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Those familiar with the history of twentieth 20th-century economic thought know of the dominance of "Keynesian economics" following the Second World War. While John Maynard Keynes typically receives credit for transforming economics, much postwar Keynesian economics was actually developed by his interpreters and followers. Perhaps the single most important one of these followers was the Romanian born economist Abba P Lerner. Keynes's book The General Theory of Employment, Interest, and Money popularized the notion that market economies were prone to persistent unemployment. Keynes often receives credit for promoting government deficit spending as a means of combating unemployment. However, Abba Lerner...

The big political news from last week was David Brat’s upset win over Eric Cantor for Congress. Brat is an economics professor at Randolph Macon and from his research it’s clear that he has strong political views embedded in his economics. It’s perfectly fine to be a political economist, but when it leads to an obviously flawed understanding and presentation of reality then it becomes a real problem in my opinion. For instance, in his website Brat says the following: “Our national debt has skyrocketed, reaching over $17 trillion dollars. What our leaders in Washington fail to mention is...

Today, June 5th, is the anniversary of the birth of John Maynard Keynes, once upon a time the great foe of the gold standard. Today also, coincidentally, happens to be the anniversary of the date celebrated of FDR’s “taking America off the gold standard.” These events are not mere historical curios. The current presidential campaign, and underlying political climate, shows we are finally, maybe definitively, emerging from the academic economists’ anathema on the gold standard... ...Trump, the presumptive GOP presidential nominee, is on record as strongly appreciating the gold standard... ...The “interwar gold standard” in fact was a barbarous relic....

How a Soviet mole in FDR's inner circle triggered Pearl Harbor – and its dire relevancy to our conflict today. ... On December 7, 1941, 353 Japanese aircraft delivered a shocking blow .. Nearly seven years later, Harry Dexter White, a senior official in the Roosevelt Administration, appeared to testify before the House Committee on Un-American Activities . Numerous witnesses, including Whittaker Chambers and Elizabeth Bentley, had implicated White in involvement with the Communist Party and the Soviet Union. ... Harry Dexter White, a Harvard PhD and Assistant Treasury Secretary, had played a major role in creating the World Bank...

President Obama has nominated Janet Yellen to be the next Federal Reserve Chairman. We need to know what she stands for if we want to predict what the central bank will do to us next. Clearly, Yellen will continue Bernanke’s Quantitative Easing, but her papers and speeches show that she is quite different from her predecessor. … … Yellen is all central planner. She gets her ideas, not from Friedman, but from John Maynard Keynes. Keynes did not trust markets, preferring government intervention. His prescribed solution to recession and unemployment is for the government to increase spending and the central...

"There’s a brouhaha a-brewin’ over comments by Niall Ferguson at an investor conference. Ferguson suggested that because John Maynard Keynes was gay, effete, and childless he might have lacked concern for posterity. After all, Keynes famously proclaimed ”in the long run we’re all dead.” In a nigh-upon hysterical and terribly written item, Tom Kostigen of Financial Advisor says Ferguson took “gay-bashing to new heights.” He adds, “Apparently, in Ferguson’s world, if you are gay or childless, you cannot care about future generations nor society.”  Now, I don’t know exactly what Ferguson said, and I don’t trust Kostigen’s version of events either. There are few full quotes and virtually...

TWO of America’s Republican candidates – Newt Gingrich and Ron Paul – have dared to toy with the idea of bringing back the gold standard. Their remarks have in turn triggered a fusillade of indignant replies, from pundits and professional economists alike, the general theme of which is that no one fit to be America’s Commander-in-Chief can possibly have a good word to say about gold. Of all the reasons usually given for condemning the gold standard, perhaps the most common is the claim that it was to blame for the Great Depression. What responsible politician, gold’s critics ask rhetorically,...

Accumulated budget deficits of $15.2 trillion and unfunded entitlement liabilities of $117 trillion cannot dissuade Paul Krugman, New York Times columnist and Princeton University professor, from his belief that government must go many trillions more into debt immediately to rescue Barack Obama's presidency. In his latest column extolling the virtues of the late British economist John Maynard Keynes, Mr. Krugman asserts anew that the nearly $800 billion Obama stimulus of 2009 failed to produce 4 million new jobs and keep unemployment under 8 percent simply because it was too small. (He has argued $2.9 trillion of government pump-priming was the...

At Power Line, Steve Hayward spots Paul Krugman phoning in his periodic “Keynes Was Right” column, and asks: I wonder if Krugman also credits Keynes’s views on Jews, which British blogger Damian Thompson of The Telegraph brings to our attention. From Keynes’s diary: [Jews] have in them deep-rooted instincts that are antagonistic and therefore repulsive to the European, and their presence among us is a living example of the insurmountable difficulties that exist in merging race characteristics, in making cats love dogs … It is not agreeable to see civilization so under the ugly thumbs of its impure Jews who...

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." -- John Maynard Keynes, 1936 WASHINGTON -- The eclipse of Keynesian economics proceeds. When Keynes wrote "The General Theory of Employment, Interest and Money" in the mid-1930s, governments in most wealthy nations were relatively small and their debts modest. Deficit spending and pump priming were plausible responses to economic slumps. Now, huge governments are often saddled with massive debts. Standard Keynesian remedies for downturns -- spend more and tax less -- presume the willingness of bond markets to finance...

