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Guest Post: Why Krugman and the Keynesians Are Lackeys for the Neofeudal Debtocracy

Tyler Durden's picture





 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

If you set out to design a system that would implode with devastating consequences, it would be the Keynesian Cargo Cult's neofeudal financialization debtocracy.

 

The heart and soul of the Keynesian Cargo Cult is the dogma that the cure for all economic ailments is more aggregate demand, i.e. consumption. The Keynesians' fanatic faith in boosting consumption would be merely childishly naive if it didn't directly support a parasitic neofeudal debt-serfdom. Sadly, Krugman and his fellow cultists' single-minded parroting of "aggregate demand" makes them well-paid lackeys and toadies for an extractive neofeudal-neocolonial debtocracy.
 
 
If you are unfamiliar with the neofeudal, neocolonial model of financialization, please review:
 
Debt = Serfdom (April 2, 2013)
Crisis and Opportunity (February 1, 2013)
 
Like all cargo cults, Keynesians maintain a magical-thinking belief in the power of wanting more stuff. But in so doing, they embrace and support the mystification that protects the power structure that is dooming the nation and its economy to stagnation and eventual collapse (call it "reset" if you prefer).
 
By focusing on increasing demand and consumption by any means, the Keynesian Cultists miss the key dynamics of sustainable growth and fail utterly and completely to acknowledge the corrupt and exploitive nature of our cartel-state crony-capitalism economy.
 
Has their naivete blinded them to the power structure of the neofeudal-neocolonial debtocracy? It seems unlikely, and so that leaves a less savory motivation: co-option.They're raking in big bucks as apologists for cartel-state crony-capitalism, and as a result they don't dare question the power structure, much less hazard a critique of the hands that feed them.
 
The Krugman-Keynesian Cargo Cult is incapable of distinguishing between productive investment and profligate spending. Keynesian cultists focus on an incredibly blunt and misleading indicator of gross domestic product: GDP. Burn down a house and rebuild it, pay people to dig a hole and fill it, build bridges to nowhere, buy costly weapons systems the military doesn't even want, purchase boatloads of particle board furniture from China that's headed for the landfill: it's all equally wonderful to the Keynesian apologists because it boosts GDP.
 
Incredible as it seems to GDP-worshippers, there is a difference between productive investment and squandering money. A productive investment generates a multiplier effect: most importantly, it increases productivity which then creates value, surplus and wealth.
 
There is no multiplier in building McMansions in the middle of nowhere, bridges to nowhere, particle board shelving from China or a university degree in film studies, etc. Housing is consumption, a bridge to nowhere is consumption, particle board shelving is consumption, and a $180,000 bachelor's degree in a field of study with near-zero economic premium in the real economy is also consumption.
 
The Keynesian Cultists and their fellow apologists/neofeudal apparatchiks attempt to mystify this consumption by labeling it "investment." The misdirection may fool craven politicos seeking to buy votes, but the real world is not fooled.
 
Value, surplus and wealth can only be created by increasing productivity. If an investment doesn't increase productivity, it is either malinvestment, misallocation of scarce capital or consumption.
 
How does buying particle board shelving from China improve productivity in America? It does not. Does dumping trillions of borrowed dollars into cartels like sickcare, Big Pharma, higher education or the military-industrial complex increase productivity? No, it actively lowers it by diverting national income to the most corrupt, inefficient and least productive sectors of the economy.
 
The Keynesians are also blind to the dynamic of improving household income. It their magical-thinking universe, buying particle board shelving from China (yippee, aggregate demand!) is supposed to magically turn lead (wasteful consumption) into gold (higher wages). Wages can only increase as productivity increases. Any other apparent increase is simply a subsidy that shifts money from a more productive sector to a less productive sector.
 
This is how you end up with a healthcare system that is 50% fraud, paper-shuffling, and inefficiency. We know America's sickcare is 50% waste, fraud and paper-shuffling because our competitors provide their citizens healthcare for half of what we spend per person.
 
The Keynesians' inability to distinguish between consumption and investment that increases productivity is fatal.
 
The Cargo Cult is also blind to the metric that matters: debt and the ability to service debt. As financialization creates an unproductive nation of debt-serfs who depend on debt to fund their consumption, household income declines. This leaves households less able to service higher debt.
 
But since aggregate demand (i.e. financialization) is dependent on ever-expanding debt, the system falls apart once households cannot increase their debt loads. ( The Global Status Quo Strategy: Do More of What Has Failed Spectacularly)
 
In response, the Status Quo increases government borrowing and spending (either directly, or for subsidies to favored cartels like the mortgage industry) to fill the gap left by debt-serfs unable (or unwilling) to borrow more for shelving from China, etc.
 
The problem with borrowing money for unproductive consumption is the cheap shelving breaks and is hauled to the dump but the interest payment remains--in the case of government borrowing, essentially forever. Unproductive spending of cash is wasteful, as that scarce capital could have been invested in productive assets.
 
But spending borrowed money on unproductive consumption--McMansions, degrees in critical studies, duplicative medical tests, marginal-utility meds and weapons systems--is truly insane, for the cost of that consumption continues to rise over time as interest is paid, until the debt is retired (paid off) or renounced (defaulted). All that interest is diverting income that could have been invested in higher productivity.
 
The Keynesian Cultists are also blind to the enormous opportunity cost of funding consumption with debt. Over time, servicing debt bleeds the economy dry as productivity, wages and investment stagnate.
 
If you set out to design a system that would implode with devastating consequences, it would be the Keynesian Cargo Cult's neofeudal financialization debtocracy. All the incentives favor increasing debt, misallocation of capital and mindless consumption, and all the disincentives weaken investments in productivity and the creative destruction of malinvestments and subsidies to favored cartels.
 
Why do the Keynesian Cargo Cultists continue dancing around the campfire waving dead chickens and worshipping aggregate demand? Toadies, lackeys and apologists are always well-paid to support the party line. Aggregate demand, aggregate demand, brawk!
 


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Wed, 04/24/2013 - 10:28 | Link to Comment lolmao500
lolmao500's picture

Shut up peasants! Don't you question the King! OFF WITH YOUR HEADS!

Wed, 04/24/2013 - 10:31 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Debt is wealth, liquidity is prosperity, equity is a liability, value is disposable, production is consumption, up is down, left is right, this dog meows.

Now here is your saltless potato and your iPhone, serf.  Start twiddling.

Wed, 04/24/2013 - 10:39 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

How much future demand can you pull into the present without impacting demand in the future?  How many cars can one buy before you don't need another car?  Or homes?  Pulling future demand for durable goods into the present just means there will be fewer buyers of said durable goods in the future.  Unless you start making those goods of less quality, which they are.  But that is just another sign of inflation.  If your car costs the same but lasts half as long, that means its cost really doubled.

