Of Trickle Down - and Demand Side.

[itfitzme]

I mostly agree with you, but isn't there something to be said about at least trying to design good government regulation that can protect the US? The economy is complex, but it's not impossible to do a few simple things that will protect American manufacturers, and make Chinese manufacturing look more expensive and less desirable for businesses.

China's a powerhouse that's set to have an economy double the size of the US in 2050ish; workers demand only $1/hr, work 15 hour days and live on site - how the heck do you compete with that kind of cheap labor? If our government does nothing, what's to keep American companies in the US?

I think our government needs to at least do something to protect American interests and keep manufacturing here instead of moving overseas, like a tariff on certain types of imports, or a subsidy to help out a manufacturing sector. Agree that subsidies/tariffs are often politicized and become meaningless and even harmful (as you state), but we need to keep trying.

China is a myth. Cheap labor based on the transition from an agrarian to an industrial economy allows for a great deal of production. China is simply a hundred years behind the West. However, just as we have seen in Taiwan, Korea, Singapore, et al, that is a gap that closes fast. In 25 years the labor costs and worker demands of China will be on par with Singapore and Korea, then another source of cheap labor will be needed.

What will keep manufacturing on domestic shores is automation. The days of thousands of assembly workers pulling a lever all day are gone forever. The key to American prosperity is knowledge. We dominate technology. Sure, chips are mass produced in Asia, but the design and the technology is American. Intel, AMD, Rockwell, Texas Instruments, Motorola, et al - they are North American companies developing the next generation of chips.

The next big thing is Biotech, dominated by America.

Not exactly.

Biotech started decades ago. Genentech was founded in 1976. Now 36 years old, one has to wonder what is taking the biotech boom such a long time to get started. We can only hope there is something big there. We could use another tech bubble.

China's population ranges from, as you say a hundred years behind the West to already fully up to speed in capitalism and education.

The process has been that manufacturing moves to China. Manufacturing engineers and managers of chip manufacturers begin their own support start-ups in China. Companies in the US, then looking for support services for the "system on a chip" devices employ the overseas

As well, the US engineering labor market has been a globally competitive market with engineers from China and India competing for jobs in the US. Manufacturing engineers and project managers from the Chinese subsidiary complete for positions at the US facilities.

It won't be long before the design is done in China.

 

[Uncensored2008]

Not exactly.

Biotech started decades ago. Genentech was founded in 1976. Now 36 years old, one has to wonder what is taking the biotech boom such a long time to get started. We can only hope there is something big there. We could use another tech bubble.

China's population ranges from, as you say a hundred years behind the West to already fully up to speed in capitalism and education.

The process has been that manufacturing moves to China. Manufacturing engineers and managers of chip manufacturers begin their own support start-ups in China. Companies in the US, then looking for support services for the "system on a chip" devices employ the overseas

As well, the US engineering labor market has been a globally competitive market with engineers from China and India competing for jobs in the US. Manufacturing engineers and project managers from the Chinese subsidiary complete for positions at the US facilities.

It won't be long before the design is done in China.

Well, good luck with that.

 

[EdwardBaiamonte]

I mostly agree with you, but isn't there something to be said about at least trying to design good government regulation that can protect the US? The economy is complex, but it's not impossible to do a few simple things that will protect American manufacturers, and make Chinese manufacturing look more expensive and less desirable for businesses.

China's a powerhouse that's set to have an economy double the size of the US in 2050ish; workers demand only $1/hr, work 15 hour days and live on site - how the heck do you compete with that kind of cheap labor? If our government does nothing, what's to keep American companies in the US?

I think our government needs to at least do something to protect American interests and keep manufacturing here instead of moving overseas, like a tariff on certain types of imports, or a subsidy to help out a manufacturing sector. Agree that subsidies/tariffs are often politicized and become meaningless and even harmful (as you state), but we need to keep trying.

China is a myth. Cheap labor based on the transition from an agrarian to an industrial economy allows for a great deal of production. China is simply a hundred years behind the West. However, just as we have seen in Taiwan, Korea, Singapore, et al, that is a gap that closes fast. In 25 years the labor costs and worker demands of China will be on par with Singapore and Korea, then another source of cheap labor will be needed.

