The Young Turks

Cenk did a nice job interviewing Dr. Ravi Batra.  I have not read his book on Greenspan, but his statements resonate.

The notion of "productivity creating supply" and "wages creating demand", while apparently simplistic, stems from a basic postulate of economics, which is circular flow. An imbalance in supply and demand must be made up in some way, and with productivity outpacing wage increases over the last several years, demand has been met by an increase in debt (consumer and government).

If we allow this conceptualization, then much of what is happening in the economy currently is concerning, because the short-term fixes, e.g. taxcuts, "stimulus package", "lowering interest rates", "bailouts" will only exacerbate the fundamental long-term problem.  All these ostensible solutions encourage further increases in debt.

One thing that wasn't fully explored during the interview was the motive for this. Why allow debt to increase?

The reason is that it benefits certain industries specifically (particularly the financial sector), and it generally protects corporate profits (with a resulting beneficial effect on the stock market). 

Is this a good thing?  Certainly, it is for the CNBC's, MSNBC's, FoxNews's and for the voices they appear to represent.

For the rest of us, I am not so sure.