I'd be interested to know how exactly the next President balances
what long-term goals are really needed to "fix" the economy
against the political pressure to enact short-term policies that will
have an effect before they must run for reelection.

Seems to me, no matter who the next President is, he or she is
pretty much screwed from an economic inheritance standpoint. It's
difficult to see how that really turns around before 2012.

And it's equally difficult to see how any of the candidates can
candidly talk about the fixes that are needed and have a prayer of
being elected in November.

steve, i am not sure we are seeing the bursting of complex financial instruments and derivatives... we have seen a strong bump in the zone, but if there was to be a serious burst, i think it is all over for fiat currencies and we don't look to be anywhere near that spot yet... derivatives and such have been used for quite some time and i suspect they will continue to be used for a long time.. i think if ordinary people knew just the kind of stuff that goes on in this area they wouldn't be investing their confidence in a lot of what goes on in the financial markets. wall st via the federal reserve will work hard to hide and conceal the extent of the corruption and hanky panky that is going on in the financial market and will hope the public goes back to sleep... they usually do..

FWIW, my $0.02 worth

What an "on-target" title for a forum. As someone who thinks Edwards was talking about the economy at a level of magnitude above anyone else, I am delighted that you are hosting this forum, and would love a link to watch this.

What you are doing re economic education is outstanding!

Questions I hope someone asks Leo is:

* Accepting the hypothesis that the "Delusional" economy is the paradigm under which those with the power to determine how federal dollars get created (and of what type), as well as how those federal dollars get allocated among competing possibilities, what do you see as some doable options for those hanging on to a "Real" economy and having little faith in the federal government having either the ability to understand the difference between the two economies, nor the will to address that issue?

* It seems to us that the recent bailout of the creditors of Bear Stearn (and the stock market response) signals that those with political power over money creation and money expenditure at the federal level are betting on being able to continue this "Delusion" economy indefinitely. After all, neither Germany nor the Soviet Union were able to alter course without going through some rather severe shocks. Naomi Klein has recently advanced the hypothesis that such shocks are a necessary condition for a national economy to implement such changes. Your thoughts?

* While Paulson mouths the words that he recognizes that the money supply (and implied credit institutions) should be structured for the benefit of all citizens, the actual policy suggestions appear to have little substance, and fail to address the fundamental issues of "what" and "for whom". That we spend more on having the capacity to call people with nuclear weapons (DOE/NNSA) than we do on keeping people alive (Medicare and Medicaid) or seeing that the young are educated (Detroit inner City HS graduation rate is <25%) is a large part of this delusion. To say that we have a "social security" problem or a "health care" problem, while in fact we have a military-industrial-congressional problem is to continue this delusion. Can we get out of this dilemma w/o going through a USSR type meltdown?

* Along this line, isn't this delusion in large part quite similar to the USSR delusion? The Soviet Union denied the existence of private goods, whereas the US is denying the existence of public goods. Both decision makers failed to recognize that it is the ATTRIBUTES of goods(ie a good is private when the first use significantly deteriorates the value of the second use, and public if it does not) and not the DECLARATION of a politician that determines the role of a collective institution in the provision of a particular good. Your thoughts on the role of ideology and "privatization" vs. "socialization" in creating the "Delusional" economy?

*And if you wish to delve deeper, the confusion caused by treating "exclusion" rather than Paul Samuelson's original characteristic of the original consumption's impact on future consumption of the same good?

