I didn't say I was so smart. Doug's books, and LBO, are brilliant, and I was trying to say his review of Kuttner wasn't up to his usual standards of meticulous analysis replete with great graphs.
But I did also present an alternative analysis to the last 40 years of opining about why the New Deal, Bretton Woods, et. al, broke down around 1970.
It's because of needless war.
Since WWII (which I'm counting as "needed", mostly) we've spent vast resources, on needless war and militarism. Perhaps 100 Trillion in current dollars. Not only has this been stolen from civilian pursuits. War itself is destructive in many ways. It destroys hard power (including guns, soldiers, currency) and soft power (good relationships, the right kind of respect, etc.). People are focused on the wrong things, and "the right people" get richer at the expense of everyone else, or at least think they are.
Ironically, two actually defensive measures we spent money on (the highway system, and the internet) were actually good (if not without fault) investments. What if all the money had been spent so wisely?
So we now we have chronic, and perhaps incurable, Military Keynesianism. Which, to be fair to Keynes, isn't Keynesianism at all. It isn't countercyclical. And dare I say also that I think it matters where you funnel your added demand. If you funnel it to good things, in good ways, it pays off. If you funnel it to bad things, and in bad ways, it's worse than nothing at all. Chalmers Johnson's "Nemisis" gives a good sense of how bad it is. I myself have lived in military towns most of my life. And now the world is a US military town.
Now virtually all serious economists (mostly sycophants to power/capital IMO) point to something quite different, and ignore the elephant of war in the room. They say "the people" wanted too much (specifically, they say they wanted too low an unemployment rate...but hah, some of this has had to be revised recently). Even Bradford DeLong follows this line, and Doug seems to go along in his way.
Now, we're in the middle of another atrocious war as in the 1960's, with another economic meltdown staring us in the face, and once again economists are ignoring the elephant of war in the room. Many say it doesn't matter much. Huh? Current annual costs are about the same as the deficit. And that's not counting the massive long term costs (already estimated at 2 Trillion). And it's not counting the incredible "fixed" costs of our military industrial complex. Well over a half trillion a year. And I think just looking at these numbers is ignoring the things that aren't even counted, the good relationships, opportunity costs, etc. And what if it continues for another 100 years, as some have already suggested?
I think we'd be well on our way to Marx's Realm of Freedom now (no more "work") if it weren't for 63 years of needless war and extravagant militarism (not mentioning the needless militarism that came before that, even under FDR). Who would collect the garbage?
Robots of course. Now, instead, we have robots that drop bombs. It's all so sick. But it makes the "right people" think they're getting richer while actually we're all being destroyed by it in one way or another.
Needless war and militarism have brought down many nations and bankers.
Charles Peterson San Antonio, TX
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