Virtually Speaking, Liberally: What We Believe January 29, 2011

More background content for today’s discussion:

Brad deLong (2011):

My name is Brad DeLong.

I am a Rubinite, a Greenspanist, a neoliberal, a neoclassical economist.

I stand here repentant.

I take my task to be a serious person and to set out all the things I believed in three or four years ago that now appear to be wrong. I find this distressing, for I had thought that I had known what my personal analytical nadir was and I thought that it was long ago behind me

I had thought my personal analytical nadir had come in the Treasury, when I wrote a few memos about how Rudi Dornbusch was wrong in thinking that the Mexican peso was overvalued. The coming of NAFTA would give Mexico guaranteed tariff free access to the largest consumer market in the world. That would produce a capital inflow boom in Mexico. And so, I argued, the peso was likely to appreciate rather than the depreciate in the aftermath of NAFTA.

What I missed back in 1994 was, of course, that while there were many US corporations that wanted to use Mexico’s access to the US market and so locate the unskilled labor parts of their value chains south, there were rather more rich people in Mexico who wanted to move their assets north. NAFTA not only gave Mexico guaranteed tariff free access to the largest consumer market in the world, it also gave US financial institutions guaranteed access to the savings of Mexicans. And it was this tidal wave of anticipatory capital flight–by people who feared the ballots might be honestly counted the next time Cuohtemac Cardenas ran for President–that overwhelmed the move south of capital seeking to build factories and pushed down the peso in the crisis of 1994-95.

I had thought that was my worst analytical moment.

I think the past three years have been even worse.

Howard Dean (2003):

What I want to know is why in the world the Democratic party leadership is supporting the president’s unilateral attack on Iraq.  [cheers, applause].

What I want to know is why are Democratic party leaders supporting tax cuts.  The question is not how big the tax cut should be, the question should be can we afford a tax cut at all with the largest deficit in the history of this country.  [cheers, applause].

What I want to know is why we’re fighting in Congress about the Patient’s Bill of Rights when the Democratic party ought to be standing up for health care for every single American man, woman, and child in this country.  [cheers, applause].

What I want to know is why our folks are voting for the president’s No Child Left Behind bill that leaves every child behind, every teacher behind, every school board behind, and every property tax payer behind.  [cheers, applause].  [Audience member: “We want to know too.”].

I’m Howard Dean and I’m here to represent the Democratic wing of the Democratic party.  [cheers, applause]



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