MORE ON FRIEDMAN AND LAFFER: Is Bernanke Playing Politics? - Barrons.com
Somehow all of this opposite approach (of Zandi and Taylor) to the economy reminds me of Milton Friedman and Art Laffer.
Laffer points to the increasing taxes Democrats pushed through in the 1930's as an inhibitor to economic growth. Back in the 70's, Friedman focused on the impact of tight money.
We've now shown that loose money, in the face of (- if not immediate higher taxes) higher government spending and massive borrowing, can't counter the effects of poor fiscal policy.
Thus, it would seem as though Laffer is vindicated by empirical evidence (i.e. the economy isn't doing very well and we may well have a 1937/8 downturn next year).
One would hope that advocates of big government and high taxes would reconsider their modus operandi; but, evidence isn't pointing that way.
One does wonder if the electorate would rather listen to pablum from the pols like Obama or really find a change (and, whether the Republicans or a third party might be needed to bring about such a change)?
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