{"id":22538,"date":"2017-01-22T17:02:10","date_gmt":"2017-01-22T22:02:10","guid":{"rendered":"http:\/\/olduvai.ca\/?p=22538"},"modified":"2017-01-22T17:02:27","modified_gmt":"2017-01-22T22:02:27","slug":"policy-makers-like-generals-are-busy-fighting-the-last-war","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=22538","title":{"rendered":"Policy Makers, like Generals, Are Busy Fighting The Last War"},"content":{"rendered":"

Policy Makers, like Generals, Are Busy Fighting The Last War<\/a><\/h3>\n
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The Maginot Line formed France’s main line of defense on its German facing border from Belgium in the North to Switzerland in the South.\u00a0 It was constructed during the 1930s, with the trench-based warfare of World War One still firmly in the minds of the French generals.\u00a0 The Maginot Line was an absolute success…as the Germans never seriously attempted to attack it’s interconnected series of underground fortresses.\u00a0 But the days of static warfare were over\u00a0\u2013 in 1940, the Germans simply drove around\u00a0the line\u00a0through Holland and then Belgium.\u00a0 Had the Germans\u00a0replayed WWI\u00a0and made a direct attack, the Maginot Line likely would have done its job.\u00a0 But Hitler wasn’t interested in a WWI re-do, so the fortifications were quickly rendered moot.\u00a0 France, Europe, and the world would pay the price for generals fighting the last war rather than adjusting to the contemporary risks they faced.<\/span><\/div>\n<\/div>\n
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In 2008, the economic generals at the various central banks likewise pulled out\u00a0the playbook to refight the great depression…not realizing, this time was an entirely different opponent.\u00a0 Federal governments and central bankers presumed doing what they had always done would again win the day.\u00a0 Cut interest rates (this time to zero)\u00a0to incent both public and private entities to refinance existing debt loads and undertake new, greater leverage.\u00a0 This nearly free money would reduce\u00a0debt service levels and the new loans would ignite a new wave of economic activity in the form of capital expenditures and\u00a0small business creation.\u00a0 Economic multipliers and velocity would ensure general prosperity with job and wage growth.\u00a0 Instead, it’s the “Maginot Line” all over again for our economic generals as economic activity grinds to a stall\u00a0absent the \u00a0illusory asset bubbles.\u00a0\u00a0<\/span>
\nBTW – if you are not a fan of charts or visual representations…this is not the article for you and likely best to\u00a0stop here.<\/span><\/div>\n<\/div>\n<\/div>\n
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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Policy Makers, like Generals, Are Busy Fighting The Last War The Maginot Line formed France’s main line of defense on its German facing border from Belgium in the North to Switzerland in the South.\u00a0 It was constructed during the 1930s, with the trench-based warfare of World War One still firmly in the minds of the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[98,242,14704,383,8222,431,14705],"class_list":["post-22538","post","type-post","status-publish","format-standard","hentry","category-economics","tag-business-cycle","tag-economic-policy","tag-economica","tag-great-depression","tag-great-financial-crisis","tag-interest-rates","tag-maginot-line"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22538","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=22538"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22538\/revisions"}],"predecessor-version":[{"id":22540,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22538\/revisions\/22540"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22538"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22538"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}