What will keep manufacturing on domestic shores is automation. The days of thousands of assembly workers pulling a lever all day are gone forever. The key to American prosperity is knowledge. We dominate technology. Sure, chips are mass produced in Asia, but the design and the technology is American. Intel, AMD, Rockwell, Texas Instruments, Motorola, et al - they are North American companies developing the next generation of chips.

The next big thing is Biotech, dominated by America.

Not exactly.

Biotech started decades ago. Genentech was founded in 1976. Now 36 years old, one has to wonder what is taking the biotech boom such a long time to get started. We can only hope there is something big there. We could use another tech bubble.

China's population ranges from, as you say a hundred years behind the West to already fully up to speed in capitalism and education.

The process has been that manufacturing moves to China. Manufacturing engineers and managers of chip manufacturers begin their own support start-ups in China. Companies in the US, then looking for support services for the "system on a chip" devices employ the overseas

As well, the US engineering labor market has been a globally competitive market with engineers from China and India competing for jobs in the US. Manufacturing engineers and project managers from the Chinese subsidiary complete for positions at the US facilities.

It won't be long before the design is done in China.

in the long run design is American, not Chinese or Japanese because they have very rigid, liberal, centralized societies. Apple is a good example. The Japanese and Chinese designed[quantitatively improved, really] many of the parts but it took Apple to find a use for them or pull them together into useful products that touched our souls.

 

[Meister]

We need some government intervention to protect the United States with some of our own temporary tactics.

why not cut the liberal BS and say what intervention and why on earth you think it would work!!

I did.

I said that the Big Chinese Government right now is giving subsidies to certain industries to make them artificially more competitive, and as a result hurting the competitiveness of those same industries on the US side.

I said as a temporary tactic, we should be giving subsidies or doing something to combat this threat in order to protect American manufacturing. If China makes the price of product A $5 when it really costs $6 (because of subsidies), the Americans should do the same for its manufacturers who produce product A as well!

Why would it work? Because if the Chinese product costs $5, and ours $6, which product do you think is more likely to get purchased (holding quality as a constant)?

Liberal BS? Give me a break. What's your solution? Do nothing? Let China protect its own industries and hope that somehow we'll be OK by not protecting ours.

ahhhh, I see what you are now, Kevin.
You and roxie probably get along just fine at the political meetings.

 

[EdwardBaiamonte]

What's your solution? Do nothing? Let China protect its own industries and hope that somehow we'll be OK by not protecting ours.

dear, another Smoot Hawley trade war and Great Depression is obviously not the answer. As a liberal you will lack the IQ to understand. Here is the Republican capitalist solution:

1) Make unions illegal ( 10 million new jobs) Democrats oppose

2) make minimum wage illegal ( 5 million new jobs) Democrats oppose

3) end business taxation; especially tax incentives to off-shore jobs ( 5 million new jobs) Democrats oppose

4) make inflation illegal ( 2 million new jobs) Democrats oppose


5) make Federal debt illegal( 2 million new jobs) Democrats oppose

6) send illegal workers home(8 million new jobs) Democrats oppose

7) Pass Balanced Budget Amendment to Constitution( 3 million new jobs) Democrats oppose

8) cut pay of government workers in half( 4 million new jobs) Democrats oppose

9) Make health insurance competition legal( 6 million new jobs) Democrats oppose

10) end needless business regulations ( 2 million new jobs) Democrats oppose

11) restrict Federal spending to 15% of GNP( 2 million new jobs) Democrats oppose

12) support unlimited free trade( 2 million new jobs) Democrats oppose

13) reduced unemployment compensation, welfare, food stamps, medicaid.( 2 million new jobs) Democrats oppose

14) privatize education, social security ( 4 million new jobs) Democrats oppose

15) end payroll taxes ( 1 million new jobs) Democrats oppose

Since Democrats always oppose wisdom and common sense the only serious option is to make them illegal as the Constitution intended.

