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I concur.
Posted on 02/04/2009 9:49:29 PM PST by Eric Blair 2084
"In the long run, we are all dead," John Maynard Keynes once quipped. An influential British economist, Keynes used the line to dodge the problematic long-term implications of his policy proposals. His analysis of the Great Depression redefined economics in the 1930s and asserted that increased government spending during a downturn could revive the economy.
President Barack Obama and congressional Democrats (very few of whom likely have read Keynes's 1936 book "The General Theory of Employment, Interest and Money") have dug up the dead economist's convenient justification for deficit spending in defense of their bloated stimulus legislation. But none ask the most important question: Was Keynes right?
According to Nobel economist Friedrich Hayek, a contemporary of Keynes and perhaps his greatest critic, Keynes "was guided by one central idea . . . that general employment was always positively correlated with the aggregate demand for consumer goods." Keynes argued that government should intervene in the economy to maintain aggregate demand and full employment, with the goal of smoothing out business cycles. During recessions, he asserted, government should borrow money and spend it.
Keynes's thinking was a decisive departure from classical economics, because arbitrary "macro" constructs like aggregate demand had no basis in the microeconomic science of human action. As Hayek observed, "some of the most orthodox disciples of Keynes appear consistently to have thrown overboard all the traditional theory of price determination and of distribution, all that used to be the backbone of economic theory, and in consequence, in my opinion, to have ceased to understand any economics."
(Excerpt) Read more at online.wsj.com ...
Frankly, economics is not an exact science. It's a social science. All silly opinions are welcome.
They are on Capital Hill and the White House.
I concur.
You’d have to admit that to most Dems the phrase “Keynesian multiplier” means “government spending is inherently beneficial.” That isn’t even what Keynes meant by it. And no, I don’t honestly think Nancy Pelosi has read a word of him, or Hayek, or von Mises. She’s holding out for the Classics Comics version.
The Problem about Keynes “anti-cyclic” theories is, that most gouvernments are doing well in spending the money during a recession ( As required by the theory ), but fail to save the money in the good times with economic growth ( Also required by the theory ).
actually, in this circumstance, I'm okay with good things coming in TWOs!
Hmm...judging from the thread you also should have quoted that Nobel Prize-winning economist Manfred von Zeta-Jones. ;-)
Yeah, that worked so well for FDR from 1932 to 1940. An 8 year recession. Wouldn't want a good crisis to go to waste!
I represent that remark.
"Free to Choose"
"The Road to Serfdom"
Keynes is dead. Keynsianism is dead. Zombies roam the land.
Much more interesting than Keynesian multipliers.
You beat me to it. Great minds think alike!
Click on the link from the WSJ and go down to related articles on the web and click on that NPR of all places link. Great piece about how Keynes was a contradictory loon, and the comments after the article are even better.
I should have posted that.
Frankly, economics is not an exact science. It’s a social science.
So true...and a great observation. Some unfortunately take everything on word of what certain economist say.
Selma Hayek, the best thing to come out of Mexico since the Taco.
I bet he's laughing in is grave, right about now.
Zombies roam the land?
Did you ever watch the South Park episode “Night of the Living Homeless?”
nufsed
My view is that, at the margin, money is better spent in the private sector than in the public sector. Money spent in the private sector improves our standard of living. Money spent in the public sector often has the opposite effect. We should privatize a great many things. Short of that, we should reduce taxes and reduce government spending so that resources are shifted from public to private hands. We should also de-regulate.
The housing crisis was caused in large measure by over-regulation that forced bankers to make subprime loans. Banks did not want to make these loans, but government forced them to do so with the goal of making housing affordable to more people, including minorities.
Extreme environmental regulation and laws prevent the safe development of nuclear energy, and fuller utilization of our oil, gas, coal, and even hydroelectric resources.
Over regulation - Sarbanes-Oxley mark to market - are artificially depressing the stock market. Over-regulation discourages business start ups and growth.
Tort reform would also be a good idea. Labor unions are too strong.
Our problems are not so much macro-economic (fiscal, monetary) as micro-economic - death by a thousand cuts.
Re “Zombies roam the land”. Have you ever seen a bunch of Democrats in a room?
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