The American Right and Anti-Intellectualism

[Mr Khan]

badgenome said:

Mr Khan said:

Given America's reliance on the consumption sector, Keynesian ideas are all the more important: people with less income buy things, whereas excess income is saved or invested.

Isn't that a problem? Japan has traditionally been a nation of savers (though that's less the case now) and while it's caused some problems (which their  government exacerbated in masterful fashion), I think it's still far preferable to being a nation of overconsumers. It's peculiar to me that people only seem to fret about consumption in that environmentalist "the Earth is running out of resources" way, but never really in a "is an economy that's based on people consuming more than they produce really anything more than a giant bubble?" way.

I don't agree with Keynesian theory, but Krugman was a lot saner before Bush caused him to flip his lid. From time to time I like to amuse myself by comparing his writings as an economist in the '90s to his screeds in the Times today. I even made a drinking game out of it: I read one of his articles and then I drink until I pass out.

Cultural preferences do factor in, as Japan is a nation of savers (and even more problematically, they like to Save in straight cash, a Japanese version of what in America is literally mattress money, so they don't even provide money for the banks to lend. And the Japanese are, for all their obedience to rules, fairly good at dodging the income tax in a way that the tax-averse Americans wouldn't dream of, despite the fact that the Japanese tax bureau has more of an ability to suck funds straight out of your bank account than the IRS).