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Don't Mess With The Keynesians

Tyler Durden's picture


The compare and contrast discussions of Keynes and Hayek have wended their way over the last few years from learned academic texts to YouTube sensationalist rap videos. We have to say we have our preference among those two extremes. However, in a recent interview with Nicholas Wapshott of Reuters, INETeconomics pulls back the veil a little more of the borrow-and-spend short-termist optimism of Keynes versus the 'if it can go wrong, it will' pragmatist pessimism of Hayek. Unfortunately, it seems we are rapidly unlearning a number of the lessons of the eternal optimist - fixing the world right now in favor of solving the underlying problems and furthermore as Wapshott notes, civilization is a lot more fragile than one can imagine. Starting from the perspective that Hayek was engaged by the LSE to take on the establishment Cambridgian, their very different personal experiences of post-war, post-depression life set them looking for solutions from very different perspectives. While their public arguments were seen as ungentlemanly at the time, though published in journals, it became clear that Hayek faced an uphill battle, and perhaps only now, thanks to the collapsing capabilities (or willingness) of governments to borrow-and-spend, are we able to 'mess with the Keynesians'. While avoiding extreme politics and authoritarianism may be a common-sense raison d'etre, the ongoing devaluation wars could perhaps be as capable of pushing the world to these limits as any non-Keynesian solution ever was.


The full five-part interview can be found here.


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Sat, 12/24/2011 - 16:00 | 2009418 Cursive
Cursive's picture

Some people can take their medicine with one swallow (Austrians), others cry and bitch and sip on it until it is finally consummed (Keynesians).

Sat, 12/24/2011 - 16:11 | 2009434 redpill
redpill's picture

More like Austrians will suck it up and go through chemo, while the Keynesians will wait until the cancer metastasizes throughout their entire body and then ask for a dose of morphine to ease the pain.


Sat, 12/24/2011 - 16:17 | 2009439 Oh regional Indian
Oh regional Indian's picture

Even more like people will use increasingly complex words to explain simpler and simpler concepts, whille Keynesians and Austrains continue to drink their respective kool-aids and grind along in an uncomfortable compromise of a life.



Sat, 12/24/2011 - 16:30 | 2009456 economics1996
economics1996's picture

Keynesians are all about models and predicting future behavior.  They believe in central command economies through "fiscal" aka taxing, borrowing, printing, and central banking, printing money and reducing the money supply.

Austrians are free market, we believe in Mises and the Austrian credit theory which is 180 opposite the Keynes theory.  Proper allocation of money, time, and resources between different sectors of society are fundamental, as well as sound money.

Sat, 12/24/2011 - 17:18 | 2009496 economics1996
economics1996's picture


The only trick of the Keynesians is to print, borrow, tax, and spread it around to the political elites, Wall Street, and the Federal Reserve.  Look at the monetary base in "good" times increasing 15% a year.  Pay off money that was taxed from workers through inflation.  When this shit crashes and the peasants ever find out about these crooks they will hang em high.


Ron Paul.

Sat, 12/24/2011 - 18:13 | 2009539 Surly Bear
Surly Bear's picture


Fight of the Century: Keynes vs. Hayek Round Two

Sat, 12/24/2011 - 20:09 | 2009618 meghaljani
meghaljani's picture

History shows quite the opposite. Peasants never find out that they have been robbed by inflation. All they want is sometihng more from government and cry if they do not get it. Just look Europe (and America too if we are unlucky). 

Sun, 12/25/2011 - 14:13 | 2010487 ScratInTheHat
ScratInTheHat's picture

I’m just wondering why this Keynes admiration piece was posted here. Hayek is dismissed at almost every turn by this fool.

Mon, 12/26/2011 - 13:33 | 2011891 economics1996
economics1996's picture


Sun, 12/25/2011 - 00:45 | 2009847 Libertarian777
Libertarian777's picture



That is the central tenant. The difference between Keynesians and Austrians.


It's not about actual monetary or fiscal policy, the underlying premise is what differs.

Keynesians believe in central economic planning, that a board of 12 (or less) can determine what spending rates 'should be', what interest rates 'should be', what you 'should eat', what you 'should buy', what you 'should pay'.


Austrians believe in individual liberty and free markets. There is no 'market' as Keynesians believe. A market is just an aggregation of billions of INDIVIDUAL choices. Not a single (central) choice forced on the aggregate. Austrians don't belive in 'should', Austrians just believe in 'IS'. Left unmolested, people will make individual choices. These choices are reflected in the aggregate prices they are willing to buy and sell things at, giving signals to other individuals what IS in demand. There is no 'demand SHOULD be X x Y qty'.

Sat, 12/24/2011 - 16:38 | 2009464 disabledvet
disabledvet's picture

"war" for example. As you know this is our holiday season ORI and i hope there's still some of that spirit left in you given your time and experience here. I will say this: the Civil War that has gripped this country for well over a decade now is over. I'm not sure i'm going to celebrate the victory however.

Sat, 12/24/2011 - 16:44 | 2009467 AnAnonymous
AnAnonymous's picture

whille Keynesians and Austrains continue to drink their respective kool-aids and grind along in an uncomfortable compromise of a life.

