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David Dodd

David Dodd is a Reader contributor. See staff page for published articles.

Corporate America Keeps Profits Strong, Jobs Weak

Re #12 - #18: First, I disagree that economists are up to no good and that economics isn't a science. Real, true economists don't do much predicting. They observe and often calculate based on known data. Whether or not this proves useful in any sort of speculation is left to investors and banks and Federal Reserves. Economists are a combination of historians and scientists, in a way. Good economists are very careful not to draw quick and easy conclusions. Regarding Japan, I'm not certain that Japan's off-loading of their electronics manufacturing had as much to do with their economic collapse as did their own housing bubble (as Don points out) and their own - often times more volatile than that of the U.S. - market strategies, where you had more money shorting the market to profit from a majority of investors who were invested long-term. The proof in the pudding might be that when Japan created their stimulus in response to the deflationary spiral they found themselves in, the money was specifically kept out of the market. In other words, they didn't simply increase the money supply, they sought to halt short-selling by keeping the money from investment and threw it directly at infrastructure. It didn't work. This isn't to say that it wasn't a sound idea, to keep the money away from the markets. However, empirically, I think it's easy to see that when what were once considered to be sound investments collapse under pressure from big money hedging against such investments, government involvement might be doomed in any case. Prop up the market, and you're inviting even more mischief from the upper 1% of wealth; keep the money out of the market, and the money may have no effect at all other than to (at some point) spark inflation.
— September 8, 2010 10:51 a.m.

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