 

[KevinWestern]

What's your solution? Do nothing? Let China protect its own industries and hope that somehow we'll be OK by not protecting ours.

dear, another Smoot Hawley trade war and Great Depression is obviously not the answer. As a liberal you will lack the IQ to understand. Here is the Republican capitalist solution:

1) Make unions illegal ( 10 million new jobs) Democrats oppose

2) make minimum wage illegal ( 5 million new jobs) Democrats oppose

3) end business taxation; especially tax incentives to off-shore jobs ( 5 million new jobs) Democrats oppose

4) make inflation illegal ( 2 million new jobs) Democrats oppose


5) make Federal debt illegal( 2 million new jobs) Democrats oppose

6) send illegal workers home(8 million new jobs) Democrats oppose

7) Pass Balanced Budget Amendment to Constitution( 3 million new jobs) Democrats oppose

8) cut pay of government workers in half( 4 million new jobs) Democrats oppose

9) Make health insurance competition legal( 6 million new jobs) Democrats oppose

10) end needless business regulations ( 2 million new jobs) Democrats oppose

11) restrict Federal spending to 15% of GNP( 2 million new jobs) Democrats oppose

12) support unlimited free trade( 2 million new jobs) Democrats oppose

13) reduced unemployment compensation, welfare, food stamps, medicaid.( 2 million new jobs) Democrats oppose

14) privatize education, social security ( 4 million new jobs) Democrats oppose

15) end payroll taxes ( 1 million new jobs) Democrats oppose

Since Democrats always oppose wisdom and common sense the only serious option is to make them illegal as the Constitution intended.

Question: how does one have a grown up conversation with someone who, when the second you mention a single thing (just one) that may not comply with the doctrine in-total of those on the far right, labels you as a socialist and a "liberal", as if all of your views and approaches to the economy must also be far left leaning (because obviously people can either only be extreme right or extreme left), then insults your IQ.

I merely gave an example of a subsidy. Subsidies are supported by those on both the left and the right. I don't even like subsidies, and in my example, I just gave it as a possible short term tactic to absorb some of the hit of heavily subsidized Chinese industries. Wasn't hell bent on it (clearly if you read my post).

Just really quite annoying, quite frankly, the generalized name calling. You're not worth my time.

 

[EdwardBaiamonte]

I don't even like subsidies, and in my example, I just gave it as a possible short term tactic

so then what is it that you want to do? You want a short term Hawley Smoot trade war and short term Depression? We've been losing jobs overseas for 40 years. Is that short term? In fact any protection just renders them less able to compete, not more, in the long run. Sorry but your idea rates a liberal IQ score,i.e., a low one. Although, I'm sure your IQ in other areas is quite high.

Do you know why you had to ignore the 15 Republican capitalist solutions I gave you?

 

[KevinWestern]

so then what is it that you want to do? You want a short term Hawley Smoot trade war and short term Depression? We've been losing jobs overseas for 40 years. Is that short term? In fact any protection just renders them less able to compete, not more, in the long run. Sorry but your idea rates a liberal IQ score,i.e., a low one. Although, I'm sure your IQ in other areas is quite high.

Do you know why you had to ignore the 15 Republican capitalist solutions I gave you?

The reason I didn't respond to your 15 solutions - initially - is because I wanted to let you know first that I thought your approach to the conversation was one sided and childish. That said.

You're going in the right direction with some the solutions (reducing regulations, reducing spending on welfare), but a lot are quite vague and overly simplistic. I need more substance. And where the heck do you get these job figures from?

Also some of your suggestions are just crazy, like "Make inflation illegal"? "Make debt illegal"? Now I don't support the debt levels of today (I think it's outrageous) but making it so "federal debt" is illegal just sounds a bit extreme to me. I mean, what happens if I need to buy a house and in order to do that I need to borrow some money in order to build some equity?

Also "Cut pay of government workers in half (4 million new jobs)"? Again where are these numbers coming from? What about the jobs of the people who now make $20,000 instead of $40,000?

 

[Procrustes Stretched]

One name: David Stockman


Stockman became one of the most controversial OMB directors ever during a tenure that lasted until his resignation during August 1985.

Committed to the doctrine of supply-side economics, he assisted the approval of the "Reagan Budget" (the Gramm-Latta Budget), which Stockman hoped to be a serious curtailment of the "welfare state", gaining a reputation as a tough negotiator with House Speaker Tip O'Neill's Democratic-controlled House of Representatives and Majority Leader Howard Baker's Republican-controlled Senate.


“It is not surprising, then,” Stockman concludes, “that during the last bubble (from 2002 to 2006) the top 1 percent of Americans — paid mainly from the Wall Street casino — received two-thirds of the gain in national income, while the bottom 90 percent — mainly dependent on Main Street’s shrinking economy — got only 12 percent. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.”

