Tuesday, June 30, 2009

Bernanke, job growth, healthcare, and fairness

FreeExchange voices their support of Bernanke. I think there hasn't been enough air time given to exactly what he has done and how it has helped the economy in the past year. In a similar vein, the NY Fed has provided a timeline of the financial crisis.

Michael Mandel reports on job growth over the past ten years. The graphs certainly do highlight the stark picture. Outside of healthcare, education, and the government, no sector has grown. Wow.

Donald Marron says that health is an R&D problem. There are a variety of problems with the current system, and a variety of solutions, and we're not sure how effective each solution would be. Marron seems to think we should take baby steps, and evaluate the progress of solutions as we go. An economist who wants more data? Shocking.

Fairness in economics. National economic policy isn't based solely on economic principles, nor are traditional mathematic economic principles the only factors that affect the economy. How people feel about their individual situations also affects their economic behaviors, including how fair they feel they are being treated. In short, we should take some lessons from sociology and psychology. Of course, this harkens back to a famous Keynes quote:
"The study of economics does not seem to require any specialized gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy or pure science? An easy subject at which few excel! The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature of his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near to earth as a politician."

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