Can REALLY tax-cut boost economy? On old fashion supply side economics in globalization context

By: Shahab Sabahi

Energy and Environment – policy analysis research group

The notion of supply side economics is going to become a dominant idea for the policy choice for a few Americans. The supply side economics advocators believe the supply of goods and providing services through lower taxes, less regulation and promotion of entrepreneurship would amplify supply and it consequently brings about reducing prices and stimulating demand. They argue that demand is also increased by jobs created to increase supply. Their proof is the US economy boom during R. Reagan and The UK economy restructuring over the M. Thatcher’s tenure. They unfairly and faultily argue big government and their stimulus programmes using other people’s money will have failed.

his argument and notion misses to consider in its framework the globalization forces that affect the dynamic of the new world economy order and take the presence of free-market for granted.

Globalization is the process by which markets globally integrated. Over the past 60 years, it has accelerated steadily as new technologies and management expertise have reduced transportation and transaction costs and as tariffs and other man-made barriers to international trade have been lowered.(M. Spence, Foreign Affair, Aug 2011)

The average growth rate of 7% among thirteen developing countries indicates the significant share of these countries in the world supply. China, have grown by 7 to 8 percent per year for 25 years.

Now, just one decade to the new millennium, the world finds itself in a situation where the developing countries income levels have been converging toward those in developed countries.

It is a FACT that the emerging economies impact on the global economy. A decade ago, the effects of globalization on the wealth distribution and jobs were soft. Most of developed economies were growing at a respectable rate of 3% with variety of employment opportunities. (M. Spence, Foreign Affair, Aug 2011). As emerging markets engaged with the global economy, imported goods became cheaper benefiting consumers in the entire world.

Now the relatively rich developing countries restructure their economies with respect to the comparative advantage forces. They produce the high value-added goods that used to be the exclusive purview of advanced economies. This structural economic change in developing countries will have been impacting on any production and service business dreams in developed countries, if they expect a miracle from supply side economics in the future. Globalization has been affecting the job patterns and wages.

If the policy choices of the US go toward the supply side will not benefit the country’s economy. It will not bring any productive investments in the country. Perhaps it leads to more demand for Dollar and saving in US-based banks. Inevitably, no promising job will be created.

It does not mean the pursuing orthodox Keynesian model will shore up the country’s economy. However, during crises, a powerful institution who can take the leadership for reform and restructuring the political and economic systems is essential (Michael Woolcock “getting to Denmark 2000) A government could be a legitimate one if it maintains or preserves trust among its people.

Let’s be honest, in the globalization context, tax break will again spare the wealth of riches (Patrimonialism, F. Fukuyama, 2011) and will kill the confidence of people to their authority. The authority whose presence creates order and law, the two important elements of liberal democracy, the system can guarantee free-market sound function. 

So supply side economics has noting to contribute for success as much as Keynesian has not. However the latter can be operated by an institution (government), albeit if the institution is in its strong and effective shape, to restructure and direct its economy while the institution maintains the order across its state 

What do Japan, US, EU need the most?

By Shahab Sabahi

Energy and Environment - Policy analysis research group

Francis Fukuyama argued in his book THE END OF HISTORY AND THE LAST MAN (1992), that the fall of communism ended an aged dispute over the proper society structure and institution in favor of liberal democracy. Now liberal democracy has been in force without competitor for dozen decade. Since there exists no perfect system in the real and dynamic world, what would be the successor of liberal democracy? When would liberal democracy reach its decay? (Huntington 1962, theory of political decay)

Perhaps the recent incidents such as financial crisis highly polarized national politics, emergence of nationalists, international competitions and global warming suggest that time is up for liberal democrat. The fact is the liberal democrat has no an efficient answer for these issues. History also tells us in the time of hardship, a strong leadership who can create a sense of trust among society, directed societies even it breached the basic principle of liberty,

The notion of market forces and a simple confidence in the power of markets and the “rational man” economic model are ultimately as self-defeating as the socialist ideal. As cultural theory suggests, culture is the ultimate determinant of social life and consequently economic behaviour. People make their choices based on their world view, ideology and lifestyle. Men and women have needs that transcend the desire for gain. As members of societies, they are in a sophisticated network of understanding and obligation. These cultural ties induce every economic decision. It seems that something is at odds with orthodox economics. THE SOMETHING lives in the real world, thus the orthodox economics disables to figure out issues and should be revised.