Quit messing with the free market.  When people need something, they will buy it. 

Wed, 04/24/2013 - 10:43 | Link to Comment Pladizow
Pladizow's picture

Yes, a plantation is the business model!

Wed, 04/24/2013 - 10:57 | Link to Comment nope-1004
nope-1004's picture

Keynesians have proved over the last decade that "Economics" is not a science, but a theory.  Trying out different theories during times of market weakness and human hardship is not what I call professional.  First ask the question WHY the weakness appeared, then the solution becomes simple.

The notion that you can solve a debt cirsis by piling more debt onto the existing debt seems completely naive.

 

Wed, 04/24/2013 - 11:07 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Boris is have "Theory of Aggregate Demand". All together, everyone is demand break face of Dr. Krugman and ancillary activity is result in economic boom!

Wed, 04/24/2013 - 11:22 | Link to Comment KickIce
KickIce's picture

That might be the theory of aggresive demand.

You mean to tell me the bankers aren't are friends and they're not doing this for us common folk?

 

Wed, 04/24/2013 - 11:47 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Boris is have theory of bankster and conspiracy theory...

Bankster is not friend, is not collude, but is cut of same cloth. What can attribute to sheer greed, do not as need to attribute to conspiratorial complexity.

Wed, 04/24/2013 - 12:24 | Link to Comment El Viejo
El Viejo's picture

Gimme a big tax break and I'll spend it on something. I promise.

Wed, 04/24/2013 - 13:23 | Link to Comment KickIce
KickIce's picture

Agreed, punch is much to kind for these bastards.

Wed, 04/24/2013 - 11:18 | Link to Comment redpill
redpill's picture

To them it's not even a theory, it's a religion.

Wed, 04/24/2013 - 12:03 | Link to Comment tarsubil
tarsubil's picture

And you are spoiling the ceremony, heretic!

Wed, 04/24/2013 - 14:21 | Link to Comment Ignatius
Ignatius's picture

That cunt Clinton -- I think it was at Davos a few years ago -- was talking about how we needed to increase world credit (debt) by 100 trillion over the coming decade, to get the economy going.  Criminal.

This debt ponzi has a powerful and vocal constituency.

Wed, 04/24/2013 - 15:40 | Link to Comment SHRAGS
SHRAGS's picture
http://www.weforum.org/news/over-us-100-trillion-additional-credit-neede... Over US$ 100 Trillion Additional Credit Needed to Support Global Growth

New York, USA, 18 January 2011 – Credit levels will need to double over the next 10 years, growing by US$ 103 trillion, to support consensus-projected economic growth. This doubling of credit could be achieved without increasing the risk of major crisis, finds More Credit with Fewer Crises: Responsibly Meeting the World’s Growing Demand for Credit, a report released by the World Economic Forum in collaboration with McKinsey & Company. The study develops a detailed global credit model using historical credit volumes and forecasting potential credit demand to 2020 across 79 countries, representing 99% of world credit volume. The study applies a sustainability methodology to the projected credit demand, using newly developed metrics to answer the following two questions: Will credit growth be sufficient to meet demand? Is there a risk of future credit crises and, if so, where?

 

The report finds that meeting credit demand will be challenging. Globally, financial protectionism may constrain cross-border financing, a key to the provision of sufficient credit in the next decade, as global imbalances persist. In addition, the regions will experience varying issues: Asia will face the challenge of meeting the high credit demand growth of US$ 40 trillion with less developed financial systems and capital markets. In the European Union, a further US$ 13 trillion of credit in the form of bank lending will be needed. To supply this, banks will require additional capital that, after retained earnings, could lead to a capital shortfall of US$ 2 trillion. Analysis shows that the US would continue to need to draw on global savings, potentially by up to US$ 3.8 trillion in 2020, in order to fund its credit needs, unless there is a marked increase in US domestic savings rates.

 

“Leaders in the private and public sectors must take decisive actions to avoid contributing to credit hotspots and coldspots, while still meeting the US$ 100 trillion of credit demanded to sustain economic growth over the next 10 years,” said GianCarlo Bruno, Director, Financial Services Industries, World Economic Forum.

 

espite widespread deleveraging, a number of “hotspots” – i.e. segments where credit levels grow in excess of sustainable levels – will persist, while new ones emerge. By 2020, these will include retail credit segments in countries representing almost half of the global GDP. By contrast, government credit hotspots are projected for a much smaller set of countries, between them representing 13-14% of world GDP. In wholesale credit, Asia and Western Europe will be the main drivers of hotspots in 2020

 

The report finds that the large projection in credit demand can be safely met, but financial institutions, regulators and policy-makers need more robust indicators of unsustainable lending, contagion risk and credit shortages – and better mechanisms to ensure credit promotes development.

 

“This report is a timely contribution to the discussion of what’s needed to secure stable and sustainable credit for the world economy in the years ahead. Given the huge financing needs of both developed and developing markets, it’s a crucial issue for policy-makers and the financial industry to tackle globally,” said Deven Sharma, President, Standard & Poor’s.

 

“The banking system has a critical role in supporting future economic growth and this report highlights ways in which it can do so with reduced risk of crises. In particular, there is a pressing need for continued development of capital markets in developing economies to support their continued economic success,” said Charles Roxburgh, Director of McKinsey Global Institute.

 

The report concludes with eight recommendations that financial institutions, regulators and policy-makers can follow today to ensure sustainable credit levels for the future:

 

1. Integrate the concepts of sustainable credit into the regulatory agenda
2. Create standardized government accounting practices to increase transparency and accurately assess sovereign finances
3. Encourage responsible borrowing through financial education
4. Encourage financing of local “coldspots” through targeted mechanisms
5. Task a single agency with monitoring global credit levels and system-wide credit sustainability
6. Align banks’ risk appetite with sustainable credit criteria
7. Drive innovation by financial institutions, developing new mechanisms that can safely meet future global credit needs
8. Establish goals for efficient and deep capital markets by 2020 in developing economies

 

The findings and recommendations of the report will be discussed by experts from the industry, policy-makers, regulators and academics at the World Economic Forum Annual Meeting 2011 in Davos-Klosters, Switzerland.

 

This report was developed by the World Economic Forum in collaboration with McKinsey & Company.

