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"The Bucks Stop Here": Why Keynesian Economics Will Get Blamed For The Crash
Submitted by Gary North via GaryNorth.com,
For as long as the present economic system lumbers along, Keynesians will control the levers of power and influence. But when at last the system goes down in a heap, and central banks cannot restore the system, there will be a quest for answers.
Keynesians have the long-run disadvantage of being in control of the tax-funded educational system. They are in charge of the major economic institution of our day, the Federal Reserve System. They will get blamed. When people's retirement plans are smashed, they are going to look for somebody to blame. That means Keynesians. The Keynesians will not be able to transfer this responsibility to somebody else. When you are in charge, the buck stops on your desk. In the case of Federal Reserve policy, it's not just the buck that stops on your desk. It's trillions of bucks.
Academic economists never want to take responsibility for the outcome of their recommended policies. They always try to blame somebody else for not having implemented what the recommended. But when you come to the 14 people who are on the Federal Open Market Committee, which sets policy for the Federal Reserve, there is no place to hide. The FOMC almost always is unanimous in its policy recommendations. There may be one dissenter, but that's about it. So, there really is no place to hide. When the Federal Reserve finally is not in a position to restore economic growth by means of inflating the currency, Keynesians are going to get blamed.
When you live by the Federal Reserve, you die by the Federal Reserve.
HOW KEYNESIANS CONQUERED
I first began reading economics in 1958. Like so many of my contemporaries who began to study free market economics in that era, I was introduced to economics by The Freeman. The editor was a good writer, and he did not let bad writers' articles into the magazine.
In 1960, I took my first course in college-level economics. The instructor seemed incompetent to me. In reviewing his economic textbook 55 years later, I am still convinced that he was indeed incompetent. He was never famous. He never got tenure. He disappeared into academic oblivion. He was a Keynesian.
I understood from my time in that class that academic economics is not based on any kind of logic that the average person can follow. This is one of the advantages that free market economists have. John Maynard Keynes could write cogent prose, but The General Theory (1936) is incoherent. Yet it gained an army of academic followers. It is the classic case of the emperor who had no clothes.
How did Keynes get his followers? Because he defended what the academic world wanted in 1936. It defended government intervention. Governments had been intervening for five years by the time the book was published. There was no academic defense of this intervention. Younger economists had become disillusioned with free market economics, because free market economists, with the exception of the Austrians, could not explain why the depression in 1936 was as bad as it was in 1931.
In other words, there was a loss of faith among younger economist regarding the academic establishment of 1936. The older academic economists in 1936 could not avoid this responsibility. The buck stopped there. They never recovered. By 1946, the year of Keynes's death, among younger economists, Keynesianism was becoming dominant. With the publication of Samuelson's textbook in 1948, it became dominant. By 1950, Keynesians dominated the economics profession, and the old-timers who may not have agreed were unable to follow the logic of Keynesianism. They were unable to do the mathematics that Samuelson was able to do. They looked like old fogies. They in fact were old fogies. They were not Austrian fogies. They could not defend their position.
Today, the Keynesians are in the position of the non-Austrian economists in 1930. Things look shaky, but not out of control. The Federal Reserve seems to be beyond criticism. Central banking runs the world, but the world is obviously in trouble.
ACADEMIC SCREENING
Keynesians are not good writers. When it gets down to explaining economic cause-and-effect to the average person, the Keynesians helpless. The average person cannot follow Keynesian logic. There is a reason for this: there is no logic to it. The General Theory is illogical.
Most critics inside the academic establishment had been fearful of saying this directly. They may refer to the dense text of the book, but they do not come out and say that the book was completely illogical. That would mean that their colleagues are holding to a system that is, at bottom, illogical. This would be true, but would keep you from getting tenure.
Outside of the Keynesian academic establishment, there have been a few people who have said that Keynes's book is incoherent, and there is no logic to his system. The best example is Henry Hazlitt, but he only said it in 1959, and almost nobody read the book: The Failure of the "New Economics." The book is never footnoted by scholars. It is a fine book, but it was not written for an academic audience. It was not written in academic jargon. This is why it had zero influence in academia. It never had enough book sales within the conservative movement to gain a reputation.
