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POPSSarah Shahi and the Keynesian Collapse It should be obvious to everyone but the most dedicated adherent of Keynesianism that the stimulus did not accomplish its end. The combination of outright spending by Congress, the desperate schemes to reflate the housing market, the attempt to transfuse bleeding firms with other people's money, and the creation of trillions in artificial money, has not done a thing to lift the US economy. Actually, the reverse has been true. All these efforts have prevented the adjustment of economic forces to the postboom world ...
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POPSKeynesianism’s Systemic Failure
Post-crisis stimulus stimulated little but insupportable government debt — and now inflation. It was joined by a downward manipulation of interest rates that has promoted what Austrian economists called “mal-investment,” plus asset inflation. The good news is that fettered capitalism has made the world a good deal richer since then, and thus arguably more able to withstand policy incompetence. The bad news that the tax-and-spend interventionist state has grown in parasitical lockstep, if not even faster, thus both hobbling progress and mortgaging people’s future via increasingly unsustainable health and welfare commitments. Few would dare to question the validity of a welfare state; but few could deny that it consistently threatens to grow out of control. The Obama administration’s solution is more of the same. It wants to up the government’s credit-card limit, which the EU now does on an ongoing basis. All this further weakens institutions and economies and promotes . . .
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POPSLITR: David Stockman, Reagan's economist: Republicans pushing the country toward bankruptcy much more @ source IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. ... Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit — the combined shortfall on our trade in goods, services and income — has reached nearly $8 trillion. That’s borrowed prosperity on an epic scale. It is also an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves ... ... Friedman’s $8 trillion error. Once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors.
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POPSFinancial reforms lacking, new crises loom The following paragraph wouldn't clip for some reason: "Easy money has negative consequences in addition to the risk of inflation and devaluing the dollar. It can also feed asset bubbles. In recent years, we have gone from one bubble and bailout to the next. Each bailout has rewarded those who acted imprudently. This has encouraged additional risky behavior, feeding the creation of new, larger bubbles."
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POPS"That Which is Unseen" ......Frédéric Bastiat Joseph Schumpeter described Bastiat nearly a century after his death as “the most brilliant economic journalist who ever lived.” Orphaned at the age of nine, Bastiat tried his hand at commerce, farming, and insurance sales. In 1825, after he inherited his grandfather’s estate, he quit working, established a discussion group, and read widely in economics. Bastiat made no original contribution to economics, if we use “contribution” the way most economists use it. That is, we cannot associate one law, theorem, or pathbreaking empirical study with his name. But in a broader sense Bastiat made a big contribution: his fresh and witty expressions of economic truths made them so understandable and compelling that the truths became hard to ignore. Atlas Network http://twitter.com/atlasnetwork/
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POPSA Crisis of Legitimacy? A strategy of rationality is applied to the Keynesian Economic beliefs, whereby the cobwebs of fallacy are cleared to reveal his circular logic. *** A company is superior to a Corporation *** @conradkbarwa discovers the flawed legitimacy http://sfreporter.com/stories/born_poor/5339/all/ A Review of Keynesian Theory Keynesian theory is central to understanding the Great Depression. www.huppi.com/kangaroo/Keynesianism.htm For decades after the Great Depression, Keynesian thought dominated the economics profession. Then, within a decade and a half, it collapsed completely: http://www.evangelsociety.org/sherk/keynespf.html Keynes and the Classics http://en.wikipedia.org/wiki/Keynesian_economics The Engines of Value are Human Beings; Thank You, Peter Drucker!
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POPSWeaponized Keynesianism GOP only believes deficit spending can create jobs when it goes toward airplanes that will never be used in combat
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POPSThe Fallacy That Government Creates Jobs The theory of government-instigated job creation overlooks the loss of resources available to the productive sector of the economy. Frederic Bastiat, the great French economist is well known for many reasons, including his explanation of the "seen" and the "unseen." If the government decides to build a "Bridge to Nowhere," it is very easy to see the workers who are employed on that project. This is the "seen." But what is less obvious is that the resources to build that bridge are taken from the private sector and thus are no longer available for other uses. This is the "unseen." So-called stimulus packages have little bang for the buck. Harvard Professor Greg Mankiw filled in the blanks and calculated that each new job (assuming they actually materialize) will cost $280,000. In reality, the cost of each government job should reflect how that $280,000 would have been spent more productively in the private sector.
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POPSThe Legacy of Keynes In the Keynesian framework, the largest chunk of spending is on account of consumer outlays. Therefore consumer outlays are regarded as the motor of the economy — consumption sets in motion real economic growth. But is consumption the motor of the economy? We suggest that one must make a distinction between productive and nonproductive consumption. While productive consumption is an agent of economic growth, nonproductive consumption leads to economic impoverishment.
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POPSLeft-Wing And A Prayer ~ Mark Steyn deficit fear has to take a second seat. I do think this is a time for a kind of very important dose of Keynesianism. I believe later on there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money. Look, it's not difficult. Barack the Spreader wants to spread Joe the Plumber's wealth around. In fact, every American does that for himself every day of the week, every time he swings by Joe the Butcher, Joe the Baker, Joe the Candlestick Maker, Jolene the Waitress, Jolene the New York Gubernatorial Prostitute, whatever. The question is whether 300 million Americans spreading their wealth around can do it more effectively than Barack and Barney taking it unto themselves to spread it around. I don't find that hard to answer. If you disagree - if you believe in socialist redistribution from the dynamic sector of the economy to the sclerotic, incompetent and corrupt . . .
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POPSHe can't be that liberal. Can he? I think at this point, there needs to be a focus on an immediate increase in spending and I think this is a time when deficit fear has to take a second seat. I do think this is a time for a kind of very important dose of Keynesianism. I believe later on there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money.
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