 

Notes to Editors
For more information about the Annual Meeting 2011 http://wef.ch/Davos2011
View the best pictures from the Annual Meeting on Flickr at http://wef.ch/pix
Watch live webcasts of the sessions on Livestream http://wef.ch/live
Watch the sessions on demand on YouTube http://wef.ch/youtube or http://wef.ch/youku
Ask a world leader on YouTube http://wef.ch/davosdebates
Become a fan of the Forum on Facebook at http://wef.ch/facebook
Follow the Forum on Twitter at http://wef.ch/twitter and http://wef.ch/livetweet
Read the Forum Blog at http://wef.ch/blog
Read Forum reports on Scribd at http://wef.ch/scribd
Follow the meeting on the iPhone http://wef.ch/iPhone
Upcoming Forum events at http://wef.ch/events
Subscribe to Forum News Releases at http://wef.ch/news
For more information about the Annual Meeting, please visit our website at http://www.weforum.org

Wed, 04/24/2013 - 15:48 | Link to Comment Ignatius
Ignatius's picture

Thanks.  I was working from memory and you posted the link!

Wed, 04/24/2013 - 15:58 | Link to Comment steelhead23
steelhead23's picture

Chas. is right, if a bit didactic.  Look, foolishly spending money into the economy does have an effect on GDP and the like (Keynes was right).  The issue is that if the economy is to absorb the debt service costs of such stimulation, then it makes far more sense to carefully spend the money where it would be the most economically productive.  And, given the ongoing financial crisis, that debt burden is already unmanagable and Molly Ivins' first rule of holes is that if you are already in one - stop digging.  Chas. is also right that the neo-Keynesians are either blind or coopted by the rentiers because they wholly miss the power dynamic of an increasingly indebted populace.  They should read more Dickens.  But, I suppose they can be excused for their myopia because this difference in power is a political issue - and as we all know, economics has nothing whatsoever to do with politics.  Why, yes indeed, being a plantation owner is a pretty good gig.

 

Wed, 04/24/2013 - 10:45 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

Sorry guys, you are entitled to your own opinions, but you are not entitled to your own facts. It is a scientific fact that aggregate demand is the single best predictor of GDP. When aggregate demand goes up, GDP goes up. This is theory has been tested and verified for 100 years.

Wed, 04/24/2013 - 10:52 | Link to Comment Dr. Engali
Dr. Engali's picture

LOL ....It's also a scientific fact that I just dumped a Krugman in the toilet.

Wed, 04/24/2013 - 11:10 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

You are to be so lucky! Must is have hard-to-find high volume flush toilet (or very durable rubber plunger)!

Wed, 04/24/2013 - 11:19 | Link to Comment DaddyO
DaddyO's picture

Dr Engali must be a distant relative of Boris, his actions and your name bear much in common...

DaddyO

Wed, 04/24/2013 - 10:51 | Link to Comment AnAnonymous
AnAnonymous's picture

And it is also a scientific fact that the 'american' middle class has led the world to prosperity, not depletion of resources.

Signed: an American.

Wed, 04/24/2013 - 11:15 | Link to Comment McMolotov
McMolotov's picture

If the "American middle class" outsmarted the entire rest of the world and essentially stole the world's resources, how intelligent does that make the rest of the world?

According to people like you, Americans are incredibly stupid, and I actually agree with that. But then the rest of the world must obviously be filled with mega-dumb motherfuckers who got conned by those very same stupid Americans, right?

Every post of yours reeks of the nationalistic equivalent of penis envy, dude. Give it a rest.

Wed, 04/24/2013 - 11:23 | Link to Comment TeamDepends
TeamDepends's picture

What he means is that post WWII our middle class became the greatest economic engine the world has ever seen.  This, of course, was not acceptable to TPTB so they de-industrialized us, flouridated us, installed communism etc. etc.

Wed, 04/24/2013 - 11:54 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Grand conspiracy of communist agenda is contaminate and deplete bodily fluid of capitalist. All Russian school child is receive secret training and prepare for day.

Wed, 04/24/2013 - 12:15 | Link to Comment TeamDepends
TeamDepends's picture

From the horse's mouth....

Wed, 04/24/2013 - 13:35 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

When food fraud rampant, is either horse or floating pig.

Wed, 04/24/2013 - 11:12 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Dear Mr American:

My resource is deplete.

Signed, Boris (not Amerikan)

Wed, 04/24/2013 - 11:07 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Good one, MDB.

"Aggregate Demand" [giggling]

Wed, 04/24/2013 - 12:03 | Link to Comment ebworthen
ebworthen's picture

MDB - who does the measuring and calculations to come up with your "facts"?

Hold your hands apart to show me how big the last fish you caught was.

Wed, 04/24/2013 - 13:32 | Link to Comment KickIce
KickIce's picture

I think there's plenty of demand, just no money to pay for it.  Giving money to millionares helps how?  Oh yeah, it gives them the opportunity to accumulate even more real assets - all with 1s and 0s.

Edit / and zh has shown on more than one occasion they are not loaning this money out.

Wed, 04/24/2013 - 13:53 | Link to Comment Keynesian Mess
Keynesian Mess's picture

"It is a scientific fact that aggregate demand is the single best predictor of GDP. When aggregate demand goes up, GDP goes up."

 

"Trust me, you ignorant serf, you really need another BMW."

"But I can't afford the 14 that I already have and I can only drive one at a time."

"No problem, we'll lower the interest rate to zero, eliminate the down payment and defer your first payment for a year."

"But I can't afford the 14 that I already have and I can only drive one at a time."

"OK, OK, we'll send over the helicopter and drop $100,00 in your back yard."

"But I can't afford the 14 that I already have and I can only drive one at a time."

"What are you, an idiot?  Don't you know what will happen to GDP if you don't buy another one?"

"But I can't afford the 14 that I already have and I can only drive one at a time."

"You have been found unpatriotic!  Off to that newly-built prison with you!  Al least its construction to house the likes of you was part of GDP."

Wed, 04/24/2013 - 11:03 | Link to Comment DeadFred
DeadFred's picture

Why do cabs have two sun visors? One is to display the taxi license and the other is to display the driver's PhD in comparative literature. There is no clear answer to whether a degree in film studies has a multiplier or not, it's the job of the market to determine that. The problem is when the government with their monopoly on the use of force determines which investments are good or not, based at least in part on how well those investments benefit the government leaders. Krugman and the oher Keynsians could be ignored if their words weren't ultimately back by .GOV's guns. If you don't want your money supporting some connected solar panel company or a TBTF bank or Obama phones ultimately guys with guns and the authorization to use them will come to your door and tell you that what you want doesn't really matter.

Wed, 04/24/2013 - 11:08 | Link to Comment Vashta Nerada
Vashta Nerada's picture

You have hit the nail on the head.  Modern Keynesianism is now the government either borrowing or just taking your money to spend it in a belief that aggregate demand will magically bring back the bubble. 