By 1959, Keynesianism was dominant in academia. In fact, it had been dominant for at least a decade. Hazlitt was truly John the Baptist, crying in the wilderness. So, in the year of my high school graduation, there was virtually nothing available that anyone had heard of to refute Keynesian orthodoxy. It was like some freshman college student trying to find out what was wrong with Freud. Orthodoxy was entrenched in academia.
Nevertheless, the Keynesians' dominance in academia does not make the system coherent. It only enables members of the academic establishment to lord it over outsiders and amateurs who did not pass the screening process that academia imposes on candidates for the classroom.
The Keynesians have always made a point never to mention Austrian economics. This was true in the late 1940's. It was true in my days in the 1960's. It is also true today. Keynesians do not introduce students to the most consistently anti-Keynesian materials. In the classroom, students might get a cursory reference to Marx, but nobody ever makes students study Marx's theory of surplus value, and certainly nobody is ever asked to read Baohm-Bawerk's refutation. In the early 1960's, almost nobody in the classroom ever mentioned Milton Friedman. Today, I suspect that Friedman and the monetarists do get some attention, but the Keynesians control the departments, and therefore they control the selection of the textbook for the undergraduate course in economics.
They control the certification process. Monetarists can get through, as long as their mathematics is good enough. Keynesians use mathematics to screen candidates for the M.A.. Mathematics inherently is not applicable to economic theory, for the assumption that makes math applicable is market equilibrium: human omniscience. Only the Austrians maintain that mathematics is inherently inconsistent with economics. They defend this as an issue of epistemology, but no other school of opinion believes this.
This is why there was no way to get from The Freeman in 1958 to a Ph.D. There still isn't. The academic guild screens out most people who believe in the unhampered free market. But in doing this, they also screen out people who can communicate well. This is the Achilles heel of academic economics today.
SALVATION BY JARGON
The students who get through the screening process have been forced to go through Keynesian economics and high-level mathematical training, neither of which leads to anything resembling the ability to communicate in English to an audience outside the academic guild.
In other words, these people talk only to each other. Most professors in every field are tempted to enter into the world of jargon. They get tenure in a research university only by being able to communicate in this jargon. They have to get articles published in journals that are edited by specialists in the guild's jargon. At no stage of the academic process above the master's degree is there any attempt to communicate the truth of the guild to the public. Actually, there is almost no training in communications at all, at any level, but certainly above the freshman level. The materials introduced thereafter are designed to screen out people who can communicate to the general public.
From the point of view of communicating to the general public, Keynesianism is at a distinct disadvantage. Keynesians espouse slogans. They tell us their goals. They insist that the government is capable of achieving these goals. But, as we look around ourselves, we see signs that the government is faltering.
Back in the early 1970's, I met a very bright young man who was about 19 years old. He had become enamored with the free market by reading The Freeman. I was then on the staff of the Foundation for Economic Education, which published The Freeman.
He told me that he had gone through an intellectual crisis. He had begun to doubt Austrian economics. He was told in college about the Keynesian system. So, he decided he would test the two theories of economics. He sat down to read Hayek's Road to Serfdom. Then he read Keynes's General Theory. He said that this exercise had cured him of Keynesianism.
I think it would cure anybody who can think straight. Anyone who sits down to read Rothbard's Man, Economy, and State, and then reads the latest addition of Samuelson's economics textbook, is likely to come to the conclusion that he is not going to commit his life to defending Keynesianism.
When you cannot communicate the logic of your position to an intelligent decision maker, and the key institution that you have defended has failed to deliver the goods, you are in trouble. So is the ideology you defend.
The academic economists can get away with this, because funding is provided by taxpayers. Taxpayers have no say in any of this. The guild exists because of tax-funded education. This is true in every field. But in some fields, it is expected that you have the ability to communicate to the general public. The field of history is one of these. There are academic journals, and the journals are filled with narrowly focused articles. But historians are expected to be able to communicate the broad sweep of history to freshman students, which means that they have to be able to stand in front of a group and discuss historical cause-and-effect.
