Re:It’s time for a new, progressive supply-side economics
by specialist on Tuesday February 02, 2021 @11:55AM
(#26003372)
These pop-economics posts have arm waves treatments of cost disease, slowing productivity growth, growing inequity. Very unsatisfying. I'd prefer they wouldn't nod towards those issues without even making a guess to the root causes.
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Supply side is a "push" strategy. Top down, more or less. Monetarians, those who primarily see money as a commodity, prefer top down. They worry more about deficits and balances.
Demand side is a "pull" strategy. Bottom up, more or less. Fiscal-o-tarians (I forget the proper label), those who primarily see money as measure of value, prefer bottom up. They worry more about interest rates.
The period from The New Deal to the 70s was mostly demand side policies. It got out of whack. Then Reaganomics switched us to supply side policies. It too got out of whack.
The Correct Answer™ is some kind of hybrid. Balance the two forces. Ideally with automatic triggers (adjustments) to dynamically rebalance. Recognizing that policy making is too slow, automatic triggers will minimize recurring under- and oversteer.
Today, we need to shift emphasis from just deficits and inflation to also include interest rates. We must remain vigilant about unemployment. And we need better policies for productivity and inequity.
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Technology influences our mental models for how the world works.
In the West, Greeks gave us mind & body duality. Clocks made us imagine the Great Clockmaker in the Sky. Automata got us thinking we're all just machines.
And now the digital age. We're just computing and communication systems. Input, processing, output. Massive game-like simulations. Optimization algorithms with feedback loops. Transaction costs. Attention economy.
I definitely have an algorithmic view of humanity.
So here's my response to this "progressive supply side" OC:
We rebuild the economy, creating wealth, by keeping the money moving, by increasing the velocity of money.
Hoarding money suppresses wealth creation, increases inequity, and reduces productivity.
So The Correct Answer™ (today):
"Pull" more money thru the economy by giving money directly to people. Then recover that money thru taxes.
Implement complimentary policies to keep the money moving.
Tax idle wealth. Tax corporate profits, to restore prior levels of R&D and profit sharing (wages, benefits). Tax windfall profits.
My own notions are adjacent ("Yes, and...") to advocates for universal basic income (UBI) and modern monetary theory (MMT). Mostly, I think in algorithms and systems.
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Beyond the scope of this thesis:
Rebuild economy thru "caring work". All the stuff where people are helping others, creating new stuff, building a better world. Teachers, doctors, eldercare, police, firefighters, parenting, journalism, farming, etc, etc.
Disincentives for managerialism. All that wealth destroying middle management. The unnecessary work in financialization, public relations, advertising, project management, etc.
--
Supply side is a "push" strategy. Top down, more or less. Monetarians, those who primarily see money as a commodity, prefer top down. They worry more about deficits and balances.
Demand side is a "pull" strategy. Bottom up, more or less. Fiscal-o-tarians (I forget the proper label), those who primarily see money as measure of value, prefer bottom up. They worry more about interest rates.
The period from The New Deal to the 70s was mostly demand side policies. It got out of whack. Then Reaganomics switched us to supply side policies. It too got out of whack.
The Correct Answer™ is some kind of hybrid. Balance the two forces. Ideally with automatic triggers (adjustments) to dynamically rebalance. Recognizing that policy making is too slow, automatic triggers will minimize recurring under- and oversteer.
Today, we need to shift emphasis from just deficits and inflation to also include interest rates. We must remain vigilant about unemployment. And we need better policies for productivity and inequity.
--
Technology influences our mental models for how the world works.
In the West, Greeks gave us mind & body duality. Clocks made us imagine the Great Clockmaker in the Sky. Automata got us thinking we're all just machines.
And now the digital age. We're just computing and communication systems. Input, processing, output. Massive game-like simulations. Optimization algorithms with feedback loops. Transaction costs. Attention economy.
I definitely have an algorithmic view of humanity.
So here's my response to this "progressive supply side" OC:
We rebuild the economy, creating wealth, by keeping the money moving, by increasing the velocity of money.
Hoarding money suppresses wealth creation, increases inequity, and reduces productivity.
So The Correct Answer™ (today):
"Pull" more money thru the economy by giving money directly to people. Then recover that money thru taxes.
Implement complimentary policies to keep the money moving.
Tax idle wealth. Tax corporate profits, to restore prior levels of R&D and profit sharing (wages, benefits). Tax windfall profits.
My own notions are adjacent ("Yes, and...") to advocates for universal basic income (UBI) and modern monetary theory (MMT). Mostly, I think in algorithms and systems.
--
Beyond the scope of this thesis:
Rebuild economy thru "caring work". All the stuff where people are helping others, creating new stuff, building a better world. Teachers, doctors, eldercare, police, firefighters, parenting, journalism, farming, etc, etc.
Disincentives for managerialism. All that wealth destroying middle management. The unnecessary work in financialization, public relations, advertising, project management, etc.
h/t David Graeber and many others