How to Fix Social Security Jude Wanniski February 2, 2005

From:Jude Wanniski jwanniski@polyconomics.com
To: James K. Galbraith <galbraith@* * * * *.edu>
Re: How to Fix Social Security
On Wed, 02 Feb 2005 18:20:30 -0500
Jude Wanniski <jwanniski@polyconomics.com> wrote:

At 05:43 PM 2/2/2005, you wrote:

True, I don't buy into your view of the "capital/labor ratio."  The secret to strong growth is full employment, not necessarily a high investment share. (In the Soviet Union, it was around 40 percent, and look what it got them.)

Your comparison with the USSR is ridiculous and you know it. Or at least I hope you do, if you really have a PhD in economics. The USSR destroyed itself by SUBSIDIZING capital. There was no market allocation of capital, so Kremlin planners who needed 100,000 tractors would have to build factories capable of producing 200,000 tractors, so one could cannibalize spare parts from the other. But you knew that. What do you take me for, a rube? As for not buying my view of the capital/labor ratio, all I have done is state an axiom. You cannot not buy it, unless you are willing to go on the record as to how we can go from three workers supporting a senior to two workers supporting a senior without increasing the capital/labor ration by 50%. If you can agree that the squares on two sides of a triangle equal the square on the hypotenuse, you must agree with me on this economic axiom.  If not, I will ask you for your father's e-mail address to chide him for the blockheadedness of his kid economist.  JW

I sent you my take on the world monetary order a while back, and got silence!

Send it again, Jamie. I don't remember getting it. Or if I did look at it, I must have been so discouraged that I decided not to reply at the moment. But I should take the time to reply, so send it again.  JW

As for Howard Dean, you must know I was all for him because of his antiwar stance, but beyond that, he was a nitwit on national economic policy. For goodness sakes, he is a global-warming nut. I expect him to stomp all over his pud and be forced to resign.

As for rounding up my friends, I don't have very many, but will make a serious effort with Dr. Dean.  I *think* his election could prove a useful turning point in shaking up the intellectual sclerosis of the Democratic Party.  We will see.

Jamie

On Wed, 02 Feb 2005 17:41:54 -0500, Jude Wanniski <jwanniski@polyconomics.com> wrote:

You are of course absolutely right. But when do you round up your friends to back those policies? I'm afraid you have cold feet when it comes to seriously addressing the capital/labor ratio. Or a new gold-based Bretton Woods. Huh?  JW

At 04:50 PM 2/2/2005, you wrote:

If what you say about a policy to produce higher growth is true, then of course there's no need to do anything to Social Security.

Best,  James G.