Last year the consensus opinion was that we are all Keynesians now. Virtually everyone in the commentariat believed that John Maynard Keynes’s solution for the Great Depression—heavy government spending to resuscitate the economy—was also the answer to today’s global downturn. The first cracks in the consensus appeared with the outbreak of the fiscal crisis in Greece earlier this year. Across the developed world, critics began to argue that government spending had reached the point of diminishing returns, and was producing an anemic recovery that mainly benefited special-interest groups. And the electorate listened. From Europe to the United States, as voters...

Is the recession's great irony that government spending killed Keynesianism? With economists, bankers and investors perplexed over the economy's continued funk, we cannot be blamed for looking in odd places for answers. Could it possibly be that continuously increasing spending over eight decades has left little ability for government spending to affect the economy? How could increased overall government spending have priced stimulative spending out of the market? To understand what has happened, we must look back to the 1930s. The New Deal was a concerted effort for government to take up the economy's slack. In 1930, federal government spending...

In 2003, ex-sailor and then Secretary of Defense Donald Rumsfeld, said the following: As we know, there are known knowns. There are things we know we know. We also know there are known unknowns. That is to say, we know there are some things we do not know. But there are also unknown unknowns, the ones we don’t know we don’t know. Many in the mainstream press chuckled warmly upon hearing this. “What a typical, right-wing dolt!” they thought to themselves. Some said so out loud. For a brief while, it was enough to induce a laugh among our betters...

PREFACE HOW THIS BOOK CAME TO BE WRITTEN By Zygmund Dobbs In 1957 a Harvard alumni group asked this writer to initiate a study of leftist infiltration at Harvard University. Previous efforts to find a qualified Harvard alumnus for the task had proved unfruitful. This was a period when America was still in shock over scandals involving traitorous government officials in the service of the Stalinist terror apparatus. Disloyal Ivy leaguers had used the wealth and resources of the United States to undermine their own country. Incredibly, at the same time, they were able to betray over 600 million people...

Conservatives have correctly declared President Obama’s $787 billion “stimulus” a flop. In a January report, White House economists predicted the bill would create (not merely save) 3.3 million jobs. Since then, 2.8 million jobs have been lost, pushing unemployment toward 10 percent. Yet few have explained correctly why the stimulus failed. By blaming the slow pace of stimulus spending (even though it’s ahead of schedule), many conservatives have accepted the premise that government spending stimulates the economy. Their thinking implies that we should have spent much more by now. History proves otherwise. In 1939, after a doubling of federal spending...

Eugenics … death of the defenceless The legacy of Darwin’s cousin Galton By Russell Grigg Few ideas have done more harm to the human race in the last 120 years than those of Sir Francis Galton. He founded the evolutionary pseudo-science of eugenics. Today, ethnic cleansing, the use of abortion to eliminate ‘defective’ unborn babies, infanticide, euthanasia, and the harvesting of unborn babies for research purposes all have a common foundation in the survival-of-the-fittest theory of eugenics. So who was Galton, what is eugenics, and how has it harmed humanity?...

Arnold Schwarzenegger came into the governorship as a fervent disciple of free market economist Milton Friedman. When Friedman died in 2006, the governor declared him "one of the great thinkers and economists of the 20th century, and when I was first exposed to his powerful writings about money, free markets and individual freedom, it was like getting hit by a thunderbolt." Five years into his governorship, however, Schwarzenegger has morphed into an acolyte of Friedman's chief rival in the arcane field of macroeconomics: John Maynard Keynes, who advocated government spending to ease economic recession. As the New York Times obituary...

Learning From Conservative History: Main Trails . . . and Less-Traveled Paths - 01/02/09 This is part three of a symposium on contemporary conservatism hosted by ISI at Yale in November, 2008. Read part one. Read part two.By training, I am an historian. I love the discipline and believe that historical mindedness—the ability to see and understand the grounding of current institutions, issues, and events in the complex matrix of the past—this is the superior way to make sense of reality.All the same, I have been troubled for over a decade by the growing interest of American conservatives in...

I'm guessing that Paul Krugman and David Brooks don't hang out that much together. So when both turn up on the New York Times op-ed page this morning with columns calling for massive government spending, I'm assuming they came to their conclusions independently. My working hypothesis: if Krugman and Brooks agree on something this important, they must be wrong. Here's Krugman's prescription, which comes in response to news that consumer spending has dropped sharply [emphasis added throughout]: [W]hat the economy needs now is something to take the place of retrenching consumers. That means a major fiscal stimulus. And this time...

PALO ALTO, Calif.--Milton Friedman was one of the very few intellectuals with both genius and common sense. He could express himself at the highest analytical levels to his fellow economists in academic publications and still write popular books such as "Capitalism and Freedom" and "Free to Choose" that could be understood by people who knew nothing about economics. Indeed, his television series, "Free to Choose," was readily understandable even by people who don’t read books. Milton Friedman may well have been the most important economist of the 20th century, even if John Maynard Keynes was the most famous. No small...