Propagandists enabling each other... One US citizenism speciality...

Sat, 12/24/2011 - 16:47 | 2009471 economics1996
economics1996's picture

What Austrian kool-aid?

Sat, 12/24/2011 - 17:17 | 2009497 spiral_eyes
spiral_eyes's picture


Sat, 12/24/2011 - 18:15 | 2009542 Freegolder
Freegolder's picture

Meaningless comment designed to drive traffic to your blog where you will try to sell them a DVD.

Sun, 12/25/2011 - 01:48 | 2009913 Oh regional Indian
Oh regional Indian's picture


Merry Christmas to YOU Freegolder.

May you be freed of your gold!


Sun, 12/25/2011 - 02:00 | 2009922 Vic Vinegar
Vic Vinegar's picture

Take a look at this plan ORI.  LOL:

Kudos to Sunny Leone!  Not sure if she reads your blog or not.

Do me a solid and upload episodes of Big Boss to your site.  It's sure to generate the traffic you so desire.

Sat, 12/24/2011 - 16:27 | 2009455 Long-John-Silver
Long-John-Silver's picture
Mr. Ponzi approved of Keynesian economics.
Sat, 12/24/2011 - 17:03 | 2009486 centerline
centerline's picture

Right on.  Because the key principle is spreading malivestment out over all the people instead of concentrating it on a few.  The concept is sound in it's intent.  In fact, it is very noble. But, so easily corrupted.  


Sat, 12/24/2011 - 18:06 | 2009519 Zero Govt
Zero Govt's picture

Keynes is a rice paper thin sugar venere that allows Govt scum to continue their spending orgy (indeed a sick excuse to stupendously increase it) into recession, rather than cut their cloth to the economy like everyone else

like all political policies it is wrapped up with the promise it'll do us some good when in fact it's the worst possible policy (digs the hole deeper). It covers also for the fact politicians are spineless pompous Empire builders who have no stomach and no discipline to make cuts to their beloved throne room and see themselves above societies grotty suffering

(see Washington 4 long years into recession and not a budget cut in sight with DC property values still living it up in LaLa Land)

Keynes is an academic (hired Govt crone) sugar coating the steaming turd that is Govt

Sat, 12/24/2011 - 16:31 | 2009457 JPM Hater001
JPM Hater001's picture

He absolutely nails it when he points out that Keynes said borrow to boost aggregate demand and pay it back later.

Hayek of course understood (as far as you can) the unpredictable nature of man.  And that is that man would never pay it off.  And as all good Keynsians will tell you, When your in a slump just break something.

Our economy is officially broke.  Call the plumber.

Sat, 12/24/2011 - 17:58 | 2009525 AldousHuxley
AldousHuxley's picture

Instead of a plumber we have domino builders racing against time as dominos fall...

Sat, 12/24/2011 - 19:10 | 2009538 Zero Govt
Zero Govt's picture

even the dominos are made of debt

let them fall where they will ..because i ain't paying the bill

Sat, 12/24/2011 - 16:36 | 2009459 Burnbright
Burnbright's picture

Stupidest fucking idiot.

Replacing government spending with private sector aggregate demand only ensures increased need for government spending to prop up the artificial demand created by the government, more government spending to encourage growth, and higher taxes and inflation to pay for it all. It ensures that the country will never escape the need for continued borrowing until it blows up its own currency.

How does this dumb mother fucker have a job? Oh wait, government spending ...

Sat, 12/24/2011 - 16:44 | 2009466 disabledvet
disabledvet's picture

It is how the USA got out of the Great Depression. We called it..."World War II." Don't think that because Governments must spend they have no clue about "it's the economy, stupid." That is by far the largest misconception of Conservative economists in the USA. They call government spending "wasteful." Is it? Or is the problem..."not enough bang for the buck"? Cuz if it's the latter...there's a LOT more government coming our way.

Sat, 12/24/2011 - 16:50 | 2009476 economics1996
economics1996's picture

37% of the GDP went towards war, millions killed, billions of property destroyed, rationing, shortages, dictatorship, sorry I will pass on that economic plan.

Sat, 12/24/2011 - 16:57 | 2009483 Oppressed In Ca...
Oppressed In California's picture

Once again the simplistic canard about WWII ending the Great Depression.  First, go read what Bob Higgs has to say about this.  Then consider that all the big time Keynesians (Samuelson, et al) expected a frightful recession at the end of WWII with the drastic fall in government spending.  After all, a lot less G means a lot less AD.  Then consider that much of the world's industires were bombed flat (excepting the US) and you won't have to resort to kneejerk liberal fantasies about government spending.  Finally, doesn't Krugman want an invasion from outer space to solve our current economic woes? Some solution.

Sun, 12/25/2011 - 01:17 | 2009882 GiantVampireSqu...
GiantVampireSquid vs OWS UFC 2012's picture

Except the US kept the war machine going, while other countries de-militarised, the US did not.  The US has been on a permanent war footing since WWII.  48% of golbal military spending is US spending.