Social science teaches us that Trust is the cultural key to prosperity. The level of trust in a society shapes the nature of its economic transactions and institutions. High-trust societies are marked by a high degree of spontaneous sociability. Individuals in these societies are able to build strong relationships outside such structures as the family. High-trust societies are able to generate the large corporations that form the cutting edge of modern industry. People in low-trust societies are disinclined to trust people outside their family or clan. They tend to form smaller family-run firms. Traditionally, nations such as Italy and China have been low-trust societies, and nations such as Japan, Germany, and the United States have been high-trust societies. Fukuyama warns that an erosion of trust in the United States during recent decades may imperil its economic position.

A rebirth of the communal values which promote trust, in America, Japan and EU is essential.

China and its energy dilemma

Shahab Sabahi

Energy and Environment - Policy analysis research group

On May 2011, Chinese state-owned media reported that as many as 24,000 industrial businesses in the Shanghai area had been told that they face mandatory power cuts. In Zhejiang province, some factories had switched to diesel powered generators, despite the fact that diesel power costed as twice as those of the grid that would have increase production costs as well as emissions.

The vulnerability of China’s energy structure appears as a serious threat to social and economic stability, as rationing consumption imposed in as many as ten major areas for five month (Source BBC)

Despite intensive efforts to diversify the country’s primary energy supplying from hydropower, wind, solar and nuclear, still 70% of China’s energy are coming from coal. China uses 46% of the total world’s coal production. Imported coal price was doubled over the last five years and has played a major role in China’s rising inflation, at 6.7% in mid-July and which could go as high as 8% before by the end of the current year.

Even with the National Development and Reform Commission attempted to stabilize the market with keeping price flat, the rising international price had deterred this attempt and local consumers were forced to rely on domestic production. It caused additional strain on domestic production which went beyond the prevailing domestic production capacity.

Shifting to use additional domestic coal requires spare domestic transport network capacity. In some places where their infrastructures have yet needed development or are already deficient for additional load, cannot function effectively. It leads the employment of road transportation and heavy-trucks that will increase the road traffics, causing disruption in the normal traffic across the country.

China already stands first as the world’s worst pollutants, with burning huge amount of coal with a record high of 12% annual rising since 2000. Electricity demand keeps rising, particularly in the eastern manufacturing hubs around Shanghai and Beijing and the southern ones in Guangdong. China had an estimated total installed electricity generating capacity of 797 gigawatts (GW) in 2009, net generation was 3,446 billion kilowatt-hours, 81 percent of which came from conventional thermal sources, mostly coal.

Rapid growth in electricity demand this previous decade spurred significant amounts of investment in new power stations. Although much of the new investment was earmarked to alleviate electricity supply shortages, the economic crisis of late 2008 resulted in a lower demand for electricity. The government is investing in further development of the transmission network, integration of regional networks, and bringing on planned new generating capacity. Investment in the transmission grid was greater than that in the generation sector for the first time in 2008.

China is actively promoting nuclear power as a clean and efficient source of electricity generation. Although China's nuclear capacity of 10.8 GW makes up only 2 percent of total generating capacity that is a small fraction of the installed generating capacity, many of the major developments taking place in the Chinese electricity sector involve nuclear power. China's government forecasts that over 70 GW will be added by 2020. China has 13 operating reactors and 27 reactors under construction (source EIA)

China has become the leader in the manufacture of solar panels and by 2007 was producing 1.7 GW of them for sale, but solar took only less than 0.01 % of total electricity. China is also the world’s largest installed wind power, surpassing the United States in 2010, with capacity now 40 MW which is about 1 % of the total electricity production.
Hydropower now accounts for 20 percent of energy production, with 22,000 large dams built and plans to build more, many of them on the Brahmaputra and Mekong Rivers at their headwaters in China the subject of substantial controversy. However the severe drought in central and southern China reduced the effectiveness of the dams because they need to be full for maximum energy production. (Source PSA)

Yet China’s energy dilemma and challenge continues and the country’s energy and transport infrastructures appear deficient. It also comes into view that policies have been dysfunctional and should be reviewed. Perhaps it is time for China to turn down the pace of its growth if China cares about its domestic stability and its international reputation.    

Can unregulated financial markets end CAPITALISM? International political instability

By Shahab Sabahi

Energy and Environment - Policy analysis research group

Whatever caused the financial markets crashed (lack of stringent regulations), the fact is the invisible hands of free market disable to fix and help the markets return into the normal function. Indeed a strong policy must be adopted to regulate the financial markets before further damages to economies and consequently to societies.

