Keynesians and fear
“The President should stop talking and acting on anything else – not the deficit, not energy, not the environment, not immigration, not implementing the health care law, not education. He should make the whole upcoming mid-term election a national referendum on putting Americans back to work, and his jobs bill. Are you for it or against it? But none of this is happening. The hawks and blue dogs are still commanding the attention. Herbert Hoover’s ghost seems to have captured the nation’s capital. We’re back to 1932 (or 1937) and the prevailing sentiment is government can’t and mustn’t do anything but aim to reduce the deficit, even though the economy is going down.”—
Robert Reich (via marco)
And Keynesians are trying to scare you, because the economy will recover. It’s already begun to in strange, profound ways - ways that involve the liquidation of failed industries and their replacement with newer, more innovative competitors. Reich and the Keynesians couldn’t stand it if their orthodox economics didn’t receive the credit for the coming recovery - a recovery that will come at the cost of so many useless retail, auto-making, home-building, and finance jobs.
First, though, we have to capitulate. We have to stop rolling over the pile of debt we’ve accumulated for decades and admit that we can’t sustain this consumption-based standard of living anymore. We have to admit that 30 years of Keynesian policy - starting with Reagan - failed. And they don’t want to do that, because it invalidates their precious expertise.
And in the mean time, let the unemployed stay unemployed? Maybe people aren’t scared because the ‘Keynesians’ are frightening them, but because they see everyone around them losing their jobs and houses and they’re afraid it’ll keep getting worse before it gets better. Maybe they’ve already lost their job and/or house and are just afraid it’ll get worse.
“There is no intrinsic contradiction between providing additional fiscal stimulus today, while the unemployment rate is high and many factories and offices are underused, and imposing fiscal restraint several years from now, when output and employment will probably be close to their potential.” -Douglas Elmendorf, the director of the Congressional Budget Office
I’m sorry but LOL @ “30 years of Keynesian policy - starting with Reagan”
Reagan’s economic policies were basically the opposite of Keynes. Keynes would never have suggested “trickle-down”. What are you smoking?