THE AUSTRIANS' ADVANTAGE
Today, unlike 1958, there is a huge body of supporting material, both academic and popular. This material is available free of charge on the website of the Mises Institute. This is why I am optimistic about the long run future of economic discussion. Austrians are trained to discuss. Keynesians are not.
The Austrian School has a tremendous advantage over Keynesians. In fact, it has an advantage over virtually all other schools of opinion. The Austrians can communicate in simple terminology the basic truths of their position. The graduate school level of communication is still accessible by people who read The Freeman, as long as they read carefully. The topics of the graduate school are probably not interesting to people who can read The Freeman, but if they ever do get interested, they have access to this body of material.
The Ludwig von Mises Institute is proving this on a regular basis. It has a lot of Internet traffic. It has more traffic by far than the website of the American Economics Association. The reason for this is obvious: the authors write in order to be understood. They want intelligent laymen to be able to follow their arguments.
There will come a time when it will pay to be able to communicate. In a time of economic crisis, which is surely coming, the economist who can communicate the logic of his position, and then persuade people to take action in terms of this position, is going to have an advantage over any economist who does not have this ability. It is a matter of both logic and rhetoric. The Keynesians are short on both.
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Keynesian economics will go down in history as the stupidest monetary policy ever.
I thought it was gonna be Bush's fault.
No, the Keynesians will blame everyone else......it will be "it would have worked if we just spent MOAR!!" They will blame everyone else for their own failings. Just like in education----ask a liberal "how much spending is enough" and they cannot give you an answer. Their answer is: its NEVER enough.
Will tptb ever go against their custom monetary system that allows unlimited spending? Remember they have armies to back their systems.
You say that like its a bad thing ("Keynesian economics will get the blame...").
"The Juwes are not the men that will be blamed for nothing"
When people's retirement plans are smashed, they are going to look for somebody to blame. That means Keynesians.
So retirement plans need to get smashed. That gives you a large group of status-quo preservers... as we already know.
Dubya and "Dick" deficits don't matter Cheney and by default all of team Red have absolutley no accountability, it is obviously "all cuz Obama" why I mis-remember the facts about the housing bubble and financial meltdown it all happened under the Obama administration, I tell you what if the Republicans had control of the Senate and Congress and the the presidency, with control of the federal agencies like the SEC none of that would have happened, there would have been no need for this keynesian on steroids economic policy that Obama and the Democrats are responsible for...plus he started the war in Iraq not to mention all that nation building in Afghanistan liberal nonsense.. just keep repeating it.... all cuz Obama, all cuz Obama, all cuz Obama......
It's more an ethos than a policy...like kardashians ass
We have obviously evolved past the point of needing money or a monetary policy. Government decides the value and exchange rate of all goods (including human life) and services . Government decides who needs what and how much.
Problem solved...
No way Jose, its capitalism's fault. If only we had given all authority and money to the bankers we would all be green!
As they SHOULD be. Destroy this leviathan and criminalize its practice.
ANTISEMITISM!!!
IF the semites are in charge of the institutions and the institutions are being eggregiously mismanged isn't the anti-semitism logically warrranted due to the clositered mismanagement of the group in question?
Keynesian Econominics seems to be illogical and the belief in it is quite religous in tenor?
-Might this be because the semites espousing such and enforcing their views via peer selection/gate keeping at the acedemic, publication, and employment levels are exhibiting a normalcy bias with regard to their rightness not only in religous and ethic thought but also in uninamity of acedemic and economic dogmatisms?
-Certainly any group with a shared religous, ethical, acedemic, social, and economic position and territory is more likely to pursue insularity for the sake of the group whether it is done explicitly or overtly.
In all these years of forced diversity initiatives and minority hiring quotas, etc. I have never heard anyone posit that it might be best if some small aggresively self-protective nepotistic minority did not have undue representation within and/or control over important institutions such as publicly funded universites, major financial institutions -and Central Banks.
Yeah, right.