It is worth to recall Karl Marx’s remark. He was partly right in arguing that globalization, financial integration and intermediation would end to anarchism. As values are faded away in one financial market, international companies’ growth is stalled and the companies will cut jobs. Cutting jobs causes reduction in labour income, and it will reduces final demand and again more drop in supply.  

The existing unregulated financial markets, with short-profit focus, have generated ineffective wealth which have not been redistributed in productive sectors and just generated bubble income for few.  The unregulated financial markets may lead to capitalism’s end IF an immediate policy intervention does not occur.

Growing unemployment amplifies poverty and inequality which threaten security in national and global level. The social strain and lack of opportunities will reach and feel by the world’s middle class that corresponds to social unrests.

Now it is time for a fresh CAPITALISM framework that is capable to address the intergraded and complex markets. It is time to move away from obsolete ideas, deficit-driven welfare and laissez-faire economic framework. Being realistic, both are broken. To enable market-oriented economies to function as they should, they require returning to the right balance between markets, to do long term productive investments, and develop human capital that can create ideas.  

The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment and energy and environment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial markets; breaking up too-big-to-fail banks.

Over time, the regulated financial markets will support economies to invest in energy supply (energy security), quality environment, skills and smart - healthy society that can check consumption in reasonable level. The smart – healthy societies will improve their members’ skills and lifestyles. It enables members to compete in every global-scaled economy.

Otherwise the world will witness once more, like the early twenty century, stagnation, depression, currency and trade wars, protectionism, capital controls, sovereign insolvencies, arm race, and massive social and political instability.

Energy security a new Dilemma for Japan – An unrealistic expectation and decision

By Shahab Sabahi

Energy and Environment - Policy analysis research group

On Aug 14, 2011, Today published an article in which David Pilling claimed that the lights were still on in Tokyo while two-thirds of Japan's nuclear power stations had been switched off.
He continued with a question “If nuclear power is really as vital to the Japanese economy as has been made out, how come the country has not ground to a halt?”

He idealistically!!! argues that one of the reasons Japan’s economy has been able to soldier on is that there is a massive energy-saving drive!!! Office air-conditioners are not blasting at their normal freezing-cold temperatures. Buildings close at a reasonable hour, obliging salarymen to forego hours of masochistic overtime. Companies have even reinvented the weekend: Toyota's working week now runs from Sunday to Wednesday, helping to spread electricity usage more evenly across the seven-day cycle.

Perhaps David confused the meaning of ENERGY SAVING and also he did not pay enough and careful attention to economical consequences of this odd Japanese government policy.  

Energy conservation can be achieved through increased efficient energy use, not reducing energy consumption.  So the efforts which David listed in his post, will cause a reduction in the Japan economic productivity and as a result increase the price of Japanese services and goods. Japan already suffers appreciation of its currency; therefore extra strain from losing the nation-wide productivity will exacerbate the Japan economic slowdown.

Furthermore, the nuclear reactors decommissioning will be costly and time consuming. Despite what David argued, electricity from renewable sources are not as cheap as he highlighted. Perhaps a narrow view on a simple cost-benefit analysis of a particular renewable energy technology, would put weight on the back of renewables, but in real world,  poor load factor of renewables will ultimately increase the cost of generating electricity from renewables plus more emissions (Yes renewables still need backup of fossil fuels)

I add more arguments against what TODAY published. According to Bloomberg on Aug. 15, 2011, Japanese government’s effort to reduce reliance on nuclear energy would require the equivalent of 470 million barrels of oil a year, swelling the $222 billion annual cost of fuel imports and further burdening Japan's $5.5 trillion economy

Without any doubt, Japanese are the only nation who have got the first ever atomic bombs and the worst nuclear disaster since Chernobyl. Japanese deserve to enjoy nationwide and intergeneration prosperity. Prosperity requires safe, reliable, affordable energy based on REALITY of energy security

Japan relied on imports to meet 80 percent of its energy needs in 2009, World Bank data show, against 60 percent for Germany and 22 percent for the U.S. China imported 6 percent of its energy in 2008, according to the latest data available.

The suspension of reactors helped boost Japan's LNG imports by 35% in June from a year earlier. Crude oil purchases climbed 30 percent, the Finance Ministry said July 28. Total imports rose 9.8 percent, compared with a 1.6 percent decline in exports.

Japan's entry into the global market to buy the equivalent of an extra 1.3 million barrels of oil a day may lift prices.

Not only Japan, but the entire world will also be nuclear free at a reasonable point in the time. But fact is, the time is not on Japan side right now.