Wed, 04/24/2013 - 11:39 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Anyone is can explain economic theory because everyone is live it, but it is master who can explain ration of chocolate as increase when is actually diminish.

Wed, 04/24/2013 - 14:13 | Link to Comment Clark Bent
Clark Bent's picture

Your mistake is that you presume that all this gyration by our "leaders" is aimed at improving the economy, or wages, jobs, whatever. This is pabulum for the naive, our government pretends in offical dialogue that these are what it wants, but their actions reveal this is a lie. Sorry, but concepts like patriotism or affection for fellow citizens or liberty are all long gone. The government's sole project is to increase its control and influence. The money it is consuming is to provide largesse to their various insider constituencies; e.g. unions, banks, demographics, the dependent, foreigners brought in to vote, etc. The game is to get sufficient support to maintain hegemony and avoid exposure. Obviously the desires of ordinary citizens for a stable currency, higher wages, safety, etc. are of no real interest to the government ruling class. You can detect by its actions that Leviathan here is not significantly different from the government of Egypt, or Venezuela. Freedom is over and so is the belief in self-governance. The ruling class is even now trying to recreate the language to control our thinking about its legitimacy. Since they no longer can make any real pretense of governing by consent, the question they are answering is upon what basis are they at all legitimate to harass others to fund their depredations? Santa Claus, mixed with speech codes is all they have come up with so far. The drones and surveillance is for the next phase. Then of course come the camps, first for containment, then to eliminate the resistors. This is not the devil's first rodeo you understand.  

Wed, 04/24/2013 - 14:14 | Link to Comment ATM
ATM's picture

Modern Keynesians are not stupid. They are government Apparatchik. Krugman and the rest are tools used to confuse some, brainwash others and stiffle the rest. They aren't just confused somehow or wrong, they are dangerous, explicit and thoughtful.

They are working the plan.

Fuckers like him are the enemy. 

Wed, 04/24/2013 - 12:23 | Link to Comment Stabile Eyes it
Stabile Eyes it's picture

to DeadFred

 

Rather have money going to renewable sun energy potential and fuels cells than people who blow up Americans and those people who blow up Americans ARE FUCKING ON MINE and EVERY AMERICANS TAX MONEY

 

 

Wed, 04/24/2013 - 12:33 | Link to Comment RafterManFMJ
RafterManFMJ's picture

Beam Me Up you sound like a man that thinks more than 3 months into the future; sadly this disqualifies you from all government and CEO jobs in Amerika.

Wed, 04/24/2013 - 10:40 | Link to Comment AnAnonymous
AnAnonymous's picture

And 'americanism' is the best thing to have ever happened to humanity...

Wed, 04/24/2013 - 10:54 | Link to Comment JOYFUL
JOYFUL's picture

This weeks lesson was sarcasm?

Wed, 04/24/2013 - 12:02 | Link to Comment Vince Clortho
Vince Clortho's picture

He's a one-trick pony.  Each post assigns the middle class as the cause of most or all the problems on the planet.

Wed, 04/24/2013 - 12:45 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

oh cool!

 

if the problem is the middle class,

then the problem will soon be solved...

Wed, 04/24/2013 - 14:17 | Link to Comment Clark Bent
Clark Bent's picture

Hello...paging The Fourth Stooge-ing. We have citizen-citizenism alert. 

Wed, 04/24/2013 - 10:49 | Link to Comment TrumpXVI
TrumpXVI's picture

You forgot, "Savings is poverty".

Wed, 04/24/2013 - 11:41 | Link to Comment nasdaq99
nasdaq99's picture

quote from beppe grillos 1998 youtube video:

 

"They print all this money.  And then they LEND it to us.  And then they CHARGE US INTEREST on it.  And then they tax the hell out of to pay the interest.  Well, sho's money is it?  Doesn't it belong to us?  Why are they charging us interest on our own money?   The country is the country.  But the government is just a legal entity."

Wed, 04/24/2013 - 10:31 | Link to Comment Doubleguns
Doubleguns's picture

Let them eat SNAP cards.

Wed, 04/24/2013 - 10:31 | Link to Comment B2u
B2u's picture

but, but, but...didn't Krugman win something....???

Wed, 04/24/2013 - 10:38 | Link to Comment Sudden Debt
Sudden Debt's picture

so did Obarry... what does that tell ya?

Wed, 04/24/2013 - 12:29 | Link to Comment Svendblaaskaeg
Svendblaaskaeg's picture

so did Manbearpig and Pauchy..

Wed, 04/24/2013 - 10:32 | Link to Comment q99x2
q99x2's picture

They know better than the common thief what they are doing. Normal people haven't figured out a way to arrest them yet. But they will.

Wed, 04/24/2013 - 10:41 | Link to Comment Doubleguns
Doubleguns's picture

Go straight to lynching....it would be faster. 

Wed, 04/24/2013 - 10:50 | Link to Comment DaddyO
DaddyO's picture

Sorry, had to down arrow that comment.

The sheeple will not arrest anybody!

Even during a full blown, grid down TEOTWAWKI event, the sheeple will be nothing but fodder for the wolves who replace the current banking overlords.

Just look at this past weeks events in the Peoples Republic of Boston...then harken back to 4/19/1775 and see what the percentage of rebels were v. sheeple.

DaddyO

Wed, 04/24/2013 - 10:33 | Link to Comment AnAnonymous
AnAnonymous's picture

So good...

Neo feudal, neo colonial... my, my, my, 'americans' are ready to fabricate anything...

The world is an 'american' world.

There is no new feature.

Wed, 04/24/2013 - 11:14 | Link to Comment JOYFUL
JOYFUL's picture

Actually the Key letter of the alphabet today is "K"...

CHS has employed a lot of them...Krugman, Keynesian...etc. etc. - the right letter but the wrong terms...to explain the downward trajectory of this most 'american' trajedy...

but those targets are simply fish in a barrel at this point...and their continued inclusion just leads to konfusion...and seems kinda -fishy- hookin in folks who wanna follow the trial to the real bad guys hideouts real bad...and making them fork off onto a false one!

Like George, Charles luvs to gorge...on a thousand words, where few will do...

Kosher Kartel Kapitalism...'s got little to do with religion...nor dietary formula...nor the 'semitic' sample of the dna kind: Khazarian Kooks in bespoke suits...hidin behind a variety of disguises, many faith-based guises...jewish\christian\muslim(Frankist\Sionist\Donmeh)lookin for loot and power. Komin soon to a krescendo very soon...less we so no to their phony wars...phony money...phoney terrorists...

and simply drop them into the wastebasket of history.