Sat, 12/24/2011 - 17:12 | 2009493 economics1996
economics1996's picture

Yep, it’s all bull shit.  Government creates nothing; they take from productive members of society.  When people realize the only trick in the Keynesian bag is to move money around, printing, borrowing, taxing, the gig is up for them.  The real propose of Keynesian economics is to baffle the public with bull shit so the elites in Washington, Wall Street and the Federal Reserve can rip them off though their favorite transmission mechanism, inflation.

If the public ever really understood economics they would hang these mother fuckers from the nearest tree.

Sat, 12/24/2011 - 17:22 | 2009502 LeBalance
LeBalance's picture

classic flimflam, so that Bobby doesn't have to work and gets to tell you how to.

centralists versus decentralists.

commies versus libertarians.

"it's really for the greater good."

"i am from the government and i am here to help."

Sat, 12/24/2011 - 18:26 | 2009549 Zero Govt
Zero Govt's picture

Yep... politicians like bwankers are the biggest pack of slackers in human history. Imagine your only job is to promise great things spending other peoples money?

despite politicos and bankers destroying country after country throughout history (omitted from all State school history, political and economic text books for some reason?) we still allow this deadly dumb scum duo to 'lead' us

we're precisely where we deserve to be allowing worthless unproductive parasites like Bush, Bumma, Barny Frank, Blankfein, Dimon and Paulson the reigns to power ...we're all out of wealth creators, ruled by lying suckers, the economy rammed with bloated uncompetitive suffocating monopolists and deep in the shit (debt)

Sat, 12/24/2011 - 20:15 | 2009622 meghaljani
meghaljani's picture

How many years do you want me to wait for before they start understanding? May be government will offer some more "free stuff" to forget what they understood? 

Sat, 12/24/2011 - 16:51 | 2009461 GeneMarchbanks
GeneMarchbanks's picture

Austerity is for Greeks. Anglos can spend their way to solvency...

Thuggery. Looting. Thievery. Sounds like London to me.

Meanwhile Moynihan thinks that 2012 is going to be a good year for BAC...

Sat, 12/24/2011 - 18:57 | 2009568 Zero Govt
Zero Govt's picture

"Thuggery. Looting. Thievery. Sounds like London to me."

That'll be the few hundred London financial gangsters, not the few dozen street teenage rioters... how has the FSC dealt with debt, auditors cooking bankrupt bankers books while accepting more depositors money, over-leverage, incompetent risk and compliance officers and hyperfraudification since 2008?

Prime Minister 'Call Me Twat' Camerons socially dysfunctional society is about to blow up in his own elite social circle ..let's hope the village idiot doesn't get indigestion swallowing his own foot stuck in his mouth

Sat, 12/24/2011 - 16:38 | 2009463 tony bonn
tony bonn's picture

the problem austrians have faced in fighting keyensians is that keynesian principles were applied to an economy which was capable of resisting its toxins because it had so much underlying strength...

finally 80 years of a high carb/high fat diet have taken its toll and it is now evident that the crap the voodoo economists were shoving down our throats was complete crap...

more importantly, keynesianism was never an economic theory in the first was intellectuoidal clap trap to fool the fucktards that the toxins it was shoveling down our throats was good for us...

yes, smoke 2 packs of cigarettes a day, eat a box of twinkies daily, and drink 1 gallon of coffee a day and you too can feel like the 6 million dollar man with all of his electronics short circuited....


Sat, 12/24/2011 - 16:41 | 2009465 Sean Fernyhough
Sean Fernyhough's picture

Yes.  Hyman Minsky was an optimist....

Sat, 12/24/2011 - 16:46 | 2009469 AnAnonymous
AnAnonymous's picture

Civilization is fragile or something...

First,one has to tell where civilization is and what the expectations of are.

This reminded, look out. Contrary to what US citizens claim, US citizenism is extremelly resilient. Much more than any dictatorship or the rest.

US citizenism allow some people (US citizens) in an eternal nature of behaviour.

Eternal might be fragile but it lasts long.

Sat, 12/24/2011 - 17:22 | 2009504 Silenus
Silenus's picture


Sat, 12/24/2011 - 18:03 | 2009529 Reese Bobby
Reese Bobby's picture

You should write a whole book of gibberish.  Working title: "Eternal Lasts Long-ism"

Sat, 12/24/2011 - 17:01 | 2009485 Stoploss
Stoploss's picture

Time and human nature. Keynes two worst enemies.

Sat, 12/24/2011 - 17:11 | 2009492 knowless
knowless's picture

The only way they could expand the public sector any further would be to create manufacturing jobs.. what could they manufacture? guessing weapons, it seems like this guys opinion is that hayek didn't "get" what keynes was saying, because keynes was saying that the elite have the right to start wars to thin the herd, him being a lord and all.


o ho ho, chortle chortle, those fools! we'll just print money and pay them to make weapons to kill each other with! brilliant plan! cheers!


I love it, arrogant fucks.


Sat, 12/24/2011 - 17:13 | 2009494 ebworthen
ebworthen's picture



The addiction model is the best parallel.

You don't give an addict their drug of choice to cure the addiction; you allow consequences to occur.

Keynesians are dysfunctional enablers; Hayek and Austrians are tough love pragmatists.

