I heard yesterday that several of Atlantic Citys casino / resorts are being closed down or sold off at the end of this summer season. It has the potential to layoff about 7K people. It is a sign of reduced tourism and reduced ability of folks to spend money, perhaps still suffering from high mortgage payments, low wages, and a sluggish post collapse economy. In past I posted a back of envelope calculation that the stimulus or loan provided to Main St. was about 1/4th what it should have been. Paul Krugman calculated that it was about 1/3rd what it should have been. Currently, nobel prize winning top economist Paul Krugman has been saying that our Feds target for inflation is too low at 2%. He says it should be 4% which is about what it was during Reagans years. This is a serious intellectual disconnect that really hits Main St. A 4% inflation target at this time would help the economy a lot and also reduce the debt/GDP ratio. As the keepers of whats called world reserve currency, we have a responsibility to the rest of the world to manage it in a way that keeps our economy healthy. Our economy is 10X as big as Chinas so both they and us should not worry too much about making our currency worthless by inflating it too much. This is about flying a pretty complex plane that depends on a smart pilot to fly it. Paul Krugman and his buddies are the smartest economic pilots in the world. We need to fly the plane in a way that they like or else well crash or be stuck in the slow lane of mud for longer than is needed. We need to accept the modern responsibility of managing our monetary system in effective ways that help maximize both employment and price stability. After a worldwide collapse in confidence related to mistakes by our past politicians on both sides, our wealthy high finance folks and their regulators, it is time for all of them to support a bit less price stability in order to juice up Main Streets employment recovery curve. A revamp of social programs to be more effective would be good to do as well. Instead of just forking over cash for our needy we could have a Good Jobs for All program that forked over a combo of cash and good jobs for our needy. Each benefit package tailored to the abilities of each person. Each good job arranged for in the zero pay or under paid community, environment or household economy sectors carefully monitored as it starts up with a view toward using the evidence of good work done as the means to quickly market the individual into the private marketplace. Big Banks got their recovery loan. Big Auto got their recovery loan. The question now is: When will Main St. get its recovery loan?
Posted on: Mon, 21 Jul 2014 11:13:06 +0000
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