Donnerstag, August 04, 2011

The End of Keynes...

This pretty much says it all.

Fundamentally, if you actually go back and read what Keynes said, it's all about jobs and incomes: without improvements in either, the economy will tank. It really is that simple. No amount of redistribution can cover up a jobless recovery and stagnating wages.

While some may call for the end of Keynesian meddling with the economy, this would be too fundamentally wrong, since Keynes was right.

It's his followers that have royally screwed things up.


Because Keynes wanted the government to intervene in recessions in order to give workers both jobs and wages to get consumer spending back up. You can do that very well by cutting taxes for businesses and private persons so that they have more money to spend and invest; by making it easy to hire (and fire!) workers; by having the government go out and buy services directly to build and renew. It's a very simple solution to kick-starting growth and getting the economy back up to speed, and if done right - by putting expiration dates into the measures and having the decency to ensure that people's money isn't wasted - it works. It may not jump-start an economy in a depression, but it does prevent more serious collapses.

Of course, modern-day government interventions do anything but work. The TARP money was a boondoggle without end, generating virtually no jobs by enriching those who lobby well and government cronies, and the the pork - aka entitlements - has replaced any reasonable semblance of effective and productive government spending to counter the effects of a recession.

Obama and Bernanke have flogged the dead horse that is Keynes to the point where even the MSM can recognize that it is fruitless to continue to throw money at the problem.

The problem is that we now need an anti-Keynes to remove the parasite that is government spending today. Once that is achieved, a multi-generational undertaking, perhaps Keynes can be reinstated as the excellent economist that he was and for which he should be respected and taught.

But not the parody that he represents today.

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