 

 

Wed, 04/24/2013 - 10:32 | Link to Comment IridiumRebel
IridiumRebel's picture

I'd really like to give Paul a wedgie.......

Wed, 04/24/2013 - 10:37 | Link to Comment Bastiat
Bastiat's picture

That would bring back bad memories, I'm sure.

Wed, 04/24/2013 - 12:30 | Link to Comment Meat Hammer
Meat Hammer's picture

I think a swirly would be better....toilet water dripping from the obligatory PhD beard.

Wed, 04/24/2013 - 10:35 | Link to Comment azzhatter
azzhatter's picture

You mean society is not better off by allowing people to buy things they can't really afford?

Wed, 04/24/2013 - 10:47 | Link to Comment rwe2late
rwe2late's picture

 "the more you spend, the more you save"

it's a win-win

Thu, 04/25/2013 - 00:28 | Link to Comment Kobe Beef
Kobe Beef's picture

"Deficits don't matter."

Wed, 04/24/2013 - 10:36 | Link to Comment buzzsaw99
buzzsaw99's picture

god damn the debt pusher man

Wed, 04/24/2013 - 10:54 | Link to Comment Confused
Confused's picture

God damn!

 

Haha, thanks for that. Gave me a good laugh. Obsure reference for some.

Wed, 04/24/2013 - 13:12 | Link to Comment Stud Duck
Stud Duck's picture

I say god damn, god damn the debt pusher man!

Good one bud!

Wed, 04/24/2013 - 14:02 | Link to Comment Keynesian Mess
Keynesian Mess's picture

EC for next Fed Chairman!

Wed, 04/24/2013 - 10:36 | Link to Comment Perpetual Burn
Perpetual Burn's picture

We should hold Economist accountable to their ideals. If they blow up the economy, they should pay for what they did. I am sure they would think a lot harder...

Wed, 04/24/2013 - 10:39 | Link to Comment New_Meat
New_Meat's picture

Sorta' the "Babylonian Architect" standard.  If the house falls down ...

Wed, 04/24/2013 - 10:45 | Link to Comment maskone909
maskone909's picture

Aye

The cap'n goes down with the ship

Wed, 04/24/2013 - 10:36 | Link to Comment Tinky
Tinky's picture

Chuck to the H to the S to the Eeeeconomeee, sweet like candy...

(partially appropriated from a Heavy D rap)

Wed, 04/24/2013 - 10:37 | Link to Comment New_Meat
New_Meat's picture
Why Krugman and the Keynesians Are Lackeys?

So they can be highly admired on the upper West Side?

Wed, 04/24/2013 - 10:37 | Link to Comment Sudden Debt
Sudden Debt's picture

KRUGGY WANTS A COOKIE!! KRUGGY WANTS A COOKIE!!

Wed, 04/24/2013 - 10:40 | Link to Comment Temporalist
Temporalist's picture

I for one welcome our bearded asexual PhDouche masters.  They are shmart so they must have our best interests at heart.  If I have to be whipped I'm grateful it is with a diploma from Princeton or Hahvahd (and the thought it may imbue some sense into my decrepit carcass).  Whip harder I'm not quite smart enough yet!

Wed, 04/24/2013 - 10:43 | Link to Comment wisefool
wisefool's picture

One of the great joys in my life is watching Krugman cower in fear of pundits on the MSM who are going out of their way to sincerely make him feel comfortable, so he can fully deliver his PhD level ideas in a conversation format. Instead of leaving him pigeonholed as a non-partisan writer of campaign slogans. (which is his actual day job)

EDIT: To clarify, this is not shadenfruden. I legitmately appreaciate the ammount of effort, empathy and talent people exert for his benefit.

Wed, 04/24/2013 - 10:38 | Link to Comment AnAnonymous
AnAnonymous's picture

But spending borrowed money on unproductive consumption
______________
yeah, unproductive production... Lets overcome the environment.

Keynesians are nothing new. They are children of 'americanism'

'Americans' were the first to dismiss the environment, claiming they could overcome it.

A mere rationalization of their theft spree.

'Americans' came with the idea of consuming more and more to enable even more consumption.

Before 'americans', people were sitting on their resources.

Of course, that 'american' propagandist cant admit that, it must be something else or he has nothing to write about and propagate.

'Americanism' at work.

Wed, 04/24/2013 - 10:39 | Link to Comment natronic
natronic's picture

The Keynesians think government can do it all, think everything is static, and would probably like to just completely rule our lives because they think they can do better.

Wed, 04/24/2013 - 10:40 | Link to Comment Dr. Engali
Dr. Engali's picture

I don't believe for a minute that Krugman believes all the horse shit he is selling. He is a well paid  salesman for the status quo and that's it. I wouldn't be surprised if he hasn't been stacking all his working life for the inevitable collapse.

Wed, 04/24/2013 - 10:41 | Link to Comment AnAnonymous
AnAnonymous's picture

Krugman is an 'american'.

Wed, 04/24/2013 - 10:44 | Link to Comment Dr. Engali
Dr. Engali's picture

Yawn...oh excuse me. Did you say something? I'm sorry I wasn't paying attention since you never say anything new.

Wed, 04/24/2013 - 10:47 | Link to Comment AnAnonymous
AnAnonymous's picture

Facts never grow old.

They do not need to renew. Contrary to propaganda and fantasy that lose their lustre after some time.

And 'americans' know a lot about the loss of lustre of their propaganda and fantasy. But they fail at renewing it.

Well, another failure in self perception, one can guess.

'americans' love to perceive themselves so innovative...

Wed, 04/24/2013 - 12:34 | Link to Comment Meat Hammer
Meat Hammer's picture

Facts are only as good as the retard misinterpreting them.  Can you guess of whom I speak?

Wed, 04/24/2013 - 12:53 | Link to Comment akak
akak's picture

Stale propaganda bits never grow old.

They do not need to renew. Contrary to fantasy of Chinese citizenism that lose their lustre after some brief time.

And Chinese Citizenism citizens know a lot about the loss of lustre of their propaganda and fantasy. But they fail at renewing it.

Well, another failure in self perception, one can guess.

Chinese Citizenism trolls love to perceive themselves so innovative...

Consider it a failure to self-indict.

Little Red Bookism falls down again.

Wed, 04/24/2013 - 11:36 | Link to Comment Pareto
Pareto's picture

Or intelligent.

Wed, 04/24/2013 - 14:22 | Link to Comment Clark Bent
Clark Bent's picture

What the hell is it that AnAnonymous does say? I gather he has something against Americans. 

