Skip to comments.How Long Will It Take Keynes to Die? (Slams NYT)
Posted on 08/21/2011 7:48:05 PM PDT by MontaniSemperLiberi
Its been many years since Ive read The New York Times. Like most readers, I got discouraged by the shrinking page size, the self-confident erroneousness that becomes apparent whenever America's newspaper of record covers a topic Im familiar with, and the lack of a comics page. Sure there are occasions when you cant avoid itusually when enough people are complaining about an article or when somebody I know is in the paperbut on a daily basis I follow the golden rule that life is just too short for The New York Times.
So imagine my surprise the other day when, challenged by a third-world Internet connection and enticed by an old-school six-column page width, I picked up a $2.65 copy of the International Herald Tribune, which partially reprints The New York Times, only to discover that the paper a) no longer bundles that days edition of the Beirut Daily Star (my actual purpose in buying it), b) has jettisoned the last memory of its fabled Big Apple namesake by calling itself The Global Edition of The New York Times and c) features the kind of groupthink rarely seen outside a French parochial school.
While the rest of hyperconnected, interweb-powered planet Earth has now seen Keynesian economic intervention tested in real time and discredited beyond any intelligent doubt, the Times, I quickly learned, is a walled garden where the ideas of John Maynard Keynes remain not only viable but so evidently true as to require no factual support.
(Excerpt) Read more at reason.com ...
Not only is Obama going down in 2012 but the whole stinking philosophy of his sycophants.
it probably never will die because it’s part of the fdsr-liberal fascism developed
during the early part of the 20th c for the purpose of taking control of world economies.
According to Milton Freidman, Keynes himself warned against government intervention going too far.
Keynesianism will always work perfectly in Marxist Academia.
1. The money multiplier is above about 2,
2. The money was used to stimulate the private, productive sector of the economy.
Neither of these conditions were met. The multiplier was already below 1.0, and falling, and most of the stimulus was used to save the jobs of non-productive, public employees, instead of stimulating the private sector.
Nevertheless, it is clear that Keynesian stimulation is of limited value. The fact that the money multiplier has to be 2 or above makes it useless in situations where it would be most needed.
Don’t we wish their “stinking philosophy” would die once and for all. But a majority of the population still believes, and will always believe, in the fairy-tale promise of a beneficent and government, a “multiplier” that can create wealth by spending money, sticking it to “the rich” for perceived and a “just society” achieved by taking from some to give to others. This is a failure of our educational system from top to bottom.
You’re right I think. To give up on Keynes is to give up on the coercive side of progressivism leaving only the authoritative side. Without Keynesian government as a philosophy there is only Stalinism.
“The money multiplier is above about 2...”
Interesting. Do you have a quote from him on that? It is a wonderful slam of Krugmanism.
In the long run, he’s already dead.
As long as Keynes’ “theory” gives a pseudo-scientific fig leaf of justification to the elites for what they are going to use the power of govenment for anyway, he will never die.
I was hoping this piece by Tim Cavanaugh would give his insight into why Keynesian economics is a failed system. It did not. We need to educate more people why this discredited system is poison to any economy. My advice is for my fellow Freepers to go here:
At this rate the borough of Milton Keynes could be renamed Milton Friedman by the end of the year. To ignore that story is a serious dereliction by a publication that, with its tiny and nearly-square pages, has already failed in the most serious duty of any newspaper: providing material to make paper boats.
Bravo, brilliantly done!
Yes, that is brilliant.
I’ve been looking, and trying to remember, but haven’t located the reference so far.
The RinoCracy is too purblind....but the way out is here..
Warren Harding figured it out in 1920...
Congress and the Executive Branch have lots to do.
So far theyre not doin it right..
Its been done before..
Harding cut the governments budget nearly in half between 1920 and 1922. The rest of Hardings approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third. The Federal Reserves activity, moreover, was hardly noticeable. As one economic historian puts it, Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction. 2 By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and was only 2.4 percent by 1923.
BTW..ole Warren ALSO fixed immigration...
Mr. Harding signed into law the Emergency Quota Act which sought to control immigration following World War I and preserve the distinctive American culture by ensuring the majority of immigrants came from the historically compatible cultures of Northern Europe. This law aimed to bring wages of hard working Americans under control by limiting immigration to 3% of the 1910 census. It was followed on by a similar act in 1924, after Mr. Hardings death.
A Warren Harding prescription...if filled ...would ignite the afterburners on the US job machine and the economy. However DC would have to yield on a tremendous amount of power. Our job as We the People...is to persuade them of the utility ..shall we say..of doing so. In all probability the same minds that made the mess...arent capable of the solution however.
BTW any takers that Bammy couldnt even tell you that Warren Harding was one of his predecessors in office?
Even more telling about what our betters in the RinoCracy think of a Constitutional President..
That’s the point right there -
Keynesianism is just a facade over the advancement of communism, the growing of State power.
what happens if one (or all) of the banks decides it isnt prudent to loan out the money and they prefer to increase their reserves instead? In that case, the money multiplier falls. In the following chart we can see that the M1 money multiplier has actually fallen steadily from just under 3x in 1990 to 1.5x in 2008 (in contrast to the velocity of money which rose). But in 2008 the money multiplier plummeted to under 1x. What does that mean? Any kid can tell you, if you multiply by 1 you get the same number, no multiplication has happened.
But if you multiply by less than one, you end up with less than you started with! In other words, every dollar the government is pumping into the economy is ending up in the banks and going nowhere! It is not increasing the money supply, it is not multiplying, it is not creating inflation. It is going to boost the balance sheets of the banks.
In 2002, at about the same time as Bernanke was making his famous helicopter speech, Robert Prechter published a book entitled Conquer the Crash in which he made this exact argument. That when the tide turns there is nothing the government can do. The combined forces of the velocity of money and the money multiplier are stronger than the governments printing presses.
Keynesian economics is the engine which has powered crony-federalism for the last 80 years.
It provides liberals the tools of plunder, political power and personal enrichment. They will never willingly reliquish it.
Keynesianism is just a facade over the advancement of communism, the growing of State power.
I watched the wonderful video of Milton Friedman linked in post #5 (above) and saw, to my amazement, that he made virtually the exact same statement that I made, that the theories of Keynes have been used to justify what governments want to do anyway, which is grow their power and suck in more money.
You have to take my word for it that I never watched Free to Choose before. I remember when it came out, back in the '80's; a few friends told me I should watch it, that I'd love it. I did watch a few minutes of one of the episodes, but I couldn't take it for long. Why?
Dr. Friedman asks us to believe that Keynes was against the uses to which his theory was put. Due to my great admiration for him, I will take Dr. Friedman's statement at face value; he, apparantly, knew Keynes well enough to be able to make such a statement, and I'm sure he is an honest man. However, I find this just a little hard to take. It's like being told that General Mikhail Timofeyevich Kalashnikov was really bugged by all the nasty things that were done with the rifle that bears his initials.
I’m in complete agreement. Government engineering of the economy, Republican and Democrat, is what’s holding us back. They need to stop trying to help us and get their own house in order.
The econ guy that ISN’T boring to read is Thomas Sowell.
The only criticism I would have of his works is that he is repetitive. But sometimes that is needed to drive a point home.