Thursday, November 20, 2008

On Samuelson

The great Paul Samuelson, November 2008:
Such systems [ed: "unregulated" free markets] cannot regulate themselves, either micro-economically or macro-economically. Wherever tried they systematically breed intolerable inequalities. And instead of such inequality being the necessary price to encourage dynamic progress via technological and managerial innovations, it instead breeds dysfunctional shortfalls in what economists call "total factor productivity."

Convincing proof of these points can be found in the deterioration in the US from 2001 to 2008.
The great Paul Samuelson, 1989:
The Soviet Economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.
An anonymous commenter on Kids Prefer Cheese, in response to the above:
Paul is not so much with the R-square.
Hat tips to Angus and Tyler Cowen.


Blogger Chetan said...

This is like Ricky Ponting lashing out at 'socialist' Gavaskar who repremanded them after a series defeat.

Gavaskar was not even playing!

The fact is that the self-regulating Aussies are smarting that Gavaskar gets to blame their arrogance and tease them for their juvenile antics on the standard they themselves established; that of intent Vs. consequence.

Gavaskar does not even need to go into Aussie attitude in 1980s. He can just quote Greenspan from 2008 to make his point:

"Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity -- myself especially -- are in a state of shocked disbelief."

“I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

And while you are moping, here is something to cheer you up.

1:50 AM  
Blogger Kunal said...

Dear Chetan,
Comparing persons with differing views on regulation to the Australian cricket team is a really low trick, and is not in keeping with the level of discourse on this blog. Please refrain from such vile and baseless comparisons in the future. This is, after all, a family blog.

Thank you.

3:23 AM  
Blogger Ashutosh said...

Samuelson's quip pales in comparison to the utter incompetence of the CIA in predicting the death of the Soviet Union and its economic collapse. What is appalling is that the CIA could have remedied its ignorance and known the truth by a simple reading of newspapers in the country and by touring the cities and villages of the dying state. Instead the CIA simply took the Soviet officials' pronouncements at face value and added or subtracted a percent from their economic forecasts before disseminating information in official reports. At one point, CNN was doing a better job gathering true 'intelligence' than the CIA. And guess who was one of the chief 'experts' on the Soviet Union at this point; Robert Gates, then deputy NSA for Bush. Gates, the current SecDef who had not even set foot inside the Union and was buying these intelligence reports hook, line and sinker.

9:57 PM  
Blogger Kunal said...

Ashutosh, I wouldn't be surprised if it went beyond mere incompetence. According to Gates' Wikipedia entry, there is suspicion that the CIA (under Gates) actively concocted evidence to show that the USSR was stronger than it was, in order to portray the Sovs as a bigger threat than they actually were.

1:36 PM  
Blogger Ashutosh said...

Now why doesn't that surprise me! Threat inflation after all has been the favourite pastime of all neocons for fifty years, from Soviet ICBMS to Iraqi WMDs. Let the good times flow.

12:04 PM  

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