E Caterpillar Confirms Kalecki's Historical Truth About The Business Cycle

The Democrats at least partially recognize the strong public-private good character and the complexity of the early phases of R&D, as evidenced by President Obama’s support for innovation clusters. They also have introduced legislation to provide infrastructure support for small businesses and entrepreneurs. Unfortunately, these efforts are largely ad hoc and incomplete. 

Tassey also says:

The Republicans are further off course, implicitly claiming that government should support development of only those technologies useful to a government mission such as defense. They see no need to nurture the development of technologies that will contribute directly to economic growth.

Republicans deride public private partnerships. The Hoover Dam is a direct result of such a partnership. That was when America was great. Even Trump's infrastructure plans are derailed in the congress as were Obama's plans.

America should spend on high tech infrastructure, not just roads. As Tassey says, there is a structural problem with the American economy. Kalecki, were he still with us, would likely say that problem leads to a destruction of the business cycle, as investment when demand is present and increasing is still being avoided.

Or, as some have said about the economy since the Great Recession, there never was a real recovery in the first place. The gulf between rich and poor has only increased. Clearly research and development must be encouraged by, and helped by government. It worked in the past, when we were great. It can work again. Through innovation, labor must reap a greater portion of GDP or the business cycle will drag down the American economy.

Donald Trump may not be the only unstable populist to come out of this long season of discontent.







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Disclaimer: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice. The ...

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