Sat, 12/24/2011 - 17:18 | 2009498 hadriansnightmare
hadriansnightmare's picture

What a loon- he fails to mention the riots are a direct result of Keynesian policies- but now we need big govt to save us-

Sat, 12/24/2011 - 17:19 | 2009499 Quinvarius
Quinvarius's picture

He discounts Hayek by saying he just didn't understand Keynes.  LOL.

Sat, 12/24/2011 - 17:39 | 2009512 no life
no life's picture

If you disagree with Keynes, you must be a racist...

Sat, 12/24/2011 - 17:43 | 2009514 juujuuuujj
juujuuuujj's picture

Most Keynesians don't understand Keynes, most Marxians don't understand Marx and most free-marketeers don't really understand what Adam Smith described as a free market. Most Austrians haven't read much of Menger and Mises, and instead go with bigots like Ayn Rand and Milton Friedman. 

People just like to be in a team, without really understanding the theory or having read the books carefully. 

Sat, 12/24/2011 - 17:54 | 2009521 Reese Bobby
Reese Bobby's picture

Most people know "Economics" is a scam science of bullshit.  Make a difference: get a real job.

Sat, 12/24/2011 - 18:07 | 2009532 economics1996
economics1996's picture

Not if you understand it, Austrian.  It makes millionaires out of those that understand it.

Sat, 12/24/2011 - 18:24 | 2009553 Reese Bobby
Reese Bobby's picture

That's a crock in my experience.  I was an Economics major before I knew better and it had nothing to do with making millions, a topic I am familiar with.

Sat, 12/24/2011 - 18:01 | 2009528 ebworthen
ebworthen's picture

Go Redskins!

Sat, 12/24/2011 - 19:56 | 2009613 Calmyourself
Calmyourself's picture

Uhh, the Vikes kicked their asses..  Obviously unexpectedly..

Sat, 12/24/2011 - 22:29 | 2009692 ebworthen
ebworthen's picture

I'm just rootin' for the team, don't care if they win or lose.

The Vikings, methinks, deserved a win (considering).

Sat, 12/24/2011 - 18:05 | 2009530 economics1996
economics1996's picture

Uh, Ayn Rand was a Objectivism and Freidman was a Monetarist.

Sat, 12/24/2011 - 20:29 | 2009630 knowless
knowless's picture



but you are correct, it feels good to be accepted. they know this, and so enforce ideas which make the masses feel isolated.

Sat, 12/24/2011 - 17:59 | 2009518 Reese Bobby
Reese Bobby's picture

Wapshott is just another worthless WASP leech.

Sat, 12/24/2011 - 18:00 | 2009526 dcb
dcb's picture

OK, i GET THAT for ease of purpose the title is a bit simple. I do find it disturbing that you never mention that ke6ynes advocated a surplus in good times to spend in bad. what you say as keynes really isn'5t, because thezse fuckers never sAVE  in good times. what you label as keynesian realy isn't/ it's the"new economic synthesis" as discussed by minsky.  for ease of sound bite, etc I get it, and in fact I'm much more of an austrain, hayek. But keynes doesn't all the time deserve the crap he gets here.

Sat, 12/24/2011 - 18:05 | 2009531 Return2Sanity
Return2Sanity's picture


It goes hand-in-hand with the main fallacy of central banking, namely that capital and debt are interchangeable. Can't get a capitalist to invest in your business? No problem—just borrow it from the bank. Same thing, right? Hell no—a capitalist can wait a long time for your business to develop, but the banker wants payments to start right away, or at least at some predictable date in the near future. The banker is only interested in getting payback, not in the long-term success of your business.

Our whole culture has become obsessed with short-term profit and cash flow, and nobody seems to care about the long-term viability of our economy. So much so that the word “millionaire” no longer refers to how much you have (capital), it's now a reference to how much you make (cash flow).

Sat, 12/24/2011 - 18:57 | 2009577 Zadok
Zadok's picture

I would like to rehypothecate my green arrow to your articulate comment!

Sun, 12/25/2011 - 10:32 | 2010235 Return2Sanity
Return2Sanity's picture

Okay, as long as you know that your green arrow is going to the UK and it's not coming back!

Sat, 12/24/2011 - 18:09 | 2009537 Reese Bobby
Sat, 12/24/2011 - 18:18 | 2009546 Snakeeyes
Snakeeyes's picture

Our Keynesian/CentralBank/Socialsm obsession leaves the US with a NONEMPLOYMENT RATE OF 45.2%!

Jobless Claims and General Employment Trends - The Bigger, Badder Picture - Non-Employment Rate at 45.2%

Sat, 12/24/2011 - 18:28 | 2009556 Reese Bobby
Reese Bobby's picture

I like your comment but have you considered TPTB don't want their sheeple to have jobs?  It certainly seems like the policy goal is making as many people as possible reliant on Big Brother, no?

Sat, 12/24/2011 - 18:20 | 2009548 Sean Fernyhough
Sean Fernyhough's picture

Human nature?  In fact markets have emergent characteristics which cannot be understood by studying Robinson Crusoe. The next thing you'll be saying is market demand curves slope downwards because individual demand curves slope downwards.  

