December 14th, 2008

fortuna

post-industrial economy and unemployment

Things that suggest trouble ahead:
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5. The fact that our economy is post-industrial, and traditional Keynesian economics does not take that into account. I still cannot picture unemployed investment bankers joining road-repair crews.
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The worst of all possible worlds would be every country following our protectionist lead. The auto bailout is, if you think about it, the modern equivalent of the Smoot-Hawley tariff. If other countries retaliate by protecting their own precious domestic industries, that is the equivalent of a trade war.

"The Economic Outlook", by Arnold Kling