[ see eg the footnote on p 1 of last years "Nobel" Prize in economics info sheet (in .pdf here http://tinyurl.com/23px8b
or enter "public goods" in wikipedia for those not familiar with that distinction, first developed in America by Paul Samuelson in 1954 ]

As readers of this blog well know, it is my belief that the US nuclear weapons policy is at the core of the "Delusional" economy, creating the delusion of military invincibility, crowding out real social investments with its insane investments in fantasy, which are the ultimate pork that is rarely questioned and little understood. All folks seem to recognize is money one receives (the delusion), and not the opportunity costs(the reality)of what one gives up: education, health care, public transportation, renewable energy, etc)

An example from New America Foundation fellow Jeffrey Lewis, who besides being Director of the Nuclear Strategy and Nonproliferation Initiative at the New America Foundation, writes an excellent blog on the subject follows. Hard as it is to believe given the magnitude of nuclear weapons expenditures re to military expenditures as a whole, our Deputy Sect. of Defense was clueless that DOE, and not DOD, funds nuclear weapons. How could he possibly know what is being spent, and even more important, what the real costs and other opportunities for achieving a given objective, or weighing competing objectives might be? Read the revealing clueless exchange between Rep. Hobson and Dep. Sect. England here:

http://tinyurl.com/ywp9fd

Darn. Found out about this too late.. would have loved to attend. I had the day off class, too!

Hope it went well, Steve.

Steve,
Off topic but...
I know endorsements don't often mean much with voters but they do sometimes influence influencers. With that in mind, what's your take on Lee Hamilton's endorsement of Obama?

Carsick:
That and the Gov. of Wyomiong also endorsed Obama. I don't know if Hamilton is a SD, but the Gov. of Wyoming is.

I wonder why this war didn’t bring more opportunity along with its debt. We have been going strong for over four years now and it would almost seem that we should have had opportunities to lift our economy up into a bigger boom similar to that of WW1. Everything has been blamed on the housing bust, but could the outsourcing of manufacturing goods privy to the war be another big misstep?

There has to be some opportunities out there that the naked eye is missing. In fact I know there are. Look at what the future in technology is promising. www.pushthefuture.wordpress.com Really how could companies put so much money into R&D to develop super devices if they didn’t think they would be bought up?

Is this just not being taking seriously or is something being ill-communicated to the public?

Steve: it seems like you`ve got some spammers breaking in to the
forum...

Can you please inquire as the total expenditures of the peoples dollars awarded to Private Military and Private Intelligence contractors?

And why the people have no mechanism for review, recourse, or remedy for abuse, and no means of demanding accounting, or accountability for the private military and private intelligence industrial complexes?

And further, why most of these PMC, and PIC awarded no bid, openended multi hundred million dollar contracts have deep tentacles rooting back and interpenetrating with the fascists and wanton profiteers in the Bush government?

As long as you're on the subject of the delusional economy, why not make it into a series and include the "delusional foreign policy." I sure Howard Zinn would welcome the help kicking off his new book:
http://www.tomdispatch.com/post/174913/howard_zinn_the_end_of_empire_

It's time to start talking about the real American foreign policy as practiced today, not the fairy tales put forward by realists and neocons to distract our attention and create the pretense of participating in a feel-good, noble cause.

Sorry for the interuption, but.......

If you are reading this comment, it must mean you are online, eh??? Its not exactly rocket science, is it?

(Brilliant, aren't I?)

So heck, you're online anyway. So why not drop Feith an email, and let him know who the real "asshole" is?

From the TPMuckraker.........

Feith boasted to Sands that back in 2002, he "was really a player" in ensuring that Gitmo detainees would not receive Geneva protections. But when Sands asked him "whether, in the end, he was at all concerned that the Geneva decision might have diminished America’s moral authority," Feith got nasty:

He was not. “The problem with moral authority,” he said, was “people who should know better, like yourself, siding with the assholes, to put it crudely.”

Feith's email is djf35@georgetown.edu.

His office number is 202-687-7846.

As long as he brought up the subject of "assholes", go ahead, rip him a new one.

Perhaps China could sell us to the highest bidder. I'm sure we could arrange to loan Israel the money for the purchase.

Or maybe just sell our secrets, thus avoiding awkward Pollard-like events

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/02/AR2008040203952.html?hpid=topnews

Right on schedule, another installment from you friendly banker, err, financier, err boss??? Apparently the Chinese are covering all their bases.

http://www.cnn.com/2008/US/04/05/airport.arrests.ap/index.html