Most "Folks" are clueless.
President Camacho will tell them who was to blame and the guilty will be put in the arena of justice with a monster truck.
the monster truck must have a big rubber dildo, or its not a proper execution.
jus sayin
I dunno. I think history suggests that workers, savers, and people with gold and silver will be blamed for the crash.
Indeed.
Oligarchy capitalism beats an economic dick hired to cure his syphilis every time in terms of whodunnit in the first place !
Blame it on those who come AFTER the event.
Thats like saying rape is the fault of the sexy dame victim's doctor !
Hey he be the victim's head shrinker.
He may not be perfect but he can't be worse than the psychopath.
When it comes to crazy witch doctors Friedman beats Keynes hands down.
And we have none other than Stockton (Reaganomic's whiz kid) to support that thesis.
The blame is yours when they run out of your money
If there is a major "event," it can be blamed. And power (further) consolidated. Wait and see.
An economist is a philosopher who believes he's something more.
Which is why economics used to be called "political philosophy".
basically what the Keynesian economists are trying to do is be like Asimov's Psychohistorians in the Foundation series. They want to predict and manipulate human behavior to achieve what they see as the optimum. It's just that they're not fucking smart enough to do it .... but they think they are. pure hubris.
They can't stop. There will be something else to blame. Either they'll wait for it or make it happen.
Fully admitting I don't have any substantial econ/finance background [but I read every article here most days to try to figure out where to put some dough...]
- from reading krugman's articles' comments section, and politics aside..
Keynesianism, literally, strikes me as being much more religion than anything even approaching science.
At a basic level - economics, and keynesian analysis, exists in a wholly fabricated paradigm - but if you study neuroscience, say, while there's often fuzziness - there's nothing arbitrary or made up about it.
maybe its why so many comments sound like the ravings of a caffeine-addled, under-sexed Dungeon master
"Keynesianism, literally, strikes me as being much more religion than anything even approaching science."
That can mostly be said about the entire field of economics, it's not science. The oddest thing about keynesianism is that it's sort of a reflexive philosophy, not built out of its own merits, but in response to other theories. Basically it argues that it's better because if you didn't things would be worse, but that worse is unprovable.
The long and short of it is that deflation means the power structure is broken while inflation means those in power can trick the population into allowing them to remain. Deflation and default brings down governments. This is why those in power always side with inflationary policy in response to credit bubbles and downturns. If you look across history, it's always the response. Always.
Keynsianism is a fiat bankster smoke grenade.
I'm gonna steal that.
we stole from some folks ... ?
Religion isnt quite the right word. The interesting thing about keynesianism is that there is a proof for each and every independent aspect that is damn near impossible to refute. They isolate variables or manipulate and bend them to create a formula that must be true, if all assumptions are held true. The reason it is never empirically supported in the long run is simply because there is always a logical gap hidden somewhere in one of the assumptions. It reminds me of this mathematical fallacy:
Let a and b be equal non-zero quantities
a = b
Multiply by a
a^2 = ab
Subtract b^2
a^2 - b^2 = ab - b^2
Factor both sides; the left factors as a difference of squares, the right is factored through its greatest common divisor)
(a - b)(a + b) = b(a - b)
Divide out (a - b)
a + b = b
Observing that a = b
b + b = b
Combine like terms on the left
2b = b
Divide by the non-zero b
2 = 1
This line throws an error : Divide out (a - b)
Since a - b = 0, dividing by zero throws an exception.
So does this line, "The interesting thing about Keynesianism..."
It presumes erroneously that there is anything interesting about Keynesianism.
"There will come a time when it will pay to be able to communicate. In a time of economic crisis, which is surely coming, the economist who can communicate the logic of his position, and then persuade people to take action in terms of this position, is going to have an advantage over any economist who does not have this ability. "
I don't give a fuck which group of egotists win the Ivory Tower pissing match of the week.
We have real problems.
The fact that the educational, acedemic and research institutions -public and private- are doing fuck all to solve societal problems only proves them invalid as decent use for human endeavor and funding: pure waste and chest-thumping poppycocksucks the lot..
