tag:blogger.com,1999:blog-7336648542166394110.post5286466802342910016..comments2023-06-05T08:10:46.298-07:00Comments on Edward.Hugh.Blog: The Long And Difficult Road To Wage Cuts As An Alternative To DevaluationUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7336648542166394110.post-20856255018696049992009-01-28T23:51:00.000-08:002009-01-28T23:51:00.000-08:00"Anyway, one thing that you economists fail to add..."Anyway, one thing that you economists fail to address is that the last decade saw increasing gap between the haves and have nots."<BR/><BR/>Yep. You are right. As an economist I don't address it since the issues involved are not part of my competence, and anyway (simply as an economist strictue sensu) I do not think they are that important. That is, I don't think the people at the top work that much harder, and that much better, simply becuase they have more financial incentive.<BR/><BR/>Indeed, being very heretical, I don't even think that most people take most of the really important and interesting decisions in their lives for economic reasons. Or, to qualify, some people take many decisions (too many for me) for economic reasons, but this is because they have taken a *prior* and non-economically-grounded decision to do so. ie materialism can be a kind of surrogate religion.<BR/><BR/>But all this is off the point. As an economist I try to stay out of all this - ie be non normative - and simply talk about what I think I know something about (politics would be the same case). It isn't that I don't have opinions, but that I don't think my opinions have any importance, since I am just as likely to get it wrong as anyone else. <BR/><BR/>So, what I am arguing is that cost competitiveness is important if you want a certain standard of living (of course, if you don't want it, then cc isn't so important). It becomes even more important when you have accumulated debts to give you an standard of living and you have to square the circle.<BR/><BR/>Of course you can resolve some of the issue by productivity, but you need to be able to achieve that and not just talk about achieving it, some of the adjustment can come from devaluation, and some - I think there is no alternative - by cutting back on your standard of living.<BR/><BR/>How this burden is then distributed is not an economic question, but a political and social one, which is up to the respective parties to decide via the normal democratic processes. The only thing I would just say is that I would tend to steer clear of increasing consumption taxes in times of recession etc, and I would avoid head-count type payroll taxes when you need to create jobs.<BR/><BR/>Cheers,<BR/><BR/>EdwardEdward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-7336648542166394110.post-60177718659290791072009-01-28T15:37:00.000-08:002009-01-28T15:37:00.000-08:00Very interesting article, Edward. We in Australia ...Very interesting article, Edward. We in Australia are hopefully in a better position. However, our dollar has dropped quite sharply in the last few months without much fuss. We are used to large fluctuations.<BR/><BR/>Anyway, one thing that you economists fail to address is that the last decade saw increasing gap between the haves and have nots. Now when the bad times come, the have nots are asked to take sacrifices. Not the other side. The US Senate makes Citibank to cancell the order for a new corporate jet, but these are only window dressing gestures.<BR/><BR/>If wages and salaries have to be cut, there must be increased taxes for high income earners, and possibly even some sort of wealth tax. I think there is enough money in most economies, but it is in the wrong pockets.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7336648542166394110.post-40365010651642356082009-01-23T13:34:00.000-08:002009-01-23T13:34:00.000-08:00Hi Andrei,"If you only limit the use of brackets a...Hi Andrei,<BR/><BR/>"If you only limit the use of brackets and end sentences before they get to the third line,"<BR/><BR/>Thanks. I think you are right to make this point, and I will try to keep it in mind, I promise.<BR/><BR/>Cheers,<BR/><BR/>EdwardEdward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-7336648542166394110.post-46906930937092646372009-01-23T10:57:00.000-08:002009-01-23T10:57:00.000-08:00Mr. Hugh,You sure write thoughtful columns. Shows ...Mr. Hugh,<BR/><BR/>You sure write thoughtful columns. Shows your vast knowledge. However, the branching language of your reports could be pruned to cater to your readers. If you only limit the use of brackets and end sentences before they get to the third line, you'll be just as quotable (and popular) as Paul Kruegman. Really.anvorhttps://www.blogger.com/profile/04208262589221708875noreply@blogger.com