Comments on: So Where Is Obama’s Keynesian Multiplier?

By: Gavino

Gavino — Mon, 19 Jul 2010 16:32:08 +0000

Great comments. Perhaps we should start a campaign to get people from all around the world to send copies of Free to Choose to the president for Christmas. Not that he celebrates Christmas, of course… Bill Clinton reduced the level of capital Fannie and Freddie needed relative to loans AND required half of their mortages to be for low and moderate income families. President Bush tried to regulate them in 2005 with the support of Greenspan who warned that they posed a risk to the global financial system. The Dems said no. (See The Great Money Binge by George Melloan for a detailed account). The new financial bill doesn’t address Fannie and Freddie.

By: Boz

Boz — Fri, 16 Jul 2010 20:47:44 +0000

“In the name of providing affordable housing, lenders had been compelled by Congress to provide mortgages to people who otherwise would not have qualified for them – a market distortion – and had packaged these loans and sold them on as mortgage-backed securities to spread the financial risk.” Wasn’t this a Clinton policy initiative? Not the repackaging of course, which was the markets’ move to offload politically inspired potential (and actual) bad debt. It just shows that social engineering with fiscal bullying can produce a situation worse than the starting point. Has the successor Democrat President picked up on this point?

By: Dancer

Dancer — Fri, 16 Jul 2010 13:14:26 +0000

The models the Obama Administration use are similar to the “global warming” models – pure conjecture! You’ve convinced me that Keynes is being used to justify very bad fiscal and economic behavior!

By: JoeB

JoeB — Fri, 16 Jul 2010 13:12:19 +0000

Someone needs to send President Obama a copy of Milton Friedman’s book “Free to Choose.” The theories of Friedman are the antithesis to Keynes’. This video featuring Dr. Friedman documents the rise of the government welfare state and is eerily prescient of where we find ourselves today. http://video.google.com/videoplay?docid=5374242425247995227&q=Milton+Friedman+Free+to+choose+duration%3Along&total=15&start=10&num=10&so=0&type=search&plindex=0#
One key element of today’s economy that wasn’t present in the 30s is the huge public sector unions. These unions hold huge sway within the Democratic Party and have been a key force in expanding the role of the government. I’m curious how many of the jobs supposedly created or saved were public sector jobs.
The rise of Tea Party is a manifestation of the frustration that the middle class is feeling from the burden of high taxes that don’t result in an enhancement in their standard of living.