The blame with be placed on those that blocked MORE Keynesian spending.
The Krugman defence
Was in Austria last summer and was shocked that no one there had any idea who von Mises, Shumpeter, et al were. Never heard the names, even in Vienna.
I think the Austrian economic theory came out of the town of Austria, Ohio.
"Austria, huh? Throw another shrimp on the barbie!" - Lloyd Chrstmas
Never gets old.
In the long run we are all broke.
What long run?
We are broke now. Completely. It's just that the alcohol hasn't worn off yet.
the relationship between the Gov't and the Fed can best be likened to a person with acute problems who is ADDICTED TO PAINKILLERS. The Gov't now has a total dependency on the Fed, believing that they can rescue any crisis.
The Fed was supposed to safeguard the banking system.
From there, the mission expanded to be "control of monetary policy", and then with the broad implication that they were somehow protecting the health of the US economy. This is complete nonsense. Members of the Fed swallowed the hype about their own power - but it is illusory. However, your point is valid. Keynesian thinking infected the FOMCwith illusory dreams that they really could sway the outcome of these interventions.
Things got worse when Greenspan saw the potential power of derivtives and market "adjustments" (i.e. market manipulation).
Now the Govermnment thinks that the Fed can do anything, and bail them out of any kind of economic diasaster.
NOT POSSIBLE !!!!
The United States has an abundance of everything that is required to maintain a productive economy.
It is the horrendous mismanagement and misallocation of resources that are hobbling the system and impeding progress and plenty.
Watch the movie 'Moneyball'.
It is a film about a few people throwing dogma out the window and seeking to achieve better results with limited resources and disparaged actors to achive a higher level of real productivity and success.
The problem was shown not to be a lack of resources but a misallocation of resources and a disparagment/misuse of readily available human capital.
A similar exorcise in dogma revulsion and repudiation, and a vast reassesment and reallocation of resources and human capital, is required in the macro economy. The government and the institutions require reorganization: fresh leadership and revised allocations of resources and human capital.
The status quo is a perpetuation of failed dogmatic process that requires subversion, creative destruction, and reinvention in order to realize the inherent value that is being squandered and pilfered by the entrenched interests...
You are exactly right. I would summarize it this way: the inmates are running the asylum.
Simple isn't it... except for that one little thing--unstoppable government growth.
Your unstoppable belief in Austrian economics is nothing compared to U.S. govs desire to grow.
The machine does not care that it isn't a perpetual motion machine but it will keep running until it doesn't.
"The Keynesians will not be able to transfer this responsibility to somebody else...."
au contraire my all too trusting and historically niave friend
when TPTB backs are to the wall and the pitch forks are being sharpened, war fixes everything
expect the mother of all false flags to appear, and be blamed on: Russians, Chinese, Iranians, 2nd AD Patriots, or better yet,
a WMD of Russian design, built and supplied by Iranians sneaked aboard a Chinese ship to domestic extremist 2nd AD Tea Party Patriots who will be blamed along with those selfish gold bugs and hoarding preppers for the ensuing economic collapse. Then the shadow government can get to go to war with the whole world and ourselves at the same time while the sheeple beg to be RFID chipped and "bailed in" to the NWO if it means saving their pensions for even one more month.
Better yet... If a conservative is elected, once he implements Austrian policies... the Fed will just quickly raise interest rates. Since the Keynesians have driven debt to such sky high levels, that interest rate rise will collapse the system and voila! Austrians will get the blame for what the Keynesians have done.
If the Austrians are smart they'll look at the Keynsians, shrugg their shoulders and say, "You broke it, you fix it." "What, what was that, I'm sorry, what did you say? You can't fix it. Louder, I can't hear you. What was that. Come on man, speak up, louder. I'll tell you what, you write up your request on a piece of paper, sign it, make 200 copies, give them to me and then, if I like what you've written, I'll consider it. Oh, by the way, Paul Krugman has to kiss my ass."
