E se lo dicono loro…

[Il capitalismo] non è un successo. Non è intelligente, non è bello, non è virtuoso, e non produce i beni necessari.

In breve, non ci piace, e stiamo cominciando a disprezzarlo. Ma quando ci chiediamo cosa mettere al suo posto restiamo estremamente perplessi.

John Maynard Keynes, principale economista del XX secolo

Pochi mercati potranno mai essere tanto competitivi quanto quelli che sono fioriti in Gran Bretagna nella prima metà del XIX secolo, quando i bambini crescevano deformi e si avviavano a una morte prematura nelle miniere e negli opifici nelle aree industriali dei Midlands occidentali.

E anche oggi esistono numerosi esempi che confermano come i mercati non abbiano alcuna tendenza a promuovere forme di eccellenza.

Non offrono alcuna resistenza alle forze che spingono l’umanità nel baratro della barbarie culturale e della perversione morale

Robert Solow, premio nobel per l’economia

L’unico risultato certo (della politica economica di Reagan basata sul libero mercato) è la ridistribuzione del reddito, della ricchezza e del potere, dai governi alle imprese private, dai lavoratori ai capitalisti e dai poveri ai ricchi.

James Tobin, premio nobel per l’economia

Il maggior problema che il nostro paese si trova ad affrontare è la creazione di due classi sociali, quelli che hanno molto e quelli che non hanno niente.

Il divario crescente tra i redditi delle persone più qualificate e di quelle meno qualificate, tra gli istruiti e gli ignoranti, è davvero un grave pericolo. Se questo divario continua ad allargarsi ci ritroveremo presto nei guai.

L’idea di avere una classe di persone che non comunica con i suoi vicini – proprio quei vicini che si assumono la responsabilità di soddisfare i suoi bisogni primari – è estremamente spiacevole e scoraggiante.

Così non si può andare avanti. Avremo una guerra civile.

La nostra società non può essere aperta e democratica se rimane divisa in due classi. Nel lungo periodo questo è veramente l’unico grave  pericolo.

Milton Friedman, premio nobel per l’economia

John Maynard Keynes

What in the heck is John Maynard Keynes doing in a self-described Republican blog?  Growing up in a fiercely Republican household, I learned quickly to equate Dr. Keynes’ name with socialism.  However, I have since learned that this is not exactly accurate.  The primary tenet of socialism is the public ownership of the “means of production,” which Keynes did not advocate.  In these times of big government and massive bailouts there are important distinctions to be drawn. 

Animal Spirits, published last year, coincidentally around the time of the financial system’s collapse, expounded on for nearly 200 pages, and I found myself disagreeing with a great deal of it.  However it did outline an important point that goes right to the heart of our capitalist system and to the role of governance. 

Keynes actually accepted Smith’s “classical theory” of the economy–private property, free markets, and the “invisible hand.” His goal was to find a way to minimize market corrections.  “Market correction” is a technical term that doesn’t really convey the depth of human misery that such disruptions can cause[1].  So he tried to find the flaw in the classical theory that would explain such disruptions.  What he found was the definition of humans as “rational actors” within the system.

Now anyone who has ever watched daytime television should realize that human beings are not always rational.  They are highly neurotic, and can be self-destructive, self-aggrandizing, lazy, immoral, shortsighted etc.  All these things are arguably quite natural; so he labeled them “animal spirits” to point out that they come from the more base instincts within our nature[2].

Humans are rational most of the time, this is probably because of our need for socialization; we tend to act in ways that benefit others as well as ourselves.  The trick is to institute rules that maintain a free, open and democratic society, while protecting society from these base instincts.  When viewed as such, it is really not much different from our criminal justice system.  The authors sum up this particular part of Keynes theory:

“Keynes’ claim about how animal spirits drive the economy brings us to the role of government.  His view of the government’s role in the economy was very much like what we are told in the parenting advice books.  On one hand, they warn us not to be too authoritarian.  The children will be superficially obedient, but when they become teenagers they will rebel.  On the other hand, these books tell us not to be too permissive.  In this case they have not been taught to set proper limits for themselves.  The advice books then tell us that appropriate child rearing involves a middle road between these extremes.  The proper role of the parent is to set limits so that the child does not overindulge her animal spirits.  But those limits should allow the child independence to learn and be creative.  The role of the parent is to create a happy home, which gives the child freedom but also protects him from his animal spirits[3].”

Clearly Keynes was not afraid of using government proactively.  This is where I think Republicans should draw the line; as far as government is concerned, a little bit goes a long ways.  Democrats tend to look to the government for all the answers; Republicans believe in using  the government only as a last resort.

When I studied Keynes at the University of Arizona in the late 70’s, what I was really taught was fiscal policy, the velocity of money and the multiplier effect.  These are the real meaty parts of the theory; the ones that academics like to chew on because they can be used to create elaborate mathematical models.  Those models tend to lend credibility to a theory.

The Keynes’ multiplier effect, boiled down, amounts to financial leverage (debt), and has been used to varying degrees