And still, Republicans in Congress and across the country are staking their fortunes on more tax cuts, including–and especially–for the richest. That’s sacrifice. That’s fiscal responsibility.

In several threads around the board, debates rage regarding the superiority of "Trickle Down" or "Demand Side" economics on a macro scale. What becomes rapidly clear is that most people arguing these positions don't know what the terms mean. What is "Trickle Down Economics?" What is "Demand Side Economics."
...

Standard Disclaimer: My bias is Rothbard, for those who know who he was.

David Stockman: How Nixon, Reagan, the Bushes and their GOP Demolished the Economy - David Stockman on Deficit Spending | FlaglerLive - Your News Service for Flagler County News Palm Coast News Bunnell Flagler Beach Beverly Beach and Marineland

David Stockman - Wikipedia, the free encyclopedia

 

[DSGE]

Keynes answer to the business cycles was simple, in an economic downturn government gets involved and pumps money into the economy. Sure we go into debt, but when the crisis is over and the nation is buzzing along we pay back the borrowed money. Simple enough but what is not simple is getting politicians to pay back the money.
Politicians want to spread the largess about and hope it attracts votes so the borrowed money doesn't get paid back. Was Keynes wrong or the politicians, or the maybe the people for going along with the politicans, and not insisting the money be paid back.

Fiscal stimulus doesn't "pump money" into the economy. Its goal is to take money from those who aren't spending it and have the government spend it instead (which isn't necessarily what happens). Monetary expansion however literally does pump new money into the economy. If anybody would take the time to read any economic works after 1936 they'll find that monetary policy strictly dominates fiscal policy in managing aggregate demand.

 

[DSGE]

What's your solution? Do nothing? Let China protect its own industries and hope that somehow we'll be OK by not protecting ours.

dear, another Smoot Hawley trade war and Great Depression is obviously not the answer. As a liberal you will lack the IQ to understand. Here is the Republican capitalist solution:

1) Make unions illegal ( 10 million new jobs) Democrats oppose

2) make minimum wage illegal ( 5 million new jobs) Democrats oppose

3) end business taxation; especially tax incentives to off-shore jobs ( 5 million new jobs) Democrats oppose

4) make inflation illegal ( 2 million new jobs) Democrats oppose


5) make Federal debt illegal( 2 million new jobs) Democrats oppose

6) send illegal workers home(8 million new jobs) Democrats oppose

7) Pass Balanced Budget Amendment to Constitution( 3 million new jobs) Democrats oppose

8) cut pay of government workers in half( 4 million new jobs) Democrats oppose

9) Make health insurance competition legal( 6 million new jobs) Democrats oppose

10) end needless business regulations ( 2 million new jobs) Democrats oppose

11) restrict Federal spending to 15% of GNP( 2 million new jobs) Democrats oppose

12) support unlimited free trade( 2 million new jobs) Democrats oppose

13) reduced unemployment compensation, welfare, food stamps, medicaid.( 2 million new jobs) Democrats oppose

14) privatize education, social security ( 4 million new jobs) Democrats oppose

15) end payroll taxes ( 1 million new jobs) Democrats oppose

Since Democrats always oppose wisdom and common sense the only serious option is to make them illegal as the Constitution intended.

You can tell that you're full of shit because you end up creating 4 times as many jobs as there are unemployed people. Do you honestly believe those numbers you just plain made up? Because if so, you need to be institutionalised. Being that dumb must make you a danger to yourself and others.

 

[editec]

Kiddies you're going to read more than Atlas Shrugged and the Road to Serfdom if you're going to discuss macroeconomics.

Neither book is really about macro.

ATlas Shrugged is a social scence fiction and Road to Serfdom is a political screed designed to show XXth century thinkers that socialism is a bad policy for a nation to pursue.

Now I've read both those books and frankly, I enjoyed them quite a lot.

But neither is really anything to base real economic policy on.

 

[samjones]

I said that the Big Chinese Government right now is giving subsidies to certain industries to make them artificially more competitive, and as a result hurting the competitiveness of those same industries on the US side.

Despite what some people up here may think, China is still a Communist country meaning that their individual industries do not have to turn a profit as long as the Government as a whole makes money. It's sortof like an extreme version of Henry Ford's vertical marketing.

If you own the mine and the mill and the trucks and the factory then it doesn't matter whether any of them turns a profit. Just make it on the final product. American Capitalism doesn't work that way.

