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From: steiny@scc.UUCP (Don Steiny)
Newsgroups: net.flame
Subject: Re: economy
Message-ID: <165@scc.UUCP>
Date: Sat, 22-Sep-84 17:36:00 EDT
Article-I.D.: scc.165
Posted: Sat Sep 22 17:36:00 1984
Date-Received: Wed, 26-Sep-84 06:42:00 EDT
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Organization: Personetics, Inc. - Santa Cruz, Calif.
Lines: 93

***

	I am not fluent in economics, but I do not believe that 
comparing Carter vs. Reagan without considering the oil glut,
the subsequent drop in oil prices and the near collapse of OPEC
as being contribution factors to both the deterioration and
subsequent regeneration of the economy.   Martin Gardner had
an article several years ago in "Scientific American" in which he
pointed out that a model like Laffer's was to simple to be 
accurate.   

	One observable effect of the current administration's
economic policies (and the Federal Resereve is the most important
factors) is that we continue to have high interest rates.
This has an effect on the national economy and it has an effect
on the economies of other countries.

	The high interest rates makes the United States a good investment.   
For this reason the dollar has been gaining against other currencies of the 
world.  Lots of foreign money has been coming in to take advantage of the
high interest rates.  

	Unfortunately for, say, Brazil and Mexico, they must pay back loans
at the high interest rates.  This burden of debt lowers the standard
of living in the debtor countries.  It lowers the price of goods
from the third world and greatly increases the cost of United States 
goods.  That is why we have a massive trade deficit.  It also puts
many banks on shakey ground, because there is always a danger that
the social instability caused by the economic burden will bring
someone to power that forfits payment.

	Some people, including Pope John Paul, have bluntly called these
economic policies "imperialistic."  

	The whole situation leaves me with many more questions than 
answers.  At the bottom lies the question, "Is the world economy
a zero sum game?"   A zero sum game is one where there is the same
amount of "money" and it distributed among the players during the game.
That would mean that if people in the United States were enjoying
a higher standard of living someone somewhere else would have a lower standard
of living. 

	The high value of the dollar is great for US tourists abroad.
The exchange rate is at unprecedented levels.   A day's wages
for the average computer programmer buys weeks or even months at
a luxury motel in Mexico.  On the other hand, for a Mexican, 
a peso buys no more, and because of austurity measures forced on
them by irresponsible government spending and the drop in oil prices, the 
average Mexican's standard of living is worse than it was a few years 
ago.    It takes less American dollars to buy people's
labor almost anywhere in the word than it did when Reagan came in
office.

	It seems to me that from one point of view, the policies
are imperialistic, or at least we are "gaining" at the direct
expense of others.   I believe that the cows will come home (so to speak).

	The whole "illegal immigrant problem" is caused by the
economic inequities and the current economic policies have to make
it worse.  If you have not seen "El Norte" I highly recommend it.
It gave me strange dreams for days.    It is a story of two
Central Americans who make their way to "the North" to become
laborers.  With events whose horror is increased by
not only by their realism, but also by their close proximity,
the movie illustrates its central theme: "To the rich,
a poor person is just two strong arms."  People often come from
Latin America so they will not die there. 

	Though Mondale would probably be less imperialistic
with his economic policies,  who knows for sure if that would
be the best in the long run?   Throwing money at things does not
help anything either.

	I don't think anyone really knows what to do and what to consider.
Maybe the best idea  would be to start an international project to
model the world economy considering such variables as standard of living,
literacy, medical care, and other standards to measure the quality of
life.  If a model was developed and modified to reflect new
variables and relationships that were not thought of at first,
maybe it would eventually give us enough information to begin
to adjust the system with some idea of the consequence.  I think
Bush described Reagan's economic policies best: "voodo economics."

	Of course, "voodo economics" is a self-canceling term.
	
-- 
scc!steiny
Don Steiny - Personetics @ (408) 425-0382
109 Torrey Pine Terr.
Santa Cruz, Calif. 95060
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