Wed, 04/24/2013 - 10:44 | Link to Comment Winston Churchill
Winston Churchill's picture

He ,and Zimbabwe Ben both.

Nobody is that stupid unless they are getting paid to be that way.

Wed, 04/24/2013 - 10:50 | Link to Comment HardAssets
HardAssets's picture

Having never met or talked to Krugman, I have no idea what he really thinks. I have met many 'A student' academic types who were Very Good at learning . . . what is wrong.  (Many physicians also fit into that category).  They will blind themselves to reality right before their eyes if it contradicts their almost religiious belief in past indoctriination.

In any case, I don't read Krugman because he is either a dope or a criminal propagandist.

Wed, 04/24/2013 - 11:54 | Link to Comment NotApplicable
NotApplicable's picture

I got tired of arguing with idiot doctors over ten years ago. Specialization, it seems, leads to all sorts of levels of incoherency.

Also, they (people with degrees) tend to fall victim to false authority syndrome, believing that all the other highly educated specialists are also masters of their own domain, rather than idiotic sophists who've only mastered rhetoric. As for Krugstain (right-click, Add to Dictionary), what he thinks is much less important than what he believes.

Wed, 04/24/2013 - 10:45 | Link to Comment Bob
Bob's picture

Nice, Charles!  You nailed modern Keynesians beautifully. 

What dissappoints me is that so many people fail to acknowledge that much of the talk about "economics" is just cover for the great heist you point to as neofeudalism inherent in financialization. 

In a world where policies are made that greatly govern the real enocomy, however, the Austrian neoliberals have been at least as influenctial in cultivating this debtocracy in the name of a glorious neoliberalism (which people like Krugman aslo provide cover for as a bumbling foil.) 

Wish the Keynesians were our only problem.  The neoliberal cure will take most of us to the same place, imo. 

Wed, 04/24/2013 - 10:45 | Link to Comment AnAnonymous
AnAnonymous's picture

'Americanism' leads to an 'american' place and both Austrians and Keynesians are 'americans'...

Just as the dems and the reps are 'americans' etc

Welcome to an 'american' world...

Wed, 04/24/2013 - 15:56 | Link to Comment marathonman
marathonman's picture

Get a life already. Good grief!

Wed, 04/24/2013 - 10:54 | Link to Comment HardAssets
HardAssets's picture

"the Austrian neoliberals have been at least as influenctial in cultivating this debtocracy in the name of a glorious neoliberalism"

WTF are you talking about ?  Not another believer in 'people's money' ala Brown, Still, etc ?

They never seem to come up with who 'the people' who will run such schemes will be - like in the USSR, they usually turn out to be connected insiders and 'the people' get the shaft.

Wed, 04/24/2013 - 10:44 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

Keynes was a homosexual paedo, and his economics is thus the economics of homosexual paedos. Any surprise that every Western city is mimicing Gomorrah.

Wed, 04/24/2013 - 10:44 | Link to Comment AnAnonymous
AnAnonymous's picture

Debt is a full feature of 'americanism'

From the beginning, 'americans' envisioned to fund their empire of liberty pushing debt.

Way, way before Keynes was born.

Wed, 04/24/2013 - 10:58 | Link to Comment Confused
Confused's picture

Hahahahahahahahahahahahahahahahahahahaha

 

In the "beginning" there were no "Americans." They were more homogenious.  

 

But I guess it depends on your definition of "beginning."

Wed, 04/24/2013 - 11:02 | Link to Comment HardAssets
HardAssets's picture

The role of banker debt control in America was fought over since the beginning, with that tool Hamilton. It was held off until 1913.

Your country, China, was the inventor of paper fiat money - - - long before the USA existed as a nation.

Your nation has no English tradition of indiividual rights at all, so as today, it was always about the use of brute force on your own people.  But China's billions have been enough to plunder, so the leadership hasnt been imperalistic beyond its borders to much of a degree.

Wed, 04/24/2013 - 10:44 | Link to Comment maskone909
maskone909's picture

Krugman=bankrupt coke head fail

Wed, 04/24/2013 - 10:44 | Link to Comment adr
adr's picture

I've always wondered what the problem is with stability. Stability is the arch nemesis of Keynesianism.

Keynesians aren't just for consuption, but a never ending increase in consumption. When you say there are limits on consumption, they say bullshit WE CAN CREATE MORE!!!

Is there something wrong with a company that doesn't grow or shrink? If the company provides a high wage for 100 people and continues to bring in the same revenue every year, what is wrong with that?

You have stability. However in a Keynesian world this stability must be destroyed through inflation, input costs rise and the old revenue is no longer sufficient. Debt must be incurred in order to maintain previous levels.

I guess the main problem is the financial parasites can't profit off stability. So stability must be eliminated at any cost.

Wed, 04/24/2013 - 10:50 | Link to Comment AnAnonymous
AnAnonymous's picture

Keynesians aren't just for consuption, but a never ending increase in consumption. When you say there are limits on consumption, they say bullshit WE CAN CREATE MORE!!!
____________________

Keynesians only?

No, 'americans'

'Americans' have been for an ever increasing in consumption.

'Americans' knew how to overcome the environment. That is why other people had to hand out their land to 'americans' because other people did not know how to perform that.

'Americans' are a superior breed.
They can produce more than they consume.

Keynesians are just a subset of 'americans'.

Nothing new here. Just the plain expression of 'americanism'.

Wed, 04/24/2013 - 12:50 | Link to Comment akak
akak's picture

That was very much something.

I feel depleted now.

Wed, 04/24/2013 - 16:56 | Link to Comment screw face
screw face's picture

yup

+1

Prepare thy flotation devices and 3D printers.

Wed, 04/24/2013 - 11:43 | Link to Comment Bastiat
Bastiat's picture

Stability is death for a fractional reserve debt-money driven economy.  A great irony is that many "liberals" who conisider themselves environmental conscious and anti-war love Krugman and the debt driven compounding, predatory consumption machine that our economy has become.

Wed, 04/24/2013 - 10:50 | Link to Comment Dapper Dan
Dapper Dan's picture

Thank you Charles, your quote is my new bumper sticker,

Toadies, lackeys and apologists are always well-paid to support the party line.

 

Wed, 04/24/2013 - 11:03 | Link to Comment ugmug
ugmug's picture

Keynesian economics would consider locusts to be beneficial simply because their consumption of crops allows the opportunity for the farmer to grow even more crops. The sad reality is that the growing season determines when the additional planting takes place. 

