Posted by
Andrews on Sunday, October 19, 2008 1:23:13 PM
The
Washington Post has surpassed any other paper in the pursuit of absurdity. not only do they blame our current problems on the free market, but their writer claims we have "forgotten" Keynes, who would have known how to solve this problem. Are they serious?
This problem is pure Keynesianism. Just as those absurd "stimulus" checks were fully in accord with Keynesian "multiplier effect" theories, so it the problem we are facing. Government manipulation of interest and "stimulating" of the economy through tax and spend boondoggles were fully Keynesian solutions. Forced lending to help boost the economy, which is at the heart of this problem, that is Keynesianism. And so it our massive bailout.
And so is the Democrat proposal of yet more spending to "get us out of this crisis"". Which is probably the point of the essay.
Now, I admit both parties have been caught up in Keynesian stupidity in recent years (those stimulus checks were Bush's idea, after all), it isn't an entirely partisan question, but, as the Democrats are more consistently Keynesian, being more dedicated to "tax and spend" policies than the Republican, any call for "Keynesian" solutions usually boils down to "those Republicans are slaves of the free market, vote Obama!"
POSTSCRIPT
I actually doubt the author was arguing for Obama, he sounds more like an academic who is upset at the success of free market theories after spending decades studying Keynes, and looking to vindicate his idol (and sadly, Paul Krugman as well). However, I think the article was published because it can be read as "Go Obama!" regardless of the intent of the author.
POSTSCRIPT II
Should any Keynesian pop by and challenge my beliefs that Keynes was a fool, I have two challenges. First, tell me if savings and investment can be different amounts or not. Keynes says both at different points in his "Theory". His entire theory rests on the idea that they
CAN be different, though early in the book he discounts that as an impossibility. So which is it? Second, have you read Henry Hazlitt's
The Failure of the "New Economics"? If so, where is he wrong?
Then again, TH doesn't seem to be a haunt of theoretical Keynesians, though many follow his theories without knowing it, so I don't know if my challenge was necessary or not.