I said as a temporary tactic, we should be giving subsidies or doing something to combat this threat in order to protect American manufacturing. If China makes the price of product A $5 when it really costs $6 (because of subsidies), the Americans should do the same for its manufacturers who produce product A as well!

I can't imagine how you can think that anything other than that has been happening, especially since '08. Obama saved the auto industry and the finance industry and the Government has been propping up health care for generations now.

 

[Uncensored2008]

Fiscal stimulus doesn't "pump money" into the economy. Its goal is to take money from those who aren't spending it and have the government spend it instead (which isn't necessarily what happens).

That is false.

You describe neither the intent nor the reality. The basis of Keynesian stimulus is deficit spending. There is no intent to take by force or coercion, capital from individuals or business for the purpose of a stimulus.

Monetary expansion however literally does pump new money into the economy. If anybody would take the time to read any economic works after 1936 they'll find that monetary policy strictly dominates fiscal policy in managing aggregate demand.

Monetary expansion with fiat currency is what has so many (often fringe) people convinced that there is fraud and theft involved. In a perfect world, the expansion of the money supply exactly correlates to the infusion of real value into an economy so that neither inflation, nor deflation occur.

If inflation is present, then the money supply is being expanded at a rate greater than the infusion of real value into the economy. If this is done as a matter of policy, then it must be recognized as institutional theft, the taking of value with no reciprocity. Essentially, if a monetary policy has a goal of 2.5% annual inflation, it is a statement of intent to steal 2.5% of the wealth of the economy every year.

Contrariwise, if the money supply fails to grow at the rate that real value is added, then the monetary policy has the potential to stifle economic growth as money becomes tight, causing interest rates to rise.

Monetary policy is critical to a healthy economy, but an area ripe for abuse and fraud.

 

[Uncensored2008]

Kiddies you're going to read more than Atlas Shrugged and the Road to Serfdom if you're going to discuss macroeconomics.

Neither book is really about macro.

Nor is "Rules for Radicals."

I'm just sayin...

ATlas Shrugged is a social scence fiction and Road to Serfdom is a political screed designed to show XXth century thinkers that socialism is a bad policy for a nation to pursue.

Now I've read both those books and frankly, I enjoyed them quite a lot.

But neither is really anything to base real economic policy on.

How nice for you.

Here's one that might give you some actual knowledge of economics.

[ame=http://www.amazon.com/Man-Economy-State-Murray-Rothbard/dp/0945466323]Amazon.com: Man, Economy, and State (9780945466321): Murray N. Rothbard: Books[/ame]

 

[DSGE]

Fiscal stimulus doesn't "pump money" into the economy. Its goal is to take money from those who aren't spending it and have the government spend it instead (which isn't necessarily what happens).

That is false.

You describe neither the intent nor the reality. The basis of Keynesian stimulus is deficit spending. There is no intent to take by force or coercion, capital from individuals or business for the purpose of a stimulus.

The basis of Keynesian stimulus isn't deficit spending. Deficit spending is a mechanism through which we may raise nominal spending. If nominal spending falls due to an increase in the demand for money, through nominal rigidities this can create a fall in output and employment in the short run rather than an immediate adjustment of wages and prices. This is the "demand side recession" or "insufficient aggregate demand" or whatever you want to call it. The "basis" for Keynesian stimulus is that these frictions will not be an issue if we can return nominal spending to its previous level. The mechanism through which Keynes suggested this be done is fiscal expansion (the power of monetary policy wasn't really acknowledged until A Monetary History came out). Deficit spending requires taxation, either now or in the future. If the tax takes money that would otherwise have been spent out of the economy, then there really is no nominal spending stimulus. There's "crowding out" of private spending. The only way deficit spending can work is if you are taking away money that is being horded, not spent, and spend that.

Monetary expansion with fiat currency is what has so many (often fringe) people convinced that there is fraud and theft involved. In a perfect world, the expansion of the money supply exactly correlates to the infusion of real value into an economy so that neither inflation, nor deflation occur.

First, I'm not entirely sure what you mean by "infusion of real value". Second, I object to the idea that price stability is the optimal monetary policy. The stability of nominal spending is a much better candidate. Demand-side recessions are able to happen under perfect price stability; they are not able to happen under NGDP targeting. Although depending on the NGDP target you choose, you may have long run price stability. Some people want that, some people want to target constant nominal spending. That would mean that nominal incomes remain constant, and prices fall as productivity increases.