Consumption is actually a controlled destruction of produced goods to necessitate a future demand. If our government, through excessive taxation, hurls us into a minimalist existence then producing less goods that sustain this new meager lifestyle will halt any future demand for produced goods.

Wed, 04/24/2013 - 11:03 | Link to Comment Zen Bernanke
Zen Bernanke's picture

apparently tptb have all bought into the keynsian philosophy simply becuase it's the easiest available, the most feel good, and can provide the most near term political brownie points.   the hayek model would leave everyone accountable for themselves and forced to live within their means, and therefore not politically expedient so it is cast aside.    

Wed, 04/24/2013 - 11:06 | Link to Comment Shizzmoney
Shizzmoney's picture

Someone needs to explain to the people there is a difference between NEO-Keynesianism....and Keynesian......policies.

Keynes gets a bad rap today because the "demand" created by these "academics" is based on "fraud".......the "supply" is also based on fraud - which is also exported.

The whole Austrian v Keynes school of economics is really a vat of fail filled with bullshit, lies, and propaganda.  The fact the the majority of you aloof assholes fall for it really goes to show the populace as a whole is a lot of dumb morons who revel in the "Us v Them" paradigm while those at the top, the "elites" (who really aren't elite or smart at all - see the Jew economists at Harvard who fucked up a god damned spreadsheet), cash off of the system.

Austrian v Keynes school of economics is a rich man's "Left vs Right".  It's an insult to all critical thinkers.

Wed, 04/24/2013 - 11:35 | Link to Comment Pareto
Pareto's picture

Whole lotta wtf are you talking about right there.

Wed, 04/24/2013 - 11:42 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

Critical thinkers are idiots who think that their titwanking matters.

Wed, 04/24/2013 - 11:07 | Link to Comment Smuckers
Smuckers's picture

My work is finite, my health is finite, my money is finite.
Do not create a fucking system that depends on consumption contrary to those facts.

 

 

For fuck sakes.

Wed, 04/24/2013 - 12:21 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Just how much more productivity and consumption do we need as individuals, as families, or as a society?  For what, for whom?  Quis Bono (Who Benefits)?  

Is this alleged 'productivity' to provide us with more food, better food, a better house, better schools & teachers, better hospitals and doctors, more or better things that we may or may not truly need?  Or is it to fuel the cancerous and rapacious FRB (Fractional Reserve Banking) system that we have allowed to metastasize in our national bodies?

"I shall give you the whole world, if you will but kneel down and worship me."  - Satan, tempting Jesus

 

Wed, 04/24/2013 - 11:10 | Link to Comment Hedgetard55
Hedgetard55's picture

Krugturd is well paid to be a propagandist. Whether he actually believes the crap he writes is immaterial.

Wed, 04/24/2013 - 12:37 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Krugman's so-called "Nobel Prize" is a misnomer that keeps being repeated until enough ppl believe it to be true.

The FACT (that anyone can verify) is that his 'award' has been (a) Issued by the Swedish central bank (Svergies Rijksbank), and not by Alfred Nobel, and (b) It is bestowed by the Nobel Committee.  This is a subtle but important difference that is continously white-washed by the Big-Money MSM.

C'mon Krugmeister, I dare you --  I tripple dare you -- to stand up and successfully refute this!  I'll pay you a Monster Box of 31 Pieces of Silver!

The truth... "it burns!" - Gollum

Wed, 04/24/2013 - 11:16 | Link to Comment falak pema
falak pema's picture

Just for the sake of debate the status quo MSM meme blows its horn here : 

It's Official: Paul Krugman Is Right - Business Insider

That sounds soo definitive, like cast in stone.

Wed, 04/24/2013 - 11:55 | Link to Comment ebworthen
ebworthen's picture

Written by Henry Blodget - who is one of those toadies for Keynesian stupidity who knows he's lying but it pays to lie.

Wed, 04/24/2013 - 12:01 | Link to Comment falak pema
falak pema's picture

yes, but relayed by everyone 'cos of this RR glitch; aka Colbert et al.  

Don't forget that nobody wants the ship to go down; so that's a very powerful confirmation bias stimulant nation wide. 

That's what I'm getting at...people don't want to look the other way than the comfy way, even the smart guys with ties. 

Wed, 04/24/2013 - 11:21 | Link to Comment Bastiat
Bastiat's picture

Meanwhile, this morning's price for undeliverable gold is $1,425.

Wed, 04/24/2013 - 11:32 | Link to Comment Pareto
Pareto's picture

Wait for it brother.

Wed, 04/24/2013 - 11:29 | Link to Comment FunkyOldGeezer
FunkyOldGeezer's picture

It's pretty simple. GREED has got us to the place we're in right now. Mostly corporate greed fuelled by greedy governments, fuelled by greedy electorates.

Wed, 04/24/2013 - 11:40 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

A deep analysis.

Wed, 04/24/2013 - 11:45 | Link to Comment B2u
B2u's picture

How can I get some of those benefits given to the Boston bombers?  Maybe I can change my name to Osama Al Gimme?

Wed, 04/24/2013 - 11:57 | Link to Comment ebworthen
ebworthen's picture

Thank you, thank you, thank you.

Some asshole from Wells Fargo advisors (Scott somebody) on CNBC this morning blabbing out the "Now is the time for people to get into equities" crock of schtick.  These harpies have no shame.

Simon Hobbes excited that European markets are up - because things are so bad - that the ECB may cut rates and increase debt.

"Krugman and his fellow cultists' single-minded parroting of 'aggregate demand' makes them well-paid lackeys and toadies for an extractive neofeudal-neocolonial debtocracy."

Exactly!  Though I am pretty sure the bearded potato believes his own starchy lies.

Wed, 04/24/2013 - 11:55 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Chuck, good article but... How long have I been saying that it is not about Socialism or just crony Capitalism.  It is 100% about NEO-FEUDALISM: 

FEUDALISM 2.0

The world's power and money elite are colluding to create a NWO per their vision of the world.

Simon Black loves to talk about Chile, and understandably so.  Chile seems to be well run and is doing quite well.  A truly beautiful country too.  But did you know that the country is essentially owned and run by 12 families?  How many own+run the US?  Germany, UK, Canada, Mexico?

Wed, 04/24/2013 - 11:59 | Link to Comment lolmao500
lolmao500's picture

Less than that.

Who runs the FED? One family. The Rothschild.

Wed, 04/24/2013 - 12:07 | Link to Comment MrBoompi
MrBoompi's picture

the Keynesian Cultists miss the key dynamics of sustainable growth and fail utterly and completely to acknowledge the corrupt and exploitive nature of our cartel-state crony-capitalism economy.

