Posted on 03/01/2009 7:24:14 AM PST by rellimpank
Fortuitously, I recently stumbled on a copy of Henry Hazlitt's "The Failure of the 'New Economics,' " 1959, reprinted 1973.
The "New Economics" referred to by the esteemed Mr. Hazlitt -- who replaced H.L. Mencken as editor of The American Mercury in 1933 and joined The New York Times in 1934, writing financial and economic editorials there and later a bylined weekly financial column well into the 1960s -- is Keynesianism, the economic doctrines of the Briton John Maynard Keynes which are still widely taught in American college economics courses.
The top blurb on the back dust jacket panel caught my eye:
"A great book, the best and most thorough exercise in economic demolition since Boehm-Bawerk exploded Marx's labor theory of value," wrote my late friend Murray Rothbard, in the National Review. "It is no exaggeration to say that this is by far the best book on economics published since Mises' great 'Human Action' ten years ago ... It will be read, and it will destroy the Keynesian system."
Writing in the Christian Science Monitor, Ludwig von Mises himself said of this book "Hazlitt has entirely demolished the Keynesian misconceptions."
In brief, Keynesianism -- as set forth by Keynes 73 years ago in his "General Theory of Employment, Interest and Money" -- holds that the twin answers to unemployment and economic downturns are massive government deficit spending and "cheap money" -- the artificial driving down of interest rates to "free up more credit."
(Excerpt) Read more at lvrj.com ...
But why are Keynes' thoroughly debunked notions still in vogue? ... Imagine any of our egotistical and money- and power-hungry members of Congress or chief executives (of either party) today announcing, "Gee, this economic downturn sure is a misery. Too bad there's nothing the central government can do but to slash spending till our budget is in surplus so Washington is no longer crowding out private borrowers, meantime putting us back on the silver standard and shutting down the Federal Reserve. So all you lobbyists here to plead for special favors just might as well go home. Store's closed." ... What? Give up the greatest excuse since Hitler and Tojo for enacting every pork barrel spending spree they can imagine? Are you crazy?!
It's that simple. The typical power-mad, narcissistic, economically-illiterate democrat throwbacks are working hard to punish prudency and achievement, enslave entire classes of Americans and put at least two generations of our descendants hopelessly in hock.
Just google "bush tax cuts 2001 keynesian" and see for yourself.
1. Bush: Raising Keynes
"For proof that Keynes truly reigns supreme, all you had to do last week was watch President George W. Bush hawking his tax cut as a cure for the global economic slowdown."
http://www.washingtonpost.com/ac2/wp-dyn/A59814-2001Aug24?language=printer
2. The Difference Between Keynesian Stimulus And Supply Side Tax Cuts
Although both Ronald Reagan and George W. Bush proposed tax plans which cut marginal income tax rates across the board, the philosophy underlying them is different. While the Reagan plan was based on supply-side economics, the Bush plan owes much more to Keynesianism.
http://www.ncpa.org/sub/dpd/?Article_ID=8662&page=article
3. The Keynesian Remedy Is Confidence
"For proof that Keynes reigns supreme, all you have to do is watch George W. Bush hawking his tax cut as a cure for the global economic slowdown. "
http://www.iht.com/articles/2001/08/27/edignatius....php
It goes on and on. I remember complaining at the time about it. But back then it was all rah-rah Bush all the time. Well, the chickens have come home to roost.
ping
Excellent post.
Even FReepers run from Ron Paul’s conservative proposals, so is it any wonder the general populace isn’t raising much fuss?
Thanks for the ping.
Sad times.
***despite the fact that Mr. Hazlitt, way back in 1959, demonstrated not only that these Keynesian remedies did not work, but that they often had precisely the opposite effect of that intended!***
That’s because Keynesian ideas are the opposite of what you should do during a recession.
Great article by Vin Suprynowicz. Thanks for posting. The anti-freedom economic parasites of the collective are a constant. They are never exterminated, only contained at times. Witness history.
In a nutshell, this is why, sans le revolution, we will NEVER stray from the dead end path of Keynesian economics.
I suggest the reason that the failed theories are once again put to use is that their failure is the goal. Said failure can be used as an excuse to do more of the same. Case in point. The first 700 billion (Bush) bailout did not work so we have a second, a third, and a follow on huge spending bill in the works. All of which will also fail, giving rise to still more of the same.
After all, if government did the right thing, government would not be necessary. Clearly, the political class cannot permit that to happen. They would be out of a job.
If you must generalize with no facts to back it up, so will I. FReepers run from Ron Paul’s nutty foreign policy ideas. As far as domestic spending goes, Paul is right on target.
The Road to Serfdom — F.A Hayek
"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
True, were it not for his terrible foreign policy, I’d be a Paul supporter. But the foreign policy is a deal breaker for me.
I can no longer afford barrels.
As I said, conservatism is dead. America has decided that the role of government is a lot larger than in the past and that its role is to run all over the globe spending and giving away money that it has borrowed and must be repaid by the taxpayers at gunpoint.
That's okay, join ACORN and get one for free.
Paul's economic views are great -- best I've heard out of D.C.; if only his foreign policy were more to my liking.
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