Sat, 12/24/2011 - 18:21 | 2009550 michael.suede
Sat, 12/24/2011 - 19:33 | 2009558 Reese Bobby
Reese Bobby's picture

Anyway, Merry Christmas everybody.  I know there are many well-meaning Christians on ZH.  You just don't jump down the throat of anyone who broaches the topic!  May God bless you, and spread The Word!  The times seems dark but Evil loses in the End.

Sat, 12/24/2011 - 18:39 | 2009561 RobotTrader
RobotTrader's picture

Writing Credit Bubble Bulletins since 1999


12 years after the infamous "Coin in the Fusebox" piece, and poor Doug Noland is still sitting slack-jawed, watching the Ponzi Pyramid get even bigger.

With no end in sight.

He's learned a lesson on how to respect "Infinite Fiat" and the power of paper.

Sat, 12/24/2011 - 19:05 | 2009566 akak
akak's picture

RowboatTraitor after jumping off the Empire State building:

"Well, I've passed the 90th, 80th, 70th, 60th, 50th, 40th, 30th and 20th floors, with absolutely nothing bad happening so far --- therefore, nothing bad can possibly happen to me now as a result of my jump."

But like the short-term-obsessed, momo-chasing lemming that he is, RowboatTraitor refuses to, or is incapable of, ever looking more than five minutes (at most) into the future.

Answer your critics here, you fucking bastard, or continue to play the cowardly troll.  Or are you actually Tyler(s) just fucking with us for shits and giggles?  I am increasingly coming to suspect that the latter is precisely the case; there is something very suspicious in how you ALWAYS and only post near the tail-end of any thread here.  And the fact that "Tyler" has NEVER responded to any of your bullshit comments here is revealing in and of itself.

Sat, 12/24/2011 - 19:33 | 2009598 youLilQuantFuker
youLilQuantFuker's picture

+1000 for bringing the funny.

Sat, 12/24/2011 - 20:44 | 2009636 knowless
knowless's picture

he's a tyler.

Sat, 12/24/2011 - 21:02 | 2009651 RockyRacoon
RockyRacoon's picture

I have actually seen a Tyler reply to Robo.  I guess we all talk to ourselves now and then, no?

Sat, 12/24/2011 - 23:25 | 2009671 akak
akak's picture

I have actually seen a Tyler reply to Robo.

Interesting.  I will have to take your word for that, Rocky, as I have never seen that myself --- not that it absolutely proves anything either way. 

I must admit, though, that this RobotTroll's comments are so formulaically anti-gold, pro-equities and pro-bankster, and are always so perfectly designed to antagonize the anti-establishment, anti-corruption consensus here, that I cannot believe that they actually represent the even half-honest opinions of anyone posting with even a minimum of sincerity.  The fact that he NEVER responds or replies to any other poster challenging his shallow, fly-by, antagonistic trolling only adds icing to the cake of suspicion.  He/she/it never responds to ANY posts by anyone, under any circumstances, for that matter --- is it only a bot?

Anyway, Merry Christmas Rocky, and to all other ZeroHedgers! 

(Except for RobotTroll --- I hope you are lonely and suffering.)

Sun, 12/25/2011 - 00:16 | 2009818 RockyRacoon
RockyRacoon's picture

And a jolly holiday to you my friend!

Sat, 12/24/2011 - 18:55 | 2009571 ebworthen
ebworthen's picture



I'm enjoying the image of Gorilla Ben squeezing quarters into the market fusebox with sparks flying.

Computer trading and keystroke trillions came along just in time for Greenspun, Bernank, and company, eh?

Sat, 12/24/2011 - 19:16 | 2009589 Georgesblog
Georgesblog's picture

Messing with Keynesians isn't the same as messin' with Sasquatch. You have to provoke Sasquatch.

Sat, 12/24/2011 - 19:16 | 2009590 youLilQuantFuker
youLilQuantFuker's picture

Was there a video in this post because I cannot see it?

I'm a javascript handicap.

If there was a video does anyone have the linkie?

It's considered poor form if you do not include the direct link in your article. Might as well spell Keynesians, Kensians.

Next time I see my favorite lawyer Trav7777 I'm going to talk to him about ZH policy vis-à-vis The Americans with Disabilities Act.

Sat, 12/24/2011 - 19:17 | 2009591 woggie
woggie's picture

Aw shucks! Just when I was getting comfortable with the notion of extreme politics and authoritarianism and engaging in guerilla warfare with the Obamanistas for the rest of my life.

Sat, 12/24/2011 - 19:18 | 2009592 Winston Smith 2009
Winston Smith 2009's picture

Keynesians work with an extremely flawed model, as if the ongoing economic crisis and their stupid attempts to fix the wrong problem didn't make that obvious.  Here's one of the guys who years ago showed them how wrong they are:



Sat, 12/24/2011 - 21:03 | 2009652 Monedas
Monedas's picture

Only a devout, strict adherence to Capitalism will get the World out of it's Keynesian Sociopathic Funk ! Only Capitalism can delegate decision making down to the grass roots of realism ! Capitalism is a benevolent master....firm, real and Korean Cult of the Personality ! Capitalism works without a bureaucracy ! It's efficiency on parade ! The people rule !  Monedas 2011  Comedy Jihad Waiting For The World To Come Back To A System That Works !

