The Wave Model Of Economics

Remember the posting, "The Wave Model Of Economics" on the world and economics blog. 

In this model waves exist in the economy over time. A "right wave" tends to be followed by a "left wave", which is followed by another "right wave". 

A country's leftward and rightward political parties tend to alternate in the same way but these left and right waves are longer than the typical alternation between rightward and leftward parties. The posting focuses on the U.S. but the same principle applies, at least to some extent, to any free-market democracy.

During a right or left wave both parties continue to alternate in power but during the right wave the whole system leans more to the right, and during the left wave to the left. Bill Clinton was a Democrat president during a right wave and Donald Trump was a Republican president during a left wave.

Joseph Biden's announcement of plans for the economy is moving the economy leftward. A recent article in Time Magazine made it sound like this is something new. 

But I see this as a continuation of the left wave that began with the Obama presidency. The changes made by Donald Trump were mainly about "making America great again" from a global perspective. The economic changes that the Trump administration made in the U.S., such as cutbacks in food stamps and Medicaid, were certainly rightward, but were not enough to terminate the left wave that was in progress.

The underlying reason for these "waves" in the economy, as well as the usual alternation of leftward and rightward parties, is complexity. Our economy is as complex as we are. This makes it difficult to grasp the entire economic picture. It is easier for each of us to see either the left or the right. 

So what ends up happening is that first we go too far in one direction. We then try to compensate for it by going in the opposite direction, only to go too far so that we then have to compensate for that by going back in the first direction, and on and on.

Here is a link to "The Wave Model Of Economics":

http://markmeekeconomics.blogspot.com/2011/08/wave-model-of-economics.html?m=0