Yeah, that is my concern. The folks that built the unstable and unsustainable present economic morass will scream its someone else's fault when a tiny fly lands on that precariously balanced monolith and topples the whole scam.
And the voting public, they will see through the duplicity of course, right? Naw, didn't think so either.
Either way, I've already sharpened the guillotine blade, and used a permanent marker to label each individual cartridge for those responsible. Custom loaded, only the finest Norma brass and Nosler Accubond. The veritable gourmet of cartridges. I also have some premium hemp rope for the distinguishing Keynesian.
I'm ready. Just bring me a big fat banker or a dozen.
Will Paul Krugman have to give back his Nobel?
"...there will be a quest for answers."
Actually first there will be catharsis: (Perhaps and hopefully, we have already begun that process. The sooner and shorter, the better. Especially for us U-6 folk.)
http://www.thedailybell.com/exclusive-interviews/3791/Anthony-Wile-Colon...
Then the quest can begin ..
First a crash course:
1) Problem: http://www.veteranstoday.com/2012/11/06/roadmap-to-redressing-economic-t... (the problem was actually trying to be addressed, but "things" kept getting in the way.)
2) Solution: http://wantarevelations.com/2014/01/wanta-plan-macro-financial-economic-... (This was ready to go in '93. Then something in Waco and then Vince Foster and Hillary's Children Defense Fund got in the way. Again, proposed and ready to be implemented in 2010. I remember getting layed off from a fracking gig that year.)
Well, maybe 3rd time's a charm?
http://eagleonetowanta.com/
Good article. Problem is, regular humans will accept anything human predators demand. This includes ever-worse tyranny as "the solution".
I guess I should say something here that I never see stated explicitly. Though somebody must have stated this before, because it is simply too fundamental and too obvious to any thinking human being.
Economics is utterly invalid as anything but an observational science... if we're gonna call economics a science at all, which is questionable.
In other words, ethics must come first... before economics. This must be the very first "law" of any valid economics. And any valid ethics REQUIRES individuals are free to take actions, produce goods, and trade those goods with others, without interference (including taxation).
Thus any so-called "economics" like Keynsianism is invalid before it begins. In fact, Keynsianism == rationalization for human predators.
Keynsianism is nothing more than rationalization for human predators to lie, cheat, steal and defraud millions or billions of honest, ethical, productive, benevolent human beings.
PERIOD.
BTW, congrats to the author for essentially saying just that.
" ethics must come first... before economics. This must be the very first "law" of any valid economics. And any valid ethics REQUIRES individuals are free to take actions, produce goods, and trade those goods with others, without interference (including taxation).
Thus any so-called "economics" like Keynsianism is invalid before it begins. In fact, Keynsianism == rationalization for human predators.
Keynsianism is nothing more than rationalization for human predators to lie, cheat, steal and defraud millions or billions of honest, ethical, productive, benevolent human beings.
PERIOD. "
Well stated..
Excellent article and equally excellent comment. There is a strong predilection in times of crises for people to look to the strong man to save them. Most people know as much about economics and boom-bust cycles as brain surgery. The right answer in economic crisis is generally to do nothing and let the system rebalance. If anything, government needs to retract its economic claws. This is counterintuitive as most people will look to more, not less intervention. This facilitates the elites who are relatively free to make up any story to both explain the economic failure and rationalize yet a new intervention. Keynes gives them the basic academic sounding platform to intervene and in the end that is the only important aspect of the theory.
There is no government in the world, not even the "free"countries of the West that will ever agree to nonintervention even if it is the right answer. Nonintervention is an admission of their fallibility and does not play well poltically.
"Keynesians are not good writers. When it gets down to explaining economic cause-and-effect to the average person, the Keynesians helpless. The average person cannot follow Keynesian logic. There is a reason for this: there is no logic to it. The General Theory is illogical."
The logic--and the reason Keynesians are, "winning" is because they are government patsy's just like "free market" economists are.
To understand economics, or anyfuckinthing else the government does--you have to think like a government(that wants to grow on a straight line) thinks. For example, something that may seem logical to a sound money, free market person may not be logical in the least bit to a government that is hell bent on growth at any cost.
