Maynard Keynes

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A 14-Year-Old Girl Explains How We Can Stop The Addiction To Economic Growth





Hi! I’m Amy Johnson-Martinez, the 14-year-old girl who’s saving the earth from environmental destruction. A lot of people don’t understand how the destruction of the earth is connected to our addiction to economic growth. Actually, a lot of people don’t even realize that we’re addicted! Personally speaking, I think it’s kind of weird that economists don’t tell us about this. So I guess it takes a 14-year-old girl to tell you about it! Economists always say, “The economy has to keep growing or else it will collapse.” But it can’t grow forever, because the earth is running out of resources. Actually, it’s already starting to happen. That’s a big reason why the economy is getting worse.

 
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Behold The Face Of Central Banker Hubris





March 18, 1996. It was the height of the dot-com boom years. And gracing the cover of Fortune magazine was a photo of a rather smug looking Alan Greenspan, then Chairman of the US Federal Reserve.  The headline across the top-- "It's HIS economy, stupid". The inside story was entitled "In Greenspan We Trust".  And the article went on to suggest that, no matter WHO won the presidential election that year between Bill Clinton and Bob Dole, Greenspan would still be running the economy. And handily.  This is a major testament to the state of our financial system. We award a tiny banking elite nearly totalitarian control over our money supply... and by extension, the economy.  We're just supposed to trust that they're good guys. Competent guys. That they know what they're doing.  Fast forward almost two decades. Long Term Capital Management. The NASDAQ bubble. The real estate bubble. The credit crunch. The mortgage crisis. The banking crisis. The sovereign debt crisis.

 
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Guest Post: Is Saving Money Bad For The Economy?





Our grandparents believed in the value of thrift, but many of their grandchildren don’t. That’s because cultural and economic values have changed dramatically over the last generations as political and media elites have convinced many Americans that saving is passé. So today, under the influence of Keynesian economists who champion government spending and high levels of consumption, thrift has been devalued (and is even punished).  It is the government’s role, Keynes’s followers believe, to keep the boom going through spending. So it is consumption, not supply, that makes a successful economy, they say. Mainstream media rehashes the message that the consumer, not the producer, is the biggest part of the economy. Politicians agree... But, despite the Keynesian sentiments of much of our political and media elites, we owe it to our grandparents to re-learn the lessons of thrift.

 
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Guest Post: Bitcoin: As Good As Gold?





Only a few years back, the majority of people were saying that the dollar was as good as gold. Today, even those who insist that fiat currencies are not only safe, but the only means by which commerce can reasonably occur, are admitting that they are getting a bit nervous regarding the assurance that their own currency will not be either somehow confiscated or grossly devaluated. But there is a new currency arising - Bitcoin - and it promises, like banknotes before it, to solve all the problems of currencies. Just as paper gold is proving not to truly exist, except as a promise by financial institutions, and fiat currencies are also teetering on the edge, there is every reason to believe that the latest in “theoretical” currencies may disappear at some point in the future. However, as they have throughout millennia, precious metals will continue to shine in all corners of the globe.

 

 
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Guest Post: Did Capitalism Fail?





Until six days before Lehman Brothers collapsed five years ago, the ratings agency Standard & Poor’s maintained the firm’s investment-grade rating of “A.” Moody’s waited even longer, downgrading Lehman one business day before it collapsed. How could reputable ratings agencies – and investment banks – misjudge things so badly? Regulators, bankers, and ratings agencies bear much of the blame for the crisis. But the near-meltdown was not so much a failure of capitalism as it was a failure of contemporary economic models’ understanding of the role and functioning of financial markets – and, more broadly, instability – in capitalist economies. Yet the mainstream of the economics profession insists that such mechanistic models retain validity.

 
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Do You have a ‘Bullshit’ Job?





Don’t get me wrong, I’m not talking about the guy that moans over his doughnuts and café latte every morning that he hates his job. He hates his boss and he hates the wife and the kids even more and that’s why he still comes into the office

 
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Gold Confiscation





 

In 1933, FDR confiscated the gold of Americans. This common telling portrays it as a simple case of robbery. It makes people wonder if 1933 is a precedent. I don’t think it is so simple.