Sat, 12/24/2011 - 21:12 | 2009656 RockyRacoon
RockyRacoon's picture

It's all a buncha hooey.   Kinda like going into a bookstore in the Self-Help section and looking for one of the new diet books.   Everybody has a new, revolutionary diet on the market.   If you look at the last half of any of those books you'll find the diet and exercise section of the "Plan".   No plan is complete nor effective without some common-sense application of a good food and exercise regimen.   None of these crappy economic plans is worth a hoot without some basic age-old wisdom and reason applied.   Stuff that we all know, but are too lazy or crooked to implement.  The front part of the book is useless without them.

Sat, 12/24/2011 - 22:50 | 2009719 longonSpam
longonSpam's picture

Go right ahead and junk the fuck out of this, like I fucking care.. What the fuck are you all talking about that the government never creates anything?!? Cellular, electronics, jet propulsion, the space program, the national highway system, nuclear power, national parks, on & on all developed & built by the US Government. Not always profitable or done particularly efficiently but it's not Spain or Japan either. Pretty good bang for the buck at least until the last 30 years. What other entity could possibly do the Superfund sites and not be totally bankrupted by them? It costs money to do big things and you can do it with yes fiat money if you want to as long as you create real capital as you increase the money supply. Keynesianism and Austrian labels don't even matter, all that matters is having law & order for everyone and big giant balls to take real risk like the Space Race and the National Highway Program that will provide real capital opportunity for generations. You don't do it for the temporary jobs building roads or rockets, you do it to make new places to put plants and businesses and communities and space stations and incidentally once that all gets there the people that built it have the skills necessary to create things and initial capital to invest in themselves. There's nothing even close to new here, this is a most basic concept and its been around since Adam Smith described it, really it goes back to Rome, this is how they did it..

Sun, 12/25/2011 - 03:21 | 2009956 ddtuttle
ddtuttle's picture

Whoa dude, get a clue!  The govenrment HIRES the rpivate sector to do all that stuff, and that includes the deign and conception of it.

Jet propulsion came from captured German technology.  Since it was known to work, private compaies like Lockheed, Grumman, Boeoing etc. jumped in and in about a year devliered the first practical jet engines.

Ever wonder what it would be like if we had a passnger train system instead of interstates?  GM & Ford made sure that would never happen.

Modern electronics are based ENTIRELY on the trasnsistor discovered at Bell Labs, a private company.

The space program was an employment policy for the scads of aeronautical engieers left over from WW-II.  It was an offshoot and compliment to the weapons programs for intercontinental missles.  The design, planning and execution was done by private contractors.

Nuclear power began with University research done by physicists like Enrico Fermi.  The manhattan project was run by UC Berkeley's Oppenheimer, and the actual government was kept out of until an actual weapon was delivered.  The government footed the bill, but was clueless about what was going on. 

Bureaucrats can't do anything accept tell other productive people not to do things.  It is necessary to exclude them from critical human edeavors.

I have no idea about National Parks accept that John Muir did NOT work for the Gvoernment.

Sun, 12/25/2011 - 03:42 | 2009964 longonSpam
longonSpam's picture

Of course we stole a bunch of scientists and technology from Germany (the German GOVERNMENT, DUH), that's the way it works and you'll notice that the Germans were so far ahead because of their massive expenditures in education and R&D. And yes Oppenheimer was a professor at a UC -THAT MEANS PUBLIC AS IN GOVERNMENT SUBSIDIZED- school. Bell Labs, everything else was ultimately either subsidized or directed by the government. As for the highway system it was the best option at the time and worked and continues to work. Trains were slower then. Now they go way faster, we should be building high speed rail all across the country. I'd love to take a train instead of drive into The City and from there to LA & Seattle instead of flying. We could do it as a public works or a private-public coop, I don't care just do it already.

Now explain the Superfunds Free Market Boy. Explain how the divine efficient markets would have ever done those in a thousand years and while you're at it I'd love to know what the good part of rivers on fire & 3 eyed toxic fish are from the massive pollution. I'm waiting with baited breath.

Mon, 12/26/2011 - 09:23 | 2011572 Marco
Marco's picture

Bell Labs ... a private monopolist (first by patents and later through regulation).

Sat, 12/24/2011 - 23:16 | 2009740 non_anon
non_anon's picture

ha ha, I thought it read, "Don't mess with the Kenyan"

Sat, 12/24/2011 - 23:26 | 2009754 akak
akak's picture

I read it as "Keynesians are a mess!"

Sat, 12/24/2011 - 23:48 | 2009781 non_anon
non_anon's picture

yean, the Kenyan in Chief is a Keynesian and is a mess

Sat, 12/24/2011 - 23:59 | 2009791 brown_hornet
brown_hornet's picture

LOS- transistors, jet propulsion, space program, interstate system, nuclear power, national parks, all developed by government  BEFORE we went off the gold standard.  Ever since, the only new things government has made are paper, food stamp recipients and maybe 10,000  Government Motors Volts.

