Skip to comments.The Keynesian Legacy Unravels
Posted on 12/28/2012 3:11:26 PM PST by zantus
Ideology is powerful, capable of masking unpleasant facts. Whether we recognize it or not, we are all slaves to ideology.
Economists are no different in that regard than other people. They hold preconceived ideas which affect the interpretation of data and facts. In the extreme, ideology is capable of blocking the recognition of contradictory information, effectively blinding a person to valuable evidence.
Keynesian economists believe, regardless of logic and data, that economies can be managed from the top down. In their world, economies are little different than machines. Change some inputs here, speed them up over there, add some lubrication, etc. and the machine will respond in the fashion desired. Output can be managed to whatever level needed purely by adjusting the parts of the machine.
Austrian economists on the other hand do not see a machine. They see millions of individuals all making decisions to improve their own lives. The price system provides the coordination among these separate pieces, performing a function no human, supercomputer or government could ever accomplish. For Austrians, economics is a bottom up approach. To effect change, you must change the incentives and disincentives that individual decision makers are afforded.
(Excerpt) Read more at economicnoise.com ...
Do you mean this stolen one?
Heh. Maybe even double-Heh.
Keynesians will never admit they’re wrong. Deficit spending is only around 10% of GDP. No matter how much deficit spending, Keynesians will always claim the deficit has to be by a higher percentage to work.
Yup, that’s the one....;)
What seems to have prevented you from simply posting it here?
It has ?
...Gee from my perspective...it's still the leading economic theory in Washington, Wall Street, every major paper of record, all the major academia institutions, liberal think tanks...etc...
Keynesian economic theory is far from discredited...it should be treated like the red haired step child...
Good point, at some point it should be obvious that central tinkering is couter produtive to letting a market self regulate. I am no expert by any means, so:
Question, is there even a single example in the world of Keynesianism working. I don’t know and am wondering, because it doesn’t seem to work here.
Popman, I read the article and found it intresting. I didn’t really consider it from the perspective of your reply. Your right, it’s hard to claim it’s unraveling when it’s the predominant economic theory. Thanks for bringing down to earth.
If you understand that the sole purpose of fiat money is to destroy the people’s wealth, then you would know that Keynesianism works very well.
s/ Government spending is an ‘investment’, and borrowing money to invest is a good idea.
If the ‘investment’ doesn’t yield enough to pay back the loan, that just means that not enough was borrowed and invested. /s
Micro-Keynesianism is what companies like Bain Capital do: Borrow money to invest.
Keynes said that to reverse a recession the government should stimulate private sector investment with deficit spending by borrowing money (for example, that is not what President Obama has done - almost all of his stimulus money went to government programs and workers - federal money bailed out state programs, and unions more specifically). Keynes favored surplus spending during economic expansion to pay for additional spending during downturns. If deficits became necessary Keynes also directed that a parallel plan be devised at the same time to immediately reduce the deficit into a surplus to rebalance the books once the recession was over (don't hold your breath waiting for Obama's surplus plan). Keynes opposed structural deficits like America has had for decades. He advocated only temporary deficits and debt, with surpluses as a norm. That has never happened. Keynesian deficit/surplus economics has NEVER been utilized by an American government since Keynes put out his theory. And Keynes did not advocate that government should or even could stimulate consumer demand (as liberals constantly claim), only that it could help sustain private investment, which also rules out tax increases during downturns.
Since Herbert Hoover America has been economically managed using a model more accurately labeled progressive-fascism.
There you go, posting facts instead of the usual nonsense that gets tagged to ol’ John Maynard’s name.
Once, after attending a meeting of ‘Keynesians’, Keynes told his wife Lydia “I was the only non-Keynesian there”.
Yup. The spend, tax and regulate to death policies of today’s liberals are right out of the FDRHoover playbook.