The fact of the matter is that the meme generators on K Street and Wall Street are doing a wondeful job of capturing the hearts and the minds of the average person.
The concept of, "free markets" is a big winner on immigration policy and keeping downward pressure on blue collar wages. The government and Wall St. has been extremely worried about wage inflation since about 1973... yeah...they are illogical.
There hasn't been anything resembling a free market since 1913.
preaching to the choir?
Keynesians appear to have conquered other economic philosphies because at the core of the Keynesian philosophy lies the ability, nay, the requirement, for government to intervene in the creation of money and the control of prices. Politicians and financeers love the concept. Cheap money, sometimes even free.
For centuries, it was understood that Laissez Faire was the right way to allow an economy to grow and prosper. Save and produce was the path to prosperity, not borrow and spend. But, post the Great Depression, Keynes gave the world governments an excuse to allow the elite to force subservience onto the masses via "hands on" monetary manipulation. But the Keynesions, predictably, got greedy and the manipulations have become unbearable for the masses. Eventually, they will no longer eat cake.
So...
Why Keynesian Economics Will Get Blamed For The Crash?... because it is responsible. And even the most ignorant among us is beginning to realize that fact.
what is really funny/interesting is the fact that there are two or three generations of american public who believe the current econ thinking is the ONLY econ theory/practice out there. to see them squint and cock their heads to the side when they are told all they believed to be "true" and "real", was actually incorrect. knowledge is ephemeral and illusory. read socrates' The Cave. hundreds of years people thought the earth was flat. today were told investors are 'rational', that markets are effecient and always at equilibrium. anyone besides an econ prof or the pupil looking to get a grade, would say none of that is correct in reality.
Plato wrote The Cave.
Right. Socrates only lived in it.
As well they should be blamed. But they're not the only culprits,
https://biblicisminstitute.wordpress.com/2015/06/25/warmongering-vs-econ...
It's funny virtually the same people who are in favor of Keynes would also say that they are worried about global warming, pollution, future generations ability to get a good education. What they really don't get however is that the constant growth that keynesianism requires causes global warming (if it exists) pollution etc etc.
Keynes was an idiot but the funny thing is governments today are not keynsian they are just money printers in good times and bad.
Yeah.. it's funny that governments grow in good times and bad.
Really?
That is funny to you?
Pull up a chart of government growth for the past 50 years and extrapolate it to its logical conclusion.
btw, same shit can be said about free market people. Coincidence?
If you have a free market in the absence of a centralized government it will not last long without a war where a centralized government and debauched currency system is established.
Did you read my comment? I obviously didn't mean funny haha.
In the meantime my net worth is up $4 million since 2009, so I'm happy. Glad I didn't take all the gloom and doom articles seriously.
Future read...
Most of this country can't even spell "Keynesianism". They'll blame rampant capitalism, the free market, Republican obstructionism, not taxing the rich enough, deregulation... Just like they always do.
Sad but true...
We are a country of stupid, gubmint "educated," peoples.
Tertiary education provides functionaries for industry, Gary. Thinkers, and writers, must fight to be heard. The functionaries don't care to think, or write, because they plod along without insight as though they are in a trance state. Thinkers, and writers, cannot afford to live life in a trance state because the taxpayers are not inclined to fund them through the State.
The good news is, the government's "monetary policy" won't matter after a Keynesian apocalypse, because no one will think of government paper as money anymore. If anyone is blamed, it will be "Obama voters" -- blacks, Latinos, and Jews. Exactly zero percent of whites will remember voting for Obama.
When introduced to Keynesian gubbermint deficit spending in high school, it was immediately apparent to me that this "theory" was absurd bull$#!+.
Decades later, as a CPA giving expert witless testimony in big $ civil cases in court, I always humiliated the hapless PhD economists hired by opposing counsel, especially in jury trials. It seemed like even the dumbed-down jurors reacted to the economists the same way I did in high school.
There are many schools of economics because each school is right some of the time, nearly right some of the time and wrong the rest of the time.
