Once again, John Stossel wrote an article imitating several of mine. (To be fair, I also imitated one of his as well.) What is interesting is, not only did he attack the silliness of the bailout, not only did he say it would do nothing -- many pundits have said that -- what makes it  interesting is that he imitates me also in placing the blame squarely on the Keynesian economists:

Does $819 billion sound like too much? Au contraire. It may not be enough. Ask Paul Krugman and the other Keynesians. The danger, they say, lies in spending too little.

And:

It's perfectly clear that the recession is a license for politicians to do what they've wanted to do all along. All the usual checks on extravagance, weak as they are, have been washed away. Budgets? We'll worry about that later. Inflation? We'll worry about that later. After all, Keynes said: "In the long run we are all dead".

Keynes, at any rate, is dead, but we're stuck with his legacy of profligate, burdensome government. And now we are about to stick our children and grandchildren with even more -- intrusive government, more debt, higher taxes and price inflation.

I have been pretty forthright in my many criticisms of Keynes. Not only did I attack his protectionist absurdities in "Fear of Trade","The Limits of Econometrics" and "I Should Not Watch Financial News", I also pointed out the Keynesian roots of this bailout. In my post "CNN's Keynesian Nonsense" I wrote:

And that was where CNN showed their incredibly bizarre Keynesian take on things. True to their liberal, "consumerist" theories, they saw only those who spent their refund as "stimulating the economy", according to their take either saving or discharging debts would have no economic impact. Of course, this is not unique to CNN, this sort of absurdity is at the basis of those silly "stimulus checks" we received, and seems to motivate a lot of economic thinking in government circles. However, I would have thought that a serious news channel (which CNN pretends to be) would have at least one opinion other than the doctrinaire government position that consumer spending alone (along with deficit spending by the government) stimulates the economy.

And in "The Real Reason for the Bailout" I wrote:

Many have argued that the bailout is not focused on particular trouble spots in the economy, or that it is mostly pork, or even that the money won't be disbursed until too late. However, that misses the point of the bailout. Congress may really believe the bailout is intended to work as a stimulus through the money spent, but I have a feeling the motive of the monetarist and Keynesian policy wonks who developed it is quite different. Either they are die hard Keynesians and think we need more deficit spending to cure unemployment and economic sluggishness, regardless of where the money is spent, or they are monetarists who understand that the $850 billion in inflation it will create will buoy the economy for a few months or years and push the collapse down the road until after the next election. In either case, I doubt they care HOW the money is spent, just that the government spend the money, and do so through borrowing covered by open market operations, that is, inflation.

And in "Critique of Krauthammer", I wrote:

We cannot put off payment indefinitely*. The thought of economists, at least those who recognize that monetary inflation is harmful (as opposed to brainless Keynesian devotees who believe that money supply tinkering can somehow make everyone rich indefinitely), hope that while they inflate, eventually economic growth will catch up with their inflation and wipe out the worst of the consequences, but the truth is that will never happen. Even if we were to suddenly experience massive growth, it would not wipe out our inflationary past, as the monetarists would take that as a sign for an even greater monetary expansion, while the politicians would revel in the increased revenue and bloat spending to an equal degree, boosting borrowing and the subsequent inflation. So in boom times inflation keeps pace with growth, while in bad times it grows even faster as we try to avoid facing the inevitable crash. So there really is no end to all this inflation**, at least none until the money supply becomes so bloated we are forced to face the music, as we did during the Carter years, the Great Depression, the dot com crash, and a few other lesser and greater economic crises.

And in "Carter or Clinton?", about Obama's future plans, I speculated:

Do not forget that Keynesian dogma suggests deficit spending and monetary inflation as a cure to economic stagnation, and Obama is nothing if not over educated in liberal governmental dogma. So it is possible that he will follow the FDR path, and try to "cure" the economy by a combination of inflation, "investment" and regulation. Conservative pundits may realize such meddling will do more harm than good, but that ignores the fact that most liberals still think FDR got us out of the Depression (and even ended starvation!), so many think the way out of a recession is "stimulus" and meddling**.

(The same, or related, topics were also addressed earlier in "Spend for the Fatherland, Citizen!", "The Theory That Wouldn't Die","People Are Not Idiots","Bizarre Distinction", "Well, It Was Bound to Happen...", "Are You Serious?","Making the Best of a Bad Situation" and "Spread the Wealth Around", but I will spare you those quotes, as I think my point is clear.)

The only problem I have with the essay is that Stossel failed to note the other gorup to blame. Conservatives, looking for an alternative to the Keynesians often trun to the monetarists. However, much as the Republicans often agree with Demcorats on big government and just dicker over the optimal size, monetarists have no problem with "managed" fiat currency or government inflation of the money supply and manipulation of interest rates, they differ only from Keynesians in the reason for inflation ("full employment" vs. "adequate purchasing power" or "economic growth") and the rate of growth.

We need to move away from the whole idiocy of "managed" currency, and from calling simple paper backed by nothing "currency" at all. Until we revert to a money backed by some sort of commodity, the government will meddle with the currency, and will inevitably bring about crises such as we now see around us. It may bring it fast, as the Keynesian plan will, or slowly as the Monetarist plan would, but the boom/bust cycle is inevitable so long as currency is nothing more than Monopoly money printed by the government.

POSTSCRIPT

Rather than explain why I promote commodity currency, I would suggest readers read my "Monetary Issues Made Simple Part I" and "Monetary Issues Made Simple Part II". They do not cover all the topics yet, but do a fair job. Other than that, I would also recommend "The Limits of Technocracy" and "The Limits of Econometrics" as good refutations of the idea that government mangement is superior to a "chaotic" economy.