Free Republic

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....

Until we entered the Great Recession, most economists regarded Keynesian economics as a relic of the past. You could still find it discussed in some introductory textbooks. But, as University of Chicago economist John Cochrane points out, it wasn’t on the syllabus in any of the leading graduate schools. Then came the most serious downturn since the Great Depression and something living economists had never seen before: interest rates that were near zero and in some cases negative. Keynes himself speculated that the economy could become stuck in a liquidity trap – where monetary policy is ineffective and only fiscal...

Word comes that Barack Obama's budget will, not surprisingly, call for ending the sequester spending limits now in effect. That's not surprising. White House aides proposed the sequester, but Obama thought it wouldn't go into effect because Republicans couldn't accept its sharp limits on defense spending. But with voters recoiling against foreign military involvement, they could and did. At the time, Keynesian economists predicted that the sequester -- "austerity" -- would squelch economic growth. And they predicted that Republicans' failure to continue extending unemployment benefits beyond 26 weeks would result in mass misery. The Keynesian predictions have proven unfounded. The...

The economist offering this “solution” has been feted by the Obama White House economic staff, the International Monetary Fund, and by many of the people running world economies today. His ideas are definitely “in play.” Thomas Piketty, the forty-two year old French economist whose book, Capital in the Twenty-first Century, became an overnight sensation and unexpected bestseller, is being hailed as the new Keynes, an economic thinker who can lead us out of our current economic malaise, just as Keynes is alleged by his followers to have lead us out of the Great Depression. Keynes’s keynote book, The General Theory,...

<p>It’s sometimes difficult to make fun of Keynesian economics. But this isn’t because Keynesian theory is airtight.</p> <p>It’s easy, after all, to mock a school of thought that is predicated on the notion that you can make yourself richer by taking money from your right pocket and putting it in your left pocket.</p>

Obama’s top economic advisors (yes. . . He actually has a couple of those lying around the White House) did some common-core style math, and have calculated that the [partial] government shutdown earlier this month will end up costing the economy over 120,000 private sector jobs. Who’d have thought closing down a DC memorial to WWII vets could cause so much economic havoc? Our Campaigner-in-Chief’s Council of Economic Advisors announced that the [partial] government shutdown slimdown will result in a 0.25 percentage point reduction in GDP, and the loss of roughly 120,000 private sector jobs for the month of October....

President Barack Obama demands more stimulus spending to avoid the "fiscal cliff." Obama increased the national debt $6 trillion to $16 trillion. Yet the Democrats' 'cure for what ails ya' is even more spending. Obama demands around $75 billion in new spending to stimulate the economy in 2013. "Keynesian Economics" is the insane belief that the economy can be stimulated by government spending. It provides the excuse to depart from common sense that allows politicians to ignore the alarm bells. It is ludicrous mainly because our government doesn't have any money to spend. If the government had a surplus saved...

President Obama hit the road this week to build national support for increasing taxes on wealthy Americans. On Monday the president addressed autoworkers in Redford, Mich., outlining his budget proposal and explaining why higher tax rates were necessary at this critical juncture. "Our economic success has never come from the top down," Obama said. "It comes from the middle out; it comes from the bottom up." Raising taxes on the top 2% of U.S. households has been a controversial topic as the "fiscal cliff" negotiations drag on in Washington. The "cliff" refers to the billions of dollars in spending cuts...

On 2012-08-03 Paul Krugman wrote an Op-Ed piece in the New York Times entitled “Debt, Depression, DeMarco”, excoriating the “the scorched-earth opposition of Republicans, who have done everything they can to get in ‘Obamas’ way — and who now, having blocked the president’s policies, hope to win the White House by claiming that his policies have failed.” Interesting! Perhaps instead of blaming Bush, the Republicans, conservative thinkers, the Eurozone, a naturally non-responsive economy, sun spots, The Coming Of Kohoutek and the Mayan calendar, Mr. Krugman would be looking inwardly because maybe, just maybe, the policies he and other leftists promote...

President Obama's statement that "the private sector is doing fine" is not just gaffe. It is a lesson in bad economics and an explanation of the failure of Obamanomics. The specific premise behind that statement is that the cause of persistent unemployment is not the weakness of the private sector but rather a decrease in employment by state and local governments. The Heritage Foundation provides the graph that refutes this on a purely factual level. It shows employment levels in the private sector versus state, local, and federal government since... --snip-- Aren't we all watching this happen in Europe right...