The Asia philosophy for socio-economic transformation and balance - Democracy and prosperity, which one should come first?

By Shahab Sabahi

Energy and Environment - Policy analysis research group

It is worth to note that the collective experience of countries in which intelligent economic development originated from the top in a highly authoritarian setting. It is striking to note that once the economy becomes successful it creates pressures for democratization and free market. (Z.B. Brzezinski 2008)

In contrast, neoclassical economists claim the collective economic success across the world, has been a result of FREE MARKET. They believe, democracy and leaving- all- decision-making occurs in market places will solve the problem of poverty and fair distribution of resources. So the questions are: Should both democracy plus free market be initially placed and then they would automatically guarantee economic growths and prosperity? Or are democracy and free market the products of economic growth and successors of discipline?  
  
In our fresh memories an unsuccessful model happened in very far East- EU in the 1990s. However it is not the sole story of unsuccessful economic transformation. The Russia initially embraced
democracy that produced chaos and near economic ruin. The Russians first modernized their political system, made it more democratic and as a result they had insufficient focused power to force transformation of the economy.

It makes me believe discipline and stringent policies intervention initially shape societies and put them on the economic growth path. The evolution of these new societies over the course of time will converge to democracy and the free market economies.

Conversely Asia’s growth can be a good example for successful model for societal and economic growths. It has taken place within the past three or so decades.  

China’s growth caught the eyes of observers. The world looks at China as a symbol of authoritarianism. In contrast the Chinese development model has backed with a strong authoritarian government through which China has done a great job modernizing their economy. However the China model has not finished working itself out.

India is another interesting case that is becoming an economic powerhouse but they are doing it almost in spite of themselves. In its early years, many of the Indian governing elite were educated in England in Marxist economics. They had a socialist orientation. As a result the government still continues some residual suspicion of entrepreneurship. And yet they are doing reasonably well.

South Korea’s experience, it was hardly a democracy until about twenty years ago. And yet its economic success paved the way for an established democracy. Confucius culture values set a great deal of discipline, order and force to guide initial stage and bumpy phase of growth and transformation.

The Japanese experience, in a different way, is even more interesting. The Meiji restoration was a highly mobilized system of economic and technological innovation organized from top down. It created the preconditions for what later on USA did in Japan after World War II and then produced a democracy that is now constitutionally well-established.

Taiwan also started as an authoritarian system, not very different from the Chinese in terms of economic development. The government promoted a fair amount of free enterprise in rural areas, low-scale business then liberalization. Economic development took off and democracy followed.

One of the advantages of the EAST capitalism system and growth model is that economies can grow at a breakneck pace, and turn down the growth speed when it turns out that is about to go into some harmful directions by imposing the policy correction without any problem of losing face.

My key point is that discipline and in some high degree policy intervention are essential when

• Economic and societal transformation are about to take off. Early and raw democracy without institutional enforcement, will be derailed and ended up to its failure 
• Economies move on bumpy roads and crisis. There is no particular sense of anxiety about the US and EU to emulate the EAST capitalism model, in order to move out from their crisis.

A Green Emperor, a lesson for policymakers

By Shahab Sabahi

Energy and Environment - Policy analysis research group

A year and so into my vegetarian diet, I now feel further discipline in my life. My temper is under control and I can deal with daily affairs much better than before.

So it seems that is the time to share one of the interesting historical facts which describes how vegetarianism strategy changed the structure of a society and caused peace and prosperity.  (My research work on society development and evolution in EAST)

Agra, a city in India, sits on the banks of the river Yamuna and surrounded by eyes-delighted green landscape. The city is well known for the Taj Mahal, a magnificent architecture that built during the Mughal Empire reign in the sixteen century. However it is not the only historical landmark over there.

Agra reflects the history of the South East Asia’s golden age when people of that part of the world lived in peace and prosperity.

Akbar, the greatest of the Mughal emperors had significant share in the golden age development. His effective policies brought social development and economic growth for his kingdom. He left behind a rich legacy of tolerance and cooperation that had been strikingly demonstrated in his own days’ policies. During his reign, the nature of the state changed to a secular and liberal one, with emphasis on cultural integration and human values. What really influenced his behaviour?

To control his aggression and mind, out of sensitivity to Hindus, he became a vegetarian, gave up hunting a sport he greatly enjoyed and forbade the sacrifice of animals on his birthday and any holy rituals. This move made available a plenty of food for younger generation and also as an environmental benefits sustained the exploitation of natural resources for the future generations. Furthermore vegetarianism gave Akbar a sense of ethical treatment of tolerance for humankind.