When a group of economists start accurately predicting what will happen in the future their school of economics will supplant all others.
The hot air from each school is no substitute for consistent accurate predictions.
The Austrian school appears to be a bunch of Austian aristocrats that have developed theories that work in their own self-interest.
I want to keep my inherited wealth and be able to use it freely to invest and take the benefits of the hard work carried out by others.
Austrian economics is the preferred School of the 1%.
They believe that Monarchy is preferable to Democracy: https://mises.org/library/democracy-god-failed-hans-hermann-hoppe?contro...
They defined "neoliberalism": https://en.wikipedia.org/wiki/Neoliberalism#Early_history
The headline article is quite absurd. Keynesianism died in the late 1970's to be replaced by Monetarism and Free-Market Fundamentalism. I really don't know what the hell the author is on about: Milton Friedman reigned supreme for years and, to this day, the entire market hangs on the words of the FOMC.
The essence of Keynes is simple and sensible, has nothing to do with the FOMC, and can be summed up in one word: buffering. Siphen off surplus during a boom and sock it away, to be drawn upon during a bust. If reserves are exhausted, then it may be necessary to run up debt until the crisis passes then pay it off and get back to surplus during the next boom. Monetarism butchers the basic concept.
When a bear fattens itself up before the winter it is being a "Keynesian". When an ancient farmer stores surplus grain in a granary he is being a "Keynesian". It's such an obvious and natural strategy that Keynes really deserves no credit for it at all.
I rather have the impression that people who bag Keynes haven't actually read Keynes, so here are his words, emphasis added:
So which governments in the world are Keynesian then? None of them. About the closest they get is Norway with its Sovereign Wealth Fund: http://www.nbim.no/en/
Governments only implement one side of Keynesian policy; the spending part. Rather than save during the boom and spend in the bust, they simply spend at all times. Any attempt to save is shot-down politically, or eyed-off hungrily by Investment "Managers" to gamble with. The absurdity of the article above is even more obvious when considering that OECD nations delivered tax cuts during the last boom. How in the fuck is that Keynesian?
The failing of Keynesian policy comes down to a combination of a ridiculous debt-is-money system which prohibits large public sector savings (as it causes a private sector debt crisis), greed, weak leadership and ignorant people. It takes wisdom, courage, self-discipline, and maturity to save during the good times (or all of those factors plus control of the money stock). It was naive to think that it was going to work given the demonstrated madness of crowds and the greed of the banksters.
To think that the Austrian School offers an alternative that solves all problems is also naive. The world has a bastard-hybrid economic model which has been closer to the Austrian fantasy than the Keynesian fantasy for decades now and we're demonstrably worse off for it.
Neoliberalism IS Austrian.
Its well known fact that the foundation of Keynesian economics is that whenever there is an economic crisis, the working people should be left to drown while the treasury is emptied into the pockets of TBTF banks and other assorted financial criminals. Keynes said this many times.
Keynes never said anything about stepping in to create employment with public works (dams, highway construction, etc) when business failed to perform. The only thing that they ever talk about is protecting the elite.
Thank god they are discredited. I can't emagine returning to those disgusting terrible dark days during the Eisenhower administration when the 0.01 precent paid a 90% marginal tax rate, the evil unions were so powerful that they extorted honest and patriotic businessmen to pay such rediculous wages that workers could own their own houses and cars, and the government squandered the public's money on roads, schools and hospitals.
I vividily remember how times were so dire during Ike's Keynesian dictatorship that only one person in a family worked, and the other parent stayed home to raise the children. No doubt that was because there were no jobs available for the other parent. Perhaps it was because the evil unions robbed honest businessmen to the extent that they couldn't afford to hire both parents. How sad. Hopefully, the 1950s will never return. Thankfully those evil 90% tax rates on the job creators will never return, and jobs will be so plentiful that both parents will have 2 to 3 jobs each so they can bask in the warm glow of American non-unionized free market capitalism, the envy of the world.
Ike was such a fool. Not at all a wise hero like Reagan who fought to save the "Job creators" so they could continue to do their good work helping the rest of us.