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September 04, 2011


Jimmy Hill

If you're correct about bounded rationality then that will mean it's pretty much irrelevant whether policy-makers have the correct incentives or not.

If it's impossible to know the future it makes no difference if I have an incentive to know the future.


Is the statement referring to over-investment in the 50s and 60s widely agreed upon by progressive economists?


@eck. I think so. See eg Armstrong, Glyn & Harrison, Capitalism since WWII ch 11, or this:


Is it thought that regulatory impact assessments have improved the "quality" of policy-making and legislating?

My feeling is that they have. At least in the short term. Long term is anyone's guess.


"Revenge effects are consequences of a policy that serve to undermine the objective of that policy"

Isn't it ironic. Alanis Morissette confused me some what as to the words meaning but I'm fairly sure that revenge effects fit the definition of irony.


'Governments’ promise to maintain full employment in the 50s and 60s led to over-investment and wage militancy and hence to inflation and a profit squeeze in the 70s which led in turn to mass unemployment.'

Whilst union militancy and low unemployment played a part in the stagflation, I would dispute your overall explanation. I think financial deregulation and the resultant credit expansion, dismantling Bretton Woods & buffer stock schemes and supply side shocks were the real culprits.


Tim Newman

US support for the opposition to the Soviet occupation of Afghanistan in the 1980s helped to strengthen Islamic extremism, and thus diminish US security in the long-run.

The collapse of the Soviet Union, to which their defeat in Afghanistan contributed greatly, increased the security of the US and the west to a degree which eclipses the increased threat from Islamic extremism which resulted from US actions in Afghanistan. I even think the latter is overblown. The Islamists were outraged about the Soviet invasion, and mobilised without US help. True, they benefitted from US help, but the US was not decisive in how the Islamists turned out; and the single event which outraged the Islamists following the Afghan war was the stationing of US troops on Saudi after the Iraqi invasion of Kuwait.

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