Sun, 12/25/2011 - 02:01 | 2009924 longonSpam
longonSpam's picture

Uhh we went off the gold standard in 1933. No matter how you spin it this absoluteism is just stupid and nonsensical. Policy and theory can never replace honesty, ingenuity and willingness to live within & enforce fair law & order. The fiat money isn't the problem, the problem is the people gaming the system on one side & ignorance & apathy on the other. Going back to a gold standard right now would just make the system easier to manipulate. So it is what it is, there's no revolution if the vast majority doesn't care if they are debt slaves or not. The Middle Ages lasted a long fucking time and so will this bullshit.

Sun, 12/25/2011 - 02:30 | 2009933 Breaker
Breaker's picture

Check what happened to military spending between WWII and the Korean War. America was almost as unprepared for Korea as it was for WWII.

Sun, 12/25/2011 - 03:27 | 2009958 GoldBricker
GoldBricker's picture

There are different ways to look at this. FOFOA divides mankind into savers (Austrians/creditors) and spenders (Keynesians/debtors). This division holds across society and even down to the family level. Debtors have been in control for almost a century now, but debt's marginal utility is fast approaching zero.

The always-readable Nathan Lewis is worth a look here as well:

Sun, 12/25/2011 - 04:52 | 2010016 longonSpam
longonSpam's picture

You're high.. Keynes had no use for saving? That's nice.

Does anybody realize this is America circa 2011, not 1936 Madrid?

Sun, 12/25/2011 - 05:33 | 2010040 GoldBricker
GoldBricker's picture

You're high

Merry Christmas to you, too.

It's not so much that JMK had no use for saving, only that he thought that individual saving habits were pernicious during a liquidity trap. He certainly did not advocate theft-by-inflation from savers.

But JMK's emergency prescriptions were taken further by his followers to being a war on savers: inflation, taxation of interest, and other ills that were not features of the Gold Standard. Our system needs and favors debt and debtors.

Sun, 12/25/2011 - 06:16 | 2010068 longonSpam
longonSpam's picture

Dude I'm Jewish by race & atheist by choice. If you wanna celebrate control mechanisms ERR fairy tales ERR invisible people in the sky by putting a huge fire hazard in your living roomand buying shit nobody cares about all made in China be my guest but this just another Saturday night that I can't get to sleep. Maybe its the weight of being part of Newton Gingrich's worst nightmare, one of the millions of secular liberal Americans that aren't entitled to jackshit according to him & the rest of those religious psychotics. So where is the proof of absolution that all government is inherently evil & never provides any good to anyone & never has? And somebody please explain how the marketplace cleans up the Superfund sites if there's no government.

Sun, 12/25/2011 - 10:16 | 2010097 GoldBricker
GoldBricker's picture

Dude, you should get high and mellow out.

But seriously, the optimum size, role, and composition of government is an ancient problem. Try, for starters, Book 1 of Plato's Republic. Get the Allan Bloom translation, and read the interpretive essay covering Book 1. (Keep in mind that all this pre-dates the modern market idea, which holds that millions of independent individuals making their own decisions will usually be wiser than the wisest individual.)

Or you may subscribe to Bill Bonner's thesis that government is always and everywhere how insiders organize to enslave and fleece outsiders. (This, by the way, is the view of a guy named Thrasymacus in said Book 1; Bloom notes that Socrates never really refutes this view.)

Jesus says that one judges a tree by its fruit. Look around at America and the rich world, and behold the fruit of Keynesian government. Would something else have been better? Impossible to say, but the Keynesian tree seems top-heavy and about to fall over.


Sun, 12/25/2011 - 03:56 | 2009974 ddtuttle
ddtuttle's picture

Keynes  argued that the government could step in when the private sector faltered.  His motivation was from living between Communism in Russia and Facism in Germany.   Anythign that could prevent extreme politics would be a good thing.  The great dpression was follwed immediately by WW-II, which was the personification of  "extreme politics" on both sides.  This was followed by the baby boom and decades of true organic growth of population and productivity without unemployment.  So of course Keynes debts were easily extinguished.

But the moral hazard introduced by Keynes policies was that governments belived they could just borrow any amount of money to solve ANY political problem.  But this just went one way, and they began borrowing trillions to buy votes.  We entered a phase of perpetual borrowing to avoid having to raise taxes to unsustainable levels.  With all this free money governments promised free universal medical care, retirement, education ... whatever you need.  We'll worry about how to pay for it later.  Well, that was naive because later is now.

Keynes policies can work in a society with minimal debts experiencing an unexpected down-turn. Deficit government spending will certainly solve the problem in the short term. But to be sustainable, they society must restore its pre-crisis credit level, so that it can deal with subsequent crises.

Hayek was thinking about the debt end game, which he had experienced personally.  They were both talking about economies, but at very different stages of evoloution.  Keynes' economy is fundamentally healthy and responsible so deficit spending is not a serious burden. Hayek was talking about how to prevent an economy from becoming so indebted that it cannot recover.   I'm convinced that if you had shown Keynes the total US debt of $54 trillion, with a GDP of $15 trillion, he would NOT have prescribed more debt. He probably would have agreed with Hayek that more debt would be a disaster.