 

 
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Financial Times: "World Is Doomed To An Endless Cycle Of Bubble, Financial Crisis And Currency Collapse"





It's funny: nearly five years ago, when we first started, and said that the world is doomed to an endless cycle of bubble, financial crisis and currency collapse as long as the Fed is around, most people laughed: after all they had very serious reputations aligned with a broken and terminally disintegrating economic lie. With time some came to agree with our viewpoint, but most of the very serious people continued to laugh. Fast forward to last night when we read, in that very bastion of very serious opinions, the Financial Times, the following sentence: "The world is doomed to an endless cycle of bubble, financial crisis and currency collapse." By the way, the last phrase can be written in a simpler way: hyperinflation. But that's not all: when the FT sounds like the ZH, perhaps it is time to turn off the lights. To wit: "A stable international financial system has eluded the world since the end of the gold standard." Q.E.D.

 
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"Open Your Eyes!"





It is an odd affair these days made odder by the political desires of those that control the switches. The worst offender is China, followed by Europe and then it would be the United States in last position. Made up numbers, fantasy figures, smoothed out data are all the bread and butter of each region. It is the central banks that are running the world, it is the governments that are distorting events and we are left, like homeless children, to accept the succor that is provided. Because there is no choice we are stuck eating their food but we do not accept the fantasy on the package naming the ingredients. It is a collective attempt to Bamboozle!

 
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For The Next Fed Head, Obama Seems To Be Choosing Between A Yawn And A Hiss





Based on media reports over the past few weeks, there are two clear front-runners in the competition to be named Ben Bernanke’s successor as Fed chairman. Current Vice Chair Janet Yellen sits in one corner, former Treasury Secretary and National Economic Council (NEC) Director Larry Summers in the other corner, and pundits are actively placing their bets. Yellen is "soft-spoken, even-tempered, 100% mainstream academic economist who boils the world down to simplistic concepts," so similarities between Bernanke and Yellen are far stronger than the differences. A hand off from one to the other would be about as eventful as a rainy day in Seattle. Compared to Yellen, Summers has a longer history as a heavyweight policymaker but as Charles Ferguson wrote, “rarely has one individual embodied so much of what is wrong with economics, with academe, and indeed with the American economy." And that’s what it seems to be coming down to: a choice between a yawn and a hiss. Why not appoint someone with a track record of getting things right, you ask? Well, that would require a culture of accountability in the White House. Does anyone remember when we last had that?

 
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A Modest Proposal





Decades ago, John Maynard Keynes famously wrote in his book The General Theory: "If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines. . . and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again. . . there need be no more unemployment." To Keynes, all that mattered was that people were employed doing something, anything. The quality of employment didn’t matter. Clearly this line of reasoning worked out well for the Soviets. So considering that the ‘quality’ of jobs doesn’t matter in this Keynesian worldview, though, we’ve come up with a simple idea.

 

 
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What’s Austerity?





As the EU agrees to fund another bailout deal to help Greece rise from the ashes, providing them with another $8.7 billion in financial aid, the question that begs an answer is: will this have any effect on the austerity that is being imposed on the country. Throwing good money after bad?

 
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Guest Post: Paul Krugman The Marxist





Someone once wrote that criticizing economist and New York Times columnist Paul Krugman and his "vulgar Keynesianism" is the internet’s favorite pastime. All along, the Princeton prof has stayed true to the cause of aggressive government action to forestall the downtrodden economy. Large fiscal expenditures, aggressive monetary stimulus, increased legal privileges for organized labor, and boosting the degree of state pillaging – Krugman is the caricature of a tyrannical apologizer who will defend the cause of rampant statism at any cost. But now, it appears Krugman has gone overboard with his progressive moaning. Instead of getting bogged down in the economic imbecility that frequents Krugman’s twice-weekly diatribes; there is a fallacy more fundamental in this latest theorizing. What Krugman is embracing in his latest attack on historical cases has much more to do with the man’s epistemological bent and approach toward economics.

 
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Guest Post: Market Punditry As Astrology





Is recent market behavior the beginning of a market turndown? No one knows, although it is easy to find people providing “answers.” The value of these predictions approach those of astrologers and fortune-tellers.

 
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