sharing. Thus a low national savings rate
>terrifies us.
>
>Thus we favor the policy mix proposed by Robert Solow back in the
>early 1960s: tight fiscal policy (to boost national savings); a
>redistributive tax system (to level out the distribution of income
>and create large fiscal automatic stabilizers); loose monetary
>policy on average (to counteract the tight fiscal policy); and
>delegation of the bulk of stabilization policy to the Federal
>Reserve.
But what Dems are pushing a redistributive tax system? They're supporting fiscal orthodoxy without the rest of your agenda.
>Of course, this requires that (a) the Federal Reserve be competent,
>(b) the Federal Reserve have a sound and accurate view of what
>"maximum employment and purchasing power without accelerating
>inflation" means, and (c) the economy not have gotten itself so
>wedged that monetary policy is ineffective.
The Fed has been very competent for decades, if you buy the Kaleckian analysis of their role.
Doug