Hayek's point was: there is such a thing as unsustainble debt, and that when that level is breeched,  collapse is just a matter of time.  Keynes ideas were never intended to reach levels like that.  But he introduced the central moral hazard, the preverse incentive for politicians to just leave the debts for future generations. Since perverse incentives lead to perverse behavior, we now have 70 years of perverse borrowing by "Keynesian politicains" and we are well into the Hayek zome of no return.

Sun, 12/25/2011 - 10:39 | 2010240 Yen Cross
Yen Cross's picture

 Ya gotta love that, [ Truncated] , blue necktie.<

Sun, 12/25/2011 - 12:47 | 2010385 Peter K
Peter K's picture

"While their public arguments were seen as ungentlemanly at the time, though published in journals, it became clear that Hayek faced an uphill battle, and perhaps only now, thanks to the collapsing capabilities (or willingness) of governments to borrow-and-spend, are we able to 'mess with the Keynesians'."


One other aspect of the "didn't mess with the Keynsians" is their proximity to the Marxists. I think it would be fair to say that no rational economist that wants to be taken seriously would go around calling himself a Marxist economist. And it would also be safe to say that if an economist was a Marxist economist, he could easily pass himself off as a Keynsian. And I think that is is what is driving the above quoted dynamic:)

Sun, 12/25/2011 - 14:21 | 2010490 JW n FL
JW n FL's picture



I understand that everyone wants to be right..

the ego demands it!

the red v blue.

the Keynesians v austerity.

it doesn’t matter.. it is all just entertainment.

if you are dumb, you run towards what you can comprehend which would be red v blue.. faith! one must have faith and spread the word! killing babies is bad.. for all those who would not normally sling mud.. faith is used to drive then, herd them into a mudslinging match..

what do they all have in common? they are stupid, poor and fighting for a feeling..

they are not fighting for reality, changing an abortion law means nothing to the leaders of this world we all suffer.

so.. then we move onto the pseudo intellectuals.. the geniuses! of the crowd.

some of which are the smartest in their families (or so they have talked themselves into believing, ego!)

those who want NOTHING! more than to protect their wealth (the very little they have) and maybe (if they are egotistical enough) to protect their lineage.

regressive v progressive.

and we have very clever (so they would fill themselves up with thoughts of being) on each side.. still slinging mud.. and with NO! real baring on anyones reality!

We should be responsible with money! that’s how they eeked out the very little they have..


the print and spend and thusly all ships rise when the tide comes in.

all bullshit.

all drivel.

all swill.

all so that the lesser beings may be provided mud to sling.

all for the entertainment of the masses.

and it is always! always!! the lesser attacking the lesser while the leaders step over the brawls, walk around the violence to pick pocket everyone while they are busy not paying attention to the larger robbery.

but alas!

you have your souls! v you have your freedom!


The facts are these..

No matter which meme is followed.. the same old rats will be steering the ship and putting the masses onto the rocks.

That is the only way that the few can have more for them and their families.

Ego drives the lucky sperm club too, dontchya know?

Fraud is celebrated!

Wall Street is Governed almost exclusively by Civil Process.

Main Street is Governed almost exclusively by Criminal Process.

The more they can steal from you the higher up the ladder they go!

Psycho’s are rewarded for not having any feeling for their fellow human beings.. for being able to squeeze the most life / production they can out of as many as they can.. and the consequences be damned! The harm caused be damned!

Only a sick person can cause harm on that scale and not have a break of some sort.

A normal person, a healthy person would not be able to cause wide spread harm and still function or highly function especially!


Those are facts.

What can be done to change those facts?

Almost certainly no more than 5 seconds after you read this something that makes you feel more strongly will come along and drive you, or they will herd you in some tail chasing meme against your fellow peer(s).


There are not enough smart people that are disciplined enough to stay the course to see real change brought about.


Oops! I feel like eating cookies because it is more gratifying than trying to educate an egotistical group who would rather create an argument where they feel empowered.


Merry Christmas to ALL!

And if Jesus is not your Savior I will Pray for you in Hell!




Sun, 12/25/2011 - 15:30 | 2010567 Remington IV
Remington IV's picture

giving a machine gun to a monkey

Sun, 12/25/2011 - 20:34 | 2010824 Tompooz
Tompooz's picture

"Don't mess with the Keynsians" ? Sounds a bit threatening.

 Is Austrianism going to be the new thought-crime?

Like: "You admitted to Austrian thinking, off to the FEMA camp with you!"


Happy New Year  ZH-ers.


Mon, 12/26/2011 - 08:59 | 2011568 DavidC
DavidC's picture

It's too late now, bit I wonder where we would be if 'truer' Keynesianism had been applied, i.e. SAVE during the good times to smooth out the trough and spend during the bad times. Instead of which, we had massive spending during the good times, leaving no fallback when the crisis hit. And it's being made worse by more and more spending of money that ISN'T THERE.

I'm not a fan of Keynes, but let's bear in mind his theories have never been applied properly.

Wed, 01/04/2012 - 03:31 | 2032066 tianya201
tianya201's picture

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