Showing posts with label Anaphylaxis. Show all posts
Showing posts with label Anaphylaxis. Show all posts

Tuesday, February 25, 2014

Keynes and Hayek A Go Go

A recent discussion in comments reminded me of this piece from a while back that I never posted. There were a couple of good points in it.

The problem with the Hayekian position is that it’s relentlessly negative: spending doesn’t work, stimulus doesn’t work, all we can do is suffer a nasty bout of deflation and trust in the invisible hand to eventually get us back to work again. 

Right. Then, there was this highly familiar point...

For the Hayekians, the Manhattan Institute’s Diana Furchtgott-Roth was particularly revealing: she would take a question about rescuing the financial system and duck it by talking about how rescuing the auto industry was a bad idea. Or she would ridicule high-speed rail by saying that no one wants to take the train from New York to L.A.—a route that precisely no one is proposing. In other words, the Hayekians were more comfortable with straw men than with messy reality. 

Pretty much sums up every discussion I've every had with these sorts of folks. 

But I remembered that the main reason why I didn't is that is seemed far too bipolar. The answer isn't always simply "Keynes" or "Hayek." In fact, in the current age of globalization, neither fully apply. I've always been one to take a more constructivist approach to any issue of the day. New ideas that are people driven, not "school of thought" driven. For example, both liberalism and realism completely failed to predict the collapse of the Soviet Union. They didn't figure that Gorbachev would simply give up and call it a day. Is there an economist out there or world leader who will finally leave behind both Keynsian economics as well as the theories of Friedrich Hayek? In my view, it's long overdue. How does one stimulate aggregate demand when we have a world economy? This implies that all of the world's governments would have to act in concert to achieve this end and, given the reality of the international stage and conflicting interests, this hardly seems likely.

And there are far too many misconceptions about John Maynard Keynes that have sadly taken root. The thing that people forget about Keynes is that only called for increased government spending in times of contraction. When economies were doing well, he did call for austerity and reduced spending. The anti-spending anaphylactics tend to forget that. These same people also forget that Ronald Reagan was a Keynsian by both cutting taxes (which increases aggregate demand) and increasing spending. "I'm not worried about the deficit. It's big enough to take care of itself," he once quipped. Richard Nixon famously said, "We are all Keynsians now" and, to a certain extent, he was right.

My biggest beef with Hayekians is that can't point to a real world example of how his theories work in practice. Like the libertarian fantasists, where was the utopia of which they dream? How would it work today, given globalization? Certainly, they can point to austerity measures taken during boom times but that's honestly Keynes, not Hayek. The reality is Hayekians just don't like the government. Their emotions about it have clouded their judgment and inhibited them from seeing that different circumstances dictate different paths of solutions.

Sometimes you can't plug a square peg into a round hole. Shocking, I know!

Thursday, January 20, 2011

They Ain't Listening Either

A while back, I wrote a piece about how the military is ignoring the anaphylaxis of climate change skeptics and pursuing a core strategy of going green. To keep up with all the latest and greatest at the DoD and their green endeavors, check out this link. Pretty cool, huh? Man, they've got a lot going on there!

A recent column in the Minneapolis Star and Tribune shows that there is another segment of our society that isn't listening to the climate change skeptics either: Business.

Problem is, for the skeptics -- business leaders didn't get the memo.Business isn't waiting for politicians to act. Sustainability has moved from the tributaries of society into the mainstream of commerce. CEOs "have a number of stakeholders that are pushing them in this direction," says B. Andrew Brown, partner and regulatory affairs department head at Dorsey & Whitney LLP. "Customers, investors, employees, even banks and insurance companies." 

Management is learning that an embrace of sustainability is a rich strategy in an intensely competitive global economy. It offers another approach to risk management (just ask Mattel's management about the cost of recalling millions of toys manufactured in China and tainted with toxic lead paint).It's also a way to lower costs and boost efficiency.

Many of my regular readers know that I spend a fair amount of time ripping the business community. I have to admit that this article was a welcome surprise and is, without a doubt, another example of my happiness (dare I say glee?) at being wrong. So who are these companies embracing this new core strategy?

Take Wal-Mart, the controversial retail giant. Five years ago, then chief executive Lee Scott launched Sustainability 360 with three major goals: Using 100 percent renewable energy, creating zero waste and selling sustainable products. With 2005 as its baseline, for instance, a Sustainability 360 goal was to hike fleet fuel efficiency by 25 percent by October 2008. It rose 38 percent instead, cutting greenhouse gas emissions by 200,000 tons a year and saving the firm more than $200 million a year. That's real money, even for a behemoth like Wal-Mart.

I've never been a fan of Wal Mart but you have to give them props for this. Wow.

Who else?

Sustainability is a driver of innovation within companies like Dow Chemical and General Electric, creating new markets and profit centers. Silicon Valley entrepreneurs are betting big with an eye toward earning a payoff from clean-tech innovations.

Global investment in clean energy of all kinds rose from $46 billion in 2004 to $200 billion in 2010.

As I have been saying all along, there's a lot of money to be made in green tech and it looks like we have a lot of private businesses paying attention.

The best part about all of this, though, is how the free market is actually leading the way. The article's overall tone is that business isn't going to wait for government to come up with a solution. Honestly, they'll be waiting a long time as long as the current form of the GOP is around although it is pretty hilarious to see that not admitting fault/winning the argument trumps making money with them and their supporters. I guess I was wrong about money being the most important thing to them. Clearly, it's pride.

So that's two things I'm wrong about. Seriously stunning.....:)