NP Bush Economics after 9/11

[Paul Mackin]

----- Original Message -----
From: "Terrance" <lycidas2 at earthlink.net>
To: <pynchon-l at waste.org>
Sent: Thursday, October 25, 2001 9:02 AM
Subject: Re: NP Bush Economics after 9/11


> For some time now we have been thinking that Mr. Greenspan can cut
> interest rates and use his other money tools to keep the economy out of
> recession while keeping inflation under control. But what if Greenspan
> cuts interest rates to zero and nothing happens?
> What if the free market free falls? Jobs are being lost by the thousands
> almost every day. Insurance costs are skyrocketing. Free trade is bogged
> down at the boaders and backlogged in factories and plants. People are
> very nervous and christmas is coming and people are not shopping.
> Bush seems to think that the President can influence the economy too.
> Not by some designed war economy, but by cutting taxes again. And,
> perhaps a little voodoo? Yes, spending. Lots of this spending is not
> going to stimulate the economy, but in the wake of attacks, it's needed.
> But what do the Europeans think of this evildoodoo economics?
>
> http://www.nytimes.com/2001/10/25/business/worldbusiness/25EURO.html

Not a European but can't help responding.
"evildoodoo economics"
Haven't heard that before but it's perfect if only because the elder Bush
once used the term "voodoo economics" to describe the Reagan infatuation
with so called "supply side economics" and its chief tool of implementation
namely large tax cuts for the well off which of course is what the younger
Bush has advocated all along and now has a palpable Evil in the world he
can't fail to hope might help him advance his tax cutting agenda.

All of which is totally beside the present point. Bush will continue to be
Bush. This does not erode in the least my own and most other Americans'
support for what his Administration is trying to do to prevent future
terrorist attacks. The rhetoric may stink and the attempts to get future tax
cuts may be unseemly but so be it.

As for the NYTimes article it does like most Times articles contain much
useful information, in this case about serious problems that are presently
facing European economies. The American input is sort of a grabber. Adds to
reader interest. But countries will do what they need to do.

America has always used public funds to subsidize certain industries and
activities. Finding the right balance between this and pure competition has
always been the problem and success has often been fleeting. Keynesianism
(The General Theory of Employment, Interest and Money, 1935) modified the
classical doctines of economics. Keynesian has to do with the policy of
governments dealing directly with the business cycle, of pumping money and
credit into an economic system when the cycle threatens to turn downward,
and of then lessening this infusion when the cycle moves upward. In American
economic thinking there is always a tension between Keynesianisn  and the
pure competition ideas of people such as Milton Freedman.

On the question of Bayer. If $4 a pill is justified to recoup the cost of
developing Cipro then $1 a pill is justified also. Under conditions of wide
spread use of the product as much (and probably much more) profit will
surely accrue.
Hope that's not coocoo economics.

        P.