If inflation is present, then the money supply is being expanded at a rate greater than the infusion of real value into the economy. If this is done as a matter of policy, then it must be recognized as institutional theft, the taking of value with no reciprocity.

Depends on how it's done. If it's fully expected, say because your country's central bank has an explicit inflation target of say 2% it must follow by law, then people don't get tricked. It's just that nominal wages grow by an extra 2% per year and nominal interest rates rise by 2%. It's the same as if inflation were 0%.

Essentially, if a monetary policy has a goal of 2.5% annual inflation, it is a statement of intent to steal 2.5% of the wealth of the economy every year.

No it's not. You realise that money is superneutral right? The classical dichotomy holds in the long run; reals affect reals, nominals affect nominals. All nominal variables adjust upward by 2.5% to preserve real variables.

Contrariwise, if the money supply fails to grow at the rate that real value is added, then the monetary policy has the potential to stifle economic growth as money becomes tight, causing interest rates to rise.

Yes. A more general way to put it is if shocks to monetary velocity aren't offset, then monetary policy can become too tight. If people want to hold their assets as currency (rather than say, demand deposits), but the supply of currency doesn't increase to meet that demand, money becomes tight and economic growth gets stifled. Just like what happened in 2008 when the Fed allowed nominal spending to fall 9% below trend.

I disagree with your "causing interest rates to rise" part though. There's far too much focus on interest rates as the monetary transmission mechanism. You end up getting things the wrong way round. You end up focusing on the liquidity effect instead of the fisher effect. Which of these is associated with higher interest rates: depression, or hyperinflation? Hyperinflation is associated with gigantic interest rates. Depression is associated with interest rates being near zero. Now which of the two would you say is associated with easy monetary policy? See how interest rates are misleading? So what does monetary policy directly effect? Nominal spending. PY, it either increases the price level or real output temporarily. So we should be looking at NGDP to guage the stance of monetary policy, not interest rates.

Monetary policy is critical to a healthy economy, but an area ripe for abuse and fraud.

I absolutely agree. Which is why I want to get rid of this monetary discretion bullshit. There needs to be explicit targets formulated in the bills which establish central banks along with punishments for not meeting the target. Nobody should be trying to guess what the Fed are gonna do next month, and the Fed shouldn't have anywhere near as much discretion of the US economy as they do.

 

[EdwardBaiamonte]

The mechanism through which Keynes suggested this be done is fiscal expansion (the power of monetary policy wasn't really acknowledged

Of course that is utter idiotic BS!! Keynes did suggest monetary policy in the General Theory in which he implied only he could use every mechanism under the sun to get any outcome he wanted. There was nothing specific in Keynes. He was a liberal, apostolic, genius, but pure megalomaniac of little use today!

 

[Uncensored2008]

Of course that is utter idiotic BS!! Keynes did suggest monetary policy in the General Theory in which he implied only he could use every mechanism under the sun to get any outcome he wanted. There was nothing specific in Keynes. He was a liberal, apostolic, genius, but pure megalomaniac of little use today!

I don't agree.

Keynes was an aristocrat and an intellectual. He had no connection to the real world. Trained as a mathematician, Keynes saw the world through equations and graphs.

I've seen nothing suggesting megalomaniacal tendencies in Keynes, quite the opposite. Keynes seemed disinterested in political power and in people. He operated on a detached and purely theoretical level. Von Mises harshly criticized Keynes for failing to incorporate the human aspect into his ideas.

Mises on Keynes (1927) - Ludwig von Mises - Mises Daily

 

[EdwardBaiamonte]

Keynes was an aristocrat and an intellectual. He had no connection to the real world.

He was deeply and personally involved in every major economic event that occured during his life

I've seen nothing suggesting megalomaniacal tendencies in Keynes, quite the opposite.

he was the perfect liberal who thought he was, literally, an apostle!! and as such could perfectly control the world's economy

 

[Uncensored2008]

He was deeply and personally involved in every major economic event that occured during his life

In what way was he deeply involved?

he was the perfect liberal who thought he was, literally, an apostle!! and as such could perfectly control the world's economy

Of course, everything could be forced to fit his equations. This is the trap of mathematicians, not liberals.