---------

Maybe so, but IMO many recognize there must be constant money-creation or the system will collapse, and it's not fair to give all the money created out of thin air only to the financial powers that be, for their exclusive use and benefit.  Some of it should be used for employment, some wage inflation, entitlement programs, or things which benefit the masses as opposed to the .1%.  Krugman and Bernanke are alike in many respects, but Krugman believes these Keynesian policies should help regular people too.  It's hard to argue Bernanke does.

Wed, 04/24/2013 - 12:08 | Link to Comment Againstthelie
Againstthelie's picture

A wonderful article. Thanks.

Wed, 04/24/2013 - 12:12 | Link to Comment silverserfer
silverserfer's picture

it appears tyler has squashed that krugman troll as he hasnt reared his bearded sphincter avatar looking thing in a while.

Wed, 04/24/2013 - 12:39 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

"If you set out to design a system that would implode with devastating consequences, it would be the Keynesian Cargo Cult's neofeudal financialization debtocracy."

If you set out to design a system that would provide systemic leeches with unjustifiable, gargantuan sums of taxpayer money before imploding, it would be the Keynesian Cargo Cult's neofeudal financialization debtocracy.

Wed, 04/24/2013 - 12:51 | Link to Comment lovejoy
lovejoy's picture

Charles - love your stuff. You are a true thinker. However, aggregate demand is the key to an improved standard of living. If an output gap exists, the economy stagnates and more and more people can't find work. For every person who wants a job and can't get a job, those lost hours of productivity are lost forever. What a waste, those hours can never be recovered and neither can the incomes. The 1% continue to get wealthier and the 99% poorer.

Jobs are essentially for not only the economy, but society in general. So the goal is try and figure out how to create jobs. The issue is to focus on is not aggregate demand but the crony capitalism that takes advantage of efforts to improve aggregate demand and the perpetuation of what Bill Black calls a "Controlled Fraud". Try and not focus not so much on the underlying theories but the fraud conducted in their implementation. Just follow the money. Instead of building that bridge to nowhere for the benefit of a Congressional district and contractor, build that needed bridge to somewhere that benefits all. Infrastructure in this country is rapidly falling apart and there are millions of bridges needed to go somewhere - physical as well as digital.

Wed, 04/24/2013 - 13:23 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

Minor point, but it's called "Control Fraud" meaning fraud from the highest levels of an organization or top-down fraud, when those in control promote fraud.

Wed, 04/24/2013 - 14:36 | Link to Comment Clark Bent
Clark Bent's picture

Or how about we just respect private property and the rule of law and let individuals have the power to create their own productivity? How about we quit trying to control everything according to pet theories and pet agendas? Fuck infrastructure. Do you think people can't figure out how to get their goods across a river? The best thing we could do imho is put out to pasture seven tenths of government management, state, local and federal.   

Wed, 04/24/2013 - 13:37 | Link to Comment Rick Blaine
Rick Blaine's picture

Paul Krugman is the devil!

Wed, 04/24/2013 - 13:54 | Link to Comment Atticus Finch
Atticus Finch's picture

Production is balanced by consumption. If there is no consumption of the product, producing the product ends in bankruptcy. Production is not some holy grail existing as the isolated, singular noble entity. There must be the other side of the scale. These arguments like so many mix apples and oranges.

One of the issues is use value. A bridge to nowhere meets the production side of the equation but not the consumption side of the formula because no one will use a bridge to nowhere.It is not consumed.

The problem with the article is the mix of problems afflicting our society. Congressmen building bridges to nowhere is Government spending, but it is misallocation of Government funds, not consumption. Keynes gets an unbalanced wrap. Production and Consumption are its own discussion.

The argument mix does not separate Keynesianism from the hijacking of the Constitutional Republic by a Plutocracy and Oligopoly in service to an Oligarchy, which is the principal problem.

The Productivity = Consumption discussion needs to be separated from the current activity, which is the loss of the Republic.

Wed, 04/24/2013 - 14:35 | Link to Comment Itinerant
Itinerant's picture

I don't disagree, but you leave two very important problems mostly unaddressed:

  1. How to distinguish between productive and unproductive "investment"? Any productive investment is also consumption, using up building materials, labour, etc. It is very difficult as a rule to distinguish (statistically) between consumption for productive and for unproductive consumption: both must expend resources that are already there. It is similarly difficult to distinguish between asset value (which is determined by demand for some good) and bidding up the price of assets (which is determined by how willing people are to lend against asset value as collateral).
  2. How to keep all productivity gains from travelling to the top of the socio-economic pyramid. All of us enjoy the benefits of legacy capital (know-how, machines, plant, nature, minerals, etc) that we have inherited from the toil of generations long past, but the dividends are vey unequally distributed. Because of improvements, it requires less and less people to produce the same amount of stuff, but the extra productivity tends to benefit the ownership class while reducing the participation of the employee class. Except that long-term that reduces aggregate demand since marginalized workers have no money. As a though experiment (reductio ad absurdem), imagine there is one guy who owns all the assets and can manufacture everything the whole population requires through automation, requiring no workers. How much would be produced?
Wed, 04/24/2013 - 15:13 | Link to Comment dadichris
dadichris's picture

Value, surplus and wealth can only be created by increasing productivity.

This statement implies that a different KIND of central planning is the correct monetary policy to pursue.

I think your argument should be that any form of central planning is bad and that an activist Fed is tantamount to central planning.

The problem started when the FOMC was added in 1933. The original Fed could not interfere with the markets. (If my history is correct)

 

 

Wed, 04/24/2013 - 17:07 | Link to Comment Jack Burton
Jack Burton's picture

"wealth can only increase as productivity increases"  This is true at heart but there are two problems with the way it works now.

#1 The productivity gains don't seem to go to workers

#2 Right now wealth increases come in bubble form, the present stock market for example, feed by money printing.

This cycle needs to be broken, productivity gains need to be shared out amoung the workers and not just the owners

The bubble blowing with printed money must stop.

Wed, 04/24/2013 - 17:49 | Link to Comment Watcher1
Watcher1's picture

Would rather name it as "Debtocrature" ...!

Wed, 04/24/2013 - 19:29 | Link to Comment blindman
blindman's picture

have to say this guy, c.h.s., might be the one guy
nailing it time after time.
.
nailing it !
.
I hear he likes popular music (oldies)
where the truth hurts.
.
Cyndi Lauper - Time After Time
http://www.youtube.com/watch?v=VdQY7BusJNU
.
http://www.youtube.com/watch?v=2PqhOrgk11A
.
"the second hand unwinds." c.l. (Cyndi Lauper)

Do NOT follow this link or you will be banned from the site!