When an emperor could be in command of his internal forces thus his subjects would follow him and consequently the whole society would enjoy.   

The point is not to correlate vegetarianism and development. The message of the story is that vegan is not just a diet. In effect vegetarianism grants discipline and balance, where balance in lifestyle and discipline in bahaviour lead to stability, openness and dynamic resource allocation which are necessary for advancing society. 

Civilization can lead to universal peace when a generous, liberal society is created by policymakers who believe to discipline and practice it and check everything in balance

Neo-Capitalism requires stringent regulations in financial markets

By Shahab Sabahi

Energy and Environment - Policy analysis research group

In theory, free-market, globalization and free capital mobility are welfare-enhancing. Theory says that they promote better and more efficient allocation of financial resources worldwide. But the history of globalization is witness to large and volatile short-term capital flows, complicating macroeconomic management, destabilizing weak financial systems, and disrupting growth in emerging economies. It poses a question “why did capitalism work for the west but fail when it exercises in a global scale?”, “Should It be altered?

Globalization compelled financial markets integration. Rapid financial liberalization did not allow financial market regulators came up with effective and sound market rules, therefore short term capital flows for touch & go investments turned to become the taste of investors. Historically, short-term capital flows are absolutely volatile compared with long-term alternatives like foreign direct investment.

The recent global economic crisis in Europe and the US demand a stronger political momentum for significant capital market development and regional integration. Now financial stability is the foremost challenge of policy-makers’ to address. It requires a wise approach as I list below. 

Financial market liberalization must now be managed by mechanisms to ensure the effective use of capital. Conditions should be imposed for rendering capital flows more stable and long-term to economies. Macroeconomic policy reform should be set as top priority with emphasize and effective control in high level of financial sector and market development; and effective institutions and good governance. (Iwan Aug 2011). 

New macroeconomic policy and regulatory frameworks should allow only longer-term investments. Capital markets must be made more liquid, more diverse and innovative regional financial products should be created. This can help unlock capital to meet those regions and sectors that seek huge infrastructure financing needs.

It is equally important to ensure financial sector and market development benefit the wider public, with inclusive measures to broaden access to finance for families, small- and medium-sized enterprises, and other traditionally underserved market segments.

Please do not forget free market should not be as free as a bird. Without stringent regulations in financial markets, they will come short of maximizing the benefits of all. A new framework for Capitalism is needed.

Neo-Capitalism – Answer to Janet Daley

By Shahab Sabahi

Energy and Environment - Policy analysis research group

The Telegraph Aug 9th 2011 Janet Daley posted a piece titled “If we are to survive the looming catastrophe, we need to face the truth”.

Her piece was quite lucid and attracted some 1700 readers who commented back. She expresses her idea that a capitalist economy cannot support a socialist welfare state. BUT it is not a fair conclusion whereas she built her argument based on this belief that existing CAPITALISM model, legacy of Reagan and Thatcher’s era, still works and is legitimate.

To get a reasonable perspective and insight, we should take a political economy view. In effect Capitalism in its old fashion and in global scale is not an effective model to fulfill needs of society and cannot provide security.

The existing capitalism went wrong when U.S. president Ronald Reagan and British Prime Minister Margaret Thatcher adopted and implemented the financial market deregulation policy some two decades ago. The 90s the financial market deregulation became synonymous with economic growth and prosperity in Asia which ended in the great Asia financial crisis in the late 90s. Asia wisely managed the crisis and started to regulate the currency exchange rate where P. Krugman and G. Soros did not advocate it for the west.  It was thought that free market would turn to become a gateway to global socio-economic stability and economic growth. However, the economic collapse of 2008 - the result of that shortcoming in west-capitalism - shook the old fashion capitalism from its glorious and thought-perfect position.

In fact a social welfare USED to be a product of a regulated free market and a capitalism thought which faded away a decade ago. 

Time passes and brings changes. Now it is time for western countries to look at the Neo-Capitalism which is practicing by Brazil, China and to some extend the Latin Americas such as society safety net (Chicago 2011, Francis Fukuyama). There is something can be learnt and incorporate into the old capitalism model in order to make it more functional. A new form of relationship between government, regulation, and the free market on a global scale must be conceptualized to live up society’s expectations.

Certainly this Neo - Capitalism can support a welfare state, Ms Janet Daley.  