CAMP DAVID, Md. — Leaders of the world’s wealthiest nations opened the door Saturday to more government spending in Europe as way to revive the continent’s struggling economy, shifting away from the idea that the surest way to recovery was through strict fiscal austerity. Meeting at the Group of Eight summit at Camp David, President Obama and his fellow leaders said they were committed foremost to creating jobs and growth, a shift, at least in emphasis, from previous gatherings dominated by German efforts to reduce high government debt through drastic fiscal reform. In a joint statement, the leaders of eight...

Military Spending: The head of the House Armed Services Committee says already enacted and looming defense cuts could cost the economy a million and a half jobs. It could cost the nation much more than that. As we've written, the upcoming mandated cuts in defense spending, on top of already enacted cuts,are real cuts, not cuts in the rate of growth. They are deep cuts in the budget baseline that will impair military readiness and our ability to meet our commitments and respond to crises around the world. They will also take a toll on the nation's job picture. Rep....

Pimco’s Mohamed El-Erian might like what he sees in President Barack Obama’s $447 billion jobs package but not Marc Faber, the author of the Gloom, Boom and Doom report, who is not happy about the President’s plan. The package is “another complete failure of Keynesian economics and corrupt interventions,” Faber

"Jumping the shark" refers to TV sitcoms that have run out of ideas and resort to desperate stunts to stay on the air. Yesterday, Democrats, led by Senate Majority Leader Harry Reid and his chief deputies, Sen. Dick Durbin of Illinois and Sen. Charles Schumer of New York, showed that jumping the shark happens in politics, too. As Reuters reported, Reid and company are demanding that a new stimulus program be included in any deficit reduction agreement, including billions in new spending on highways and clean energy projects. "Get the recovery right before you get in this deficit-cutting mode, get...

House Republicans have fulfilled their campaign pledge to cut $100 billion in spending in the first year, passing a continuing resolution (CR) on February 19 cutting that much for this year from President Obama's 2011 budget, which was exactly their pledge. That involves a $61 billion cut for the rest of this year from the baseline of the CR that is now funding the government through March 4. But the liberal Democrats are stuck in that 1930s-1970s thinking, and that is why as soon as they were back in power, the Obama Administration went right back to that with its...

Throughout history the rise and fall of empires isn't slow or cyclical, as we like to think, but arrhythmic...it mostly happens very, very suddenly. America is a superpower on the edge of chaos, according to economic historian and author Niall Ferguson. U.S. debt levels, he says, and its unwillingness to address the problem, has put it in the same category as other great empires which have collapsed throughout the ages. Ferguson argues the world is changing. There's the rise of authoritarian China as a super-power; a Keynesian president leading a weakened United States; the re-emergence of democratic India as a...

Japan's budget is in a truly terrifying state.  Reading about the government's behavior reminds me of the worst accounts of compulsive spenders on the verge of personal bankruptcy--a sort of "What the hell, we're screwed anyway, so let's not think about it and maybe go to Cabo for the weekend."  The budget's structural position is what is known technically to economists as "completely hosed"; borrowing now exceeds tax revenue, and debt service costs now eat up almost half of the tax revenue the government collects.  "Unsustainable" is too weak to describe the situation; I don't know how they're doing it...

For the second time in my life, the U.S. has descended into cargo-cult Keynesianism Cargo cults were a product of WWII. The centuries-long isolation of the South Pacific's native Melanesian peoples ended with the coming of war. The islanders got along well with American GIs (far better than with the imperious and arrogant Japanese troops), who willingly shared their rations and other items. The Melanesians became used to the good life in the form of Spam, Lucky Strike cigarettes, and beer in the can -- the basic elements of true civilization. When the war ended, so did the stream of...

The Keynesians finally got their wish. The Federal Reserve plans to inject $600 billion dollars of the most caustic debt imaginable into the economy. This is the Agent Orange of monetary policies that has the potential to wreak financial havoc. In the hope of generating inflation, the central bank is going to enable deficit spending by buying treasury bonds. You read that correctly; the primary goal is to erode the value of the dollar, and we get to watch our currency and wealth literally dissolve before our eyes. Only a desperate government would consider debasing its own currency. The resulting...