Just back from Ecuador, which just happens to have been the world's largest exporter of bananas since the late 1940s, although oil has been ahead of that popular fruit since the late 60s in export earnings (mangoes, shrimp, flowers, and Panama hats [originally from Ecuador] are other biggies). Since full independence in 1830, the country has had 22 constitutions, the most recent apopted in 2006, and numerous military coups. Between 1997 and 2006, the place had seven presidents and a major financial crash that led to dollarization of the economy (although the coins continue to have Ecuadorian figures on them, except for the popular use of the Sacajewea US dollar coin).
In 2006, charismatic economist, Rafael Correa, was elected president and has been reelected since. He has recently been having referenda on allowing him greater control over the media and judiciary and had Hugo Chavez in the week prior to my being there. He claims to chart a course between Chavez and Brazil's Lula, but has made no moves to de-dollarize and is reportedly close to the Catholic Church.
However, the military remains the most powerful entity in the country, reputedly owning many businesses and prior to 1995 receiving half the oil revenues directly. On this past September 30, police were demonstrating against budget cuts proposed by Correa. He went to speak with them, but ended up confined in a hospital by demonstrating police. The military came in and fought with the police, resulting in nine dead and many more injured. The military is now more openly calling the shots.
Many have commented that the US has two paths it can go: more in a European direction or more in a Latin American direction. With our accelerating inequality, our increasing partisanship leading to a breakdown of the ability of established institutions to make decisions (will the Congress really raise the debt ceiling while cutting $2 trillion in spending without raising taxes or will we just default as many seem to want?), the longer term trends in the US may well be leading us to a point where many may despair of democratic decisionmaking processes and long for a "strong hand" to fix up our messes for us. This was the sort of thing that went on in the 30s, and if things do not pick up reasonably soon, the more unpleasant voices may gain strength.
People preferred Reagan. Without the Reagan tax rate cuts the real growth would have been a lot lower.
ReplyDeleteThe Great Inflation came from experiments around the floating dollar that had decades-long effects. The Democratic strategy of pumping fluids into the New Deal to make it look alive didn't work and Reagan won.
Re: "Without the Reagan tax rate cuts the real growth would have been a lot lower."
ReplyDeleteWhere's the evidence of this, wellbasically?
Yes, "wellbascially" where is the evidence for your your little morality play? Actually, it was a fellow named Nixon, encouraged by another fellow you may have heard of, Milton Friedman, who "floated" the dollar, took away the last links to the Gold standard, and tore up Lord Keynes's Bretton Woods fixed exchange rate regime. As for the 1980s, well, 1980 - 1982 double dip recessions were intentional caused by Fed policy, chiefly by President Carter's appointee Paul Volker. When Volker changed policy in late 1982 when he saw inflation had changed to disinflation, the economy smartly bounced back, somewhat helped by Reagan's military Keynsianism (sharp tax cuts and the Regan Military buildup, where most of the spending went out in 1983-84). But there was no Reagan miracle. http://krugman.blogs.nytimes.com/2011/06/22/reagan-and-revenues/
ReplyDeleteI offer 4 "pictures": The first two are "causal". They show what _CAUSED_ the variations in the economy during the "Reagan era". The second two show the results of these causal factors coupled with Republican tax cutting stupidity.
ReplyDeletehttp://www.greatervoice.org/econ/data/Newyeilds._html_2aaf0d1c.jpg
http://www.wtrg.com/oil_graphs/oilprice1947.gif
The second two pictures are the results of the first two along with the tax cuts.
ReplyDeletehttp://www.greatervoice.org/econ/data/OnBudget.html
http://zfacts.com/p/318.html