Shortcomings of Capitalism – A new framework ought to be sought

By Shahab Sabahi

Energy and Environment - Policy analysis research group

BBC program, Dateline London on August 7, 2011, made a short debate on global financial crisis.  One of the program’s guests went in his way to question capitalism’s ability for solving the crisis. Although his argument contained rather the elements of emotions than critical reasons, it recalled me one of my fundamental question in our current research work.  Is the Capitalism framework powerful enough to provide guide for globalization OR must an alternative be sought?   
  


The recent US credit downgrade was the second wakeup call for political economists to profoundly review and adjust the capitalism theory in a way to address our today’s globalize economic problems. Yet, admin of one of the worst financial crises ever, policymakers, both side of Atlantic continue to adopt failed policies and weak strategies based on the obsolete capitalism theory  that threaten to curtail recovery efforts. Furthermore keep on this way, pushes policymakers to grow more solid in their ideology and irrationality that will result in dogmatism.  Joseph Stiglitz, in his book “Free Markets and the Sinking of the Global Economy”, considered the western capitalism – are bound for economic failure if they choose to undertake “another costly experiment with ideas that have failed repeatedly.”

Inevitably globalization has caused a shift in economic activity and increased per capita GDP across the world. Yet measuring poverty remains one of the most contentious issues. Poverty and the recent financial crisis pose the most challenging question to the capability of the capitalism theory to guide an integrated global economy. 

Capitalism fails to address the externality of the emission of greenhouse gases, the loss of domestic jobs and the leakage of energy and labor intensive industries of the developed countries to developing countries. Capitalism is short to guide any formulations, regulations and legislations that are undifferentiated across the globe.

A powerful ideology is needed.  Western-style deregulated capitalism brought greater material well-being only to riches (Shell, BP, Exxon, Apple, etc have made profit since the early 2011). Indeed, with this ideology over the course of last thirty- year average Americans income declined (my earlier post on August 2, 2011).

I strongly believe that the way out of this financial crisis rests on

1.      greater equality,
2.      stronger regulation,
3.      a better balance between the market and government.

As we recently saw, a rigid ideological friction and special interests in the US house and the white house detoured the US traditional path of decision (a pragmatism and realistic ground to super dogmatism).

These ridiculous decisions will likely occur again, unless a fresh capitalism ideology is outlined. 

The Essentials

By Shahab Sabahi

Energy and Environment - Policy analysis research group

 

This is thirtieth post onto my blog. So I intend to share the principles of what I’ve subscribed. They may work out your lifestyle, if so apply them　 Eastern philosophy

1. Be who you are. Listen to others and balancing confidence with wisdom,
2. Be disciplined with yourself to be a creative person who adds value to its life and others’,
3. Aim high, quality beats quantity every time. Understand and keep understanding until you become the expert.
4. Expand your horizons by stretching yourself. Solidify contacts and seek people you can work with to expand your realm. Think leverage.
5. Plan and act and act and plan. In other words take the offensive. Seek the life you want for it will not come to you.　
6. Develop a sense of urgency. Remember how quickly a week goes by these days.　
7. Get the odds on your side by developing the mismatch.　
8. Know when and when not to fight,
9. Understand how to handle both inferior and superior odds,
10. United teams win every time,
11. Success is when preparation meets with opportunity,
12. Do not interfere with trusted subordinates or helpers

Eastern Philosophy

Post WWII and its legacy for the US economy

By Shahab Sabahi

Energy and Environment - Policy analysis research group

It is very much in the air that Reagan's economic performance was
astonishing. It is weird, although our brains are wired and evolved for
exploring reasons of every event; we have never asked ourselves "what legacy
did the post WWII, US presidents leave behind for Reagan?" In reality, the
hero who made American's heydays was not Mr. Reagan. Do you know WHY?

The US economy had long started to grow before, the Reagan administration
came to the office. Thanks to the great jobs and policies of the
predecessors of Reagan, employment, GDP and productivity hit record high.
For evidence, below is a chart that displays median family income in
constant dollars in the US since 1947 to 2009 (source:
http://www.census.gov/hhes/www/income/data/historical/families/index.html )

The income grew about 70 percent between the late 40s to the mid 70s. The
increase owed to high-tax, strong-union postwar generation, effective
foreign policy, productivity improvement and clear, free-party and
national-wide vision which set by REAL leadership.
The 80s, the US economy got flat however the US citizens enjoyed themselves
with more cash in packets (from previous generation) to spend rather saving.

YES Mr. Reagan did nothing but made fame.