Posted on 11/29/2008 1:11:14 PM PST by reaganaut1
Inflation-racked countries scorn all the self-abnegating rituals that make capitalism work. They want their guns and their butter and they want them now. So they print money to pay for them. By contrast, low-inflation countries are committed to an ethos of scrimping and toiling that yields long-term rewards. In “The Great Inflation and Its Aftermath,” Samuelson studies the transformation of the United States from the first kind of country to the second.
The villain in Samuelson’s morality tale is a group of intellectuals who came into fashion during World War II, then came into power with the Kennedy administration. John F. Kennedy himself had sound economic instincts. But he was seduced by his chief economic adviser, a University of Minnesota professor named Walter Heller, who argued that more rational management of the economy would produce permanently higher growth. “Heller was an aggressive salesman for what ultimately became known as the ‘new economics,’ ” Samuelson writes, but he was “hardly a one-man band.” Many of the day’s leading economic lights — James Tobin of Yale and Robert Solow and Paul Samuelson (no relation to Robert), both of M.I.T. — held similar views.
At the heart of the “new economics” was a concept called the Phillips Curve, which summarized the trade-off between unemployment and inflation. The idea was that an economy could experience very low unemployment and high inflation, or very high unemployment and low inflation, or any combination therein. Heller persuaded Kennedy to move leftward along this spectrum by stimulating the economy — effectively accepting higher inflation in exchange for more jobs.
It worked for a time. The economy flourished; inflation inched up only marginally. But as the Kennedy administration became the Johnson administration became Nixon became Carter, growth stagnated and inflation skyrocketed.
(Excerpt) Read more at nytimes.com ...
There are Keynesian Freepers. There are no freemarket Keynesians. At best they are “Fabians.”
Many finance people, folks who get rich in the market and running businesses are not economists. Finance is the art of making money for yourself and your employer, of getting things “funded.” and directing and redirecting streams of money. It is great for raising money and selling products. It is disastrous when finance men are put in charge of the economy.Paulson is a finance man.He has a very limited understanding of economics. Or he understands it but is focused on the narrower and more remunerative area of Finance for his own gain and his allies’ gain.
You are surly experiencing maximal bliss. Read Keynes. Then pick a longish paragraph that contains a premise and a conclusion and explain how he got from the one to the other.
Out there in the ocean there was no way to get the loot to the Cayman Islands in a form that would not sink with the ship. Paulson and the Goldmansachsians are not in that position.
Why?
And, like so many of his kind, he does not understand that markets trade wealth but do not create it. Thus, he wears dangerous blinders.
Now, it's later. The Austrians will be the last standing, in the economic wreckage of Keynes's long run.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
-~~Ludwig Von Mises
And it worked, for he peddled what every politician wanted to hear: play now, pay later, much later, on somebody else's watch.
Now, it's much later, and we're going to pay and pay.
ob·scur·ant·ism (b-skyrn-tzm, b-, bsky-rn-)
n.
1. The principles or practice of obscurants.
2. A policy of withholding information from the public.
3.
a. A style in art and literature characterized by deliberate vagueness or obliqueness.
b. An example or instance of this style.
ob·scurant·ist n.
The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2003. Published by Houghton Mifflin Company. All rights reserved.
Nope, simply the point that JMK, a childless gay bon vivant, had a psychological world view tending toward live for today, live for myself, the hell with others, and especially the hell with future generations.
Is this so hard for you to fathom?
It’s just a shame he was able to peddle his BS to politicians, eager for a cornucopian solution, where today’s deficits will always be repaid on somebody else’s watch long in the future.
The future is now, and the bill must be paid.
I fathom that you once again prove you don't know of what you speak.
Here is a for instance.
Keynes worked for the British Treasury during WWI. He was an advisor at the Versailles Peace Conference. Three days before the treaty was signed, he released a book, The Economic Consequences of the Peace. He presciently saw the treaty as a settlement of political grudges that ignored the problem of restarting the European economy.
Keynes was the first to point out the problems and recommend a revision. It took some personal bravery to publicly criticize the government he served. He was concerned about the future of Europe and offered solutions.
So please, stop showing your ass.
So what does that have to do with his ultimate legacy, the multigenerational slow-acting poison of deficit spending by design?
Only in your dreams.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.