How Long Will It Take Keynes to Die? (Slams NYT)

Reason via RCP ^ | August 17, 2011 | Tim Cavanaugh

[MontaniSemperLiberi]

It’s been many years since I’ve 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 I’m familiar with, and the lack of a comics page. Sure there are occasions when you can’t avoid it—usually when enough people are complaining about an article or when somebody I know is in the paper—but 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 day’s 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.

[WashingtonSource]

bump

[TheSarce]

In the long run, he’s already dead.

Bravo, brilliantly done!

[expatpat]

Not only against raising taxes, but also in favor of reducing taxes, as part of the whole package attacking recession.

[expatpat]

Yes, that is brilliant.

[expatpat]

I’ve been looking, and trying to remember, but haven’t located the reference so far.

[mo]

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 they’re not doin’ it right..

Its been done before..

Harding cut the government’s budget nearly in half between 1920 and 1922. The rest of Harding’s approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third. The Federal Reserve’s 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.

http://www.firstprinciplesjournal.com/articles.aspx?article=1319&loc=r

BTW..ole Warren ALSO fixed immigration...

Mr. Harding signed into law the Emergency Quota Act[3] 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. Harding’s death.[4]

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...aren’t capable of the solution however.

BTW any takers that ‘Bammy couldn’t 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..

http://www.usnews.com/listings/worst-presidents/warren-harding

[MrB]

That’s the point right there -

Keynesianism is just a facade over the advancement of communism, the growing of State power.

[expatpat]

Here's something related, from http://inflationdata.com/inflation/Deflation_Articles/Why_Deflation_Is_Possible.asp:

what happens if one (or all) of the banks decides it isn’t 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 government’s printing presses.

[Justa]

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.

[Steely Tom]

That’s the point right there -

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?

1. I agreed with everything in it
2. I already knew a lot of it, having read pretty much everything Ayn Rand ever wrote when I was in college
3. It was hard to take, because it is so right and yet I knew, in my heart, that it would never be adopted; for some reason this made it painful to watch
4. Economics, even when explained by a great man like Milton Friedman, bores me to tears

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.

[MontaniSemperLiberi]

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.

[MrB]

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.