Posted on 05/11/2010 7:11:05 AM PDT by Palter
This was supposed to have been the final triumph of John Maynard Keynes, the crisis in which governments actually did what he urged them to do during the Great Depression, the proof that an elite of puppeteers in control of monetary and fiscal policy could make the innumerable actors in economic life march wide-eyed toward recovery.
Keynes' idea is simple; in fact, it is simple by construction, for it focuses on the very short term within a closed economy. If consumers won't spend, the government will spend for them; if businesses won't invest, the government will invest for them; and if investors won't take risks, the central bank will reduce the yield on low-risk investments to almost nothing.
No forecaster of note a month ago expected the Greek debt problem to threaten the world financial system, yet it has. Nemesis always comes in through the unwatched door. The risk is that lending among international banks may freeze up as it did during the late autumn and winter of 2008-2009, with catastrophic consequences for governments that depend on the banks to fund enormous deficits.
The cost of insurance against European bank defaults is now even higher than after the Lehman Brothers bankruptcy of 2008. This is not a drill. It is a real crisis. Perhaps the European Community will calm things down for the moment. No matter: if they succeed, the crisis will find another outlet soon enough.
The Barack Obama administration, like most of the world's governments, decided on a massive dose of Keynesian medicine, taking the budget deficit to an unheard-of peacetime level of 13% and keeping short-term interest rates at near zero.
(Excerpt) Read more at atimes.com ...
Courtesy ping. Nice article.
Now, go get you some Milton Friedman and Thomas Sowell and read up on how economics really works!
Bingo!
We have a winner.
One of the tenants of Keynesian Economics is the government is supposed to take in the good times and give back in the bad times.
IOW tax high in the good times and lower taxes in the bad when they start to spend more in stimulus.
The problem is these dolts even do Keynesian Economics wrong (which is wrong in the first place) so they take a bad policy and make it ten times worse!
A little dose of Hayek or Von Mises might help as well. Barry and the elite corruptocrats advising him would never follow the theories of Hayek, Friedman, et al because it would deprive them of the ability to fleece the people.
The crony capitalism of today is the perfect blend of our corrupt political class and the Wall St fraudsters.
JP Morgan and DeutsheBank control over 95% of the silver market, but yesterday the gov’t could not finally ignore their illegal acts and launched an investigation. The silver market is on fire as a result. Ditto gold and the lack of physical gold which the big banks claim to be ‘holding’ for their clients. The whole financial system seems to be being exposed as a massive fraud.
JK was by all accounts (koff koff) gay.
So he didn’t care about anything but the here and now.
he knew he would have no children, so why care about the future.
and it shows.
call it as you see it, but for me....
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