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Keynes Was Really A Conservative
| 14 Aug 2009
| Bruce Bartlett
Posted on 08/13/2009 9:44:15 PM PDT by BGHater
In ''General Theory'' the economist outlines his belief of the government's role in a recession.
Conservatives continue to decry the $787 billion stimulus package enacted in February. At best, they think it accomplished nothing because the additional federal borrowing took as much out of the economy as the stimulus put in. At worst, the deficits and enlargement of government will lead to slower growth and inflation not too far down the road.
Those on the right have been making this same argument ever since British economist John Maynard Keynes popularized the idea of using budget deficits to stimulate growth in his 1936 book, The General Theory of Employment, Interest and Money. For this reason, Keynes, even more so than Karl Marx, is the principal bête noire of free market economists. They believe governments should never do anything to counteract economic downturns. Consequently, they must implicitly believe that all recessions are the result of massive and simultaneous failures by private businesses and workers who must therefore bear all the costs of adjustment. By opposing government intervention, free market economists are saying that it either made no mistakes or should do nothing to fix those it may have made.
What Keynes understood is that governments bear primary responsibility for recessions. In really severe downturns, such as we suffered in the 1930s and are suffering today, government action is essential to turn the economy around; the private sector simply can't do it on its own. He also understood that democratic societies cannot long tolerate high levels of unemployment. At some point, people will jettison capitalism for some sort of socialism, which would threaten democracy as well.
Keynes' efforts were motivated by a strong desire to maintain the liberal capitalist order. Honest conservatives have always understood this.
(Excerpt) Read more at forbes.com ...
TOPICS: Books/Literature; Business/Economy
KEYWORDS: brucebartlett; conservative; economy; keynes
posted on 08/13/2009 9:44:16 PM PDT
posted on 08/13/2009 9:44:39 PM PDT
(Insanity is voting for Republicans and expecting Conservatism.)
"In really severe downturns, such as we suffered in the 1930s and are suffering today, government action is essential to turn the economy around"
Bruce, you ignorant slut. You're really batting 1000 in the misguided nonsense department. Government "action" in the Depression EXACERBATED the problem and prevented a swift and speedy recovery. Government does best in economics when it interferes in the free market LEAST.
posted on 08/13/2009 9:52:26 PM PDT
(~"This is what happens when you find a stranger in the Alps !"~~)
Hear hear! Funny, Nazi Germany did a MUCH better job of turning around their economy in the 1930’s using much more public debt than either the US or Britain. If Keynes’ theories are so good, why did Albert Speer do so much better in Nazi Germany?
Anybody remember the movie “Ghost Dad” where Bill Cosby as a ghost goes through the phone to scare his daughter’s boyfriend? Too bad Hayek couldn’t come back and put the fear of God into a certain Forbes’ author’s head.
posted on 08/13/2009 10:03:16 PM PDT
Note: the Nazis’ massive debt would have led to war sooner or later and the economic recovery was made by eliminating unemployment through conscription and a steroided military industrial complex. I in no way endorse those policies, just pointing out an example where reality interferes with Keynes and his lingering supporters.
posted on 08/13/2009 10:07:10 PM PDT
Note: the Nazis massive debt would have led to war sooner or later...
Germany did not go into debt in the 1930's. They issued debt-free money and paid for their public works programs with it.
posted on 08/13/2009 10:21:44 PM PDT
The government caused tehese recessions and depressions, so more government is the cure? Run that by me again — it makes no sense.
How did Coolidge staunch a recession? How did Reagan get us out of one? They cut taxes.
We’re in a recession now because The Clinotonistas and the Bushies spent like drunken sailors and Obama has put the pedal to the metal on all of those wild spending ideas plus several of his own.
Restraint is what will get us out of a recession, not Keynesianism.
Keynes was a conservative as much as Obama is.
posted on 08/13/2009 10:54:09 PM PDT
(Obama lies, Granny dies.)
posted on 08/13/2009 11:33:53 PM PDT
(If its Astroturf why are you trying to mow it?(sign seen at a town hall meeting))
They believe governments should never do anything to counteract economic downturns.
'Too big to fail' is a socialist construct. Too big to fail also means, too small to succeed. Failure is a necessary restraint. It removes imprudent risk-takers from the equation and allows for innovators to take those places at the table of commerce.
Anti-Keynesians, like myself, believe that the government attempts to centrally plan the economy are the CAUSE of economic downturns. For example, Greenspan's free money, on top of government guarantees for loans, are a catalyst to the bubble that just burst. Bernanke's helicopter ride isn't planning the next economic great period, but reacting to the failures of the last attempts to manipulate the money supply. The next new and great attempt to manipulate the money supply will be a reaction to the helicopter ride. And so it goes.
We aren't acting, we're reacting. We aren't riding the wave, we're chasing our tails. This is the history of central planning. It is always a failure, whether we are discussing the number of peanuts produced and distributed each year, or, the number of dollars.
I will agree that Keynes did subscribe to using better economic times to take gov't spending off the table and a true picture of Keyne's philosophy would provide more balance in the overall equation. However, that is NOT what is traditionally considered to be Keynesian economics, today. Washington loves Keynesian economics because it prescribes more gov't spending as the cure for bad times, good times, even hangnails. It's easy to see why Washington loves a theory of money that involves its own reckless spending.
It's also easy to see how central planning is the problem and more of it isn't the solution. That's true no matter what the central planners target: health care, salaries, stimulus packages, or the number of dollars in the current money supply.
Friedman advocated the k-percent rule. Set monetary growth as a "k" percent of GDP (3-5%), and then leave it alone. The free market will consistently behave with a consistent government policy to not interfere with it. More government interference isn't the solution; it's the problem.
To directly rebut the assertion made, while Keynes, in theory, isn't as bad as his ideas are IN PRACTICE, the man was anything BUT a conservative. He was a central planner and believed that the smartest boys in the room could make government control work. It's only been a failure every time it's tried because they haven't tried it, yet.
posted on 08/14/2009 12:35:16 AM PDT
(FReeper for Congress: www.TimothyforCongress.com)
posted on 08/14/2009 9:01:45 AM PDT
(FReeper for Congress: www.TimothyforCongress.com)
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