Friday, June 10, 2011

I doubt PL is in this camp...

Todd Harrison suggests that sex scandals cause economic rifts.


TJE said...

The next Chairman of the Council of Economic Advisers?

Patrick_L said...

Yes, the linkage between Weiner (or brainless celebrity bimbos) seems farfetched in causal power. What explains the fall from grace of the blondes and faux-blondes in 2007 mentioned here? Is it indicative of shifting social mood (implication: applied to everythign), weariness specific to Lindsay & Co. since after all fads come and go, there destructive behavior taking a different turn in that year, etc. For now, correlation and not causation is the best that can be said, and the lack of sensible explanations makes me doubt this notion.

I also don't think the Weiner scandal and response after the fact represents something new in American history. If there is a "socionomic" shift, it is unlikely to have had any impact on the Weiner scandal, in which case looking tothe Weiner scandal is a poor indicator of a "socionomic" shift.

Otherwise, he has some good points. For instance, we are experiencing the first world-wide run up of debt (usually we've had debt problems concentrated in one region, like South America. It's unprecedented to have so many government running such large debts and projected future deficits for so long simultaneously when a war isn't going on). It is concerning to how difficult finding a balance between growth, rising taxes, and austerity is going to be succesful to a sufficient degree if nearly every country is tackling these promblems simultaneously which prevents different parts of the world compensating for one another. And since so many succesful debt reductions in the past, when only a few countries were trying to do it, involved debt destruction and asset class deflation- it does suggest there is a strong likelihood that it will happen again to some degree. Hopefully the U.S. will avoid that, or perhaps more accurately avoid economically unhealthy variations of that (there is some economic literature out there whihc suggests we did this well in the post-WWII era).

And economic stagnation and fiscal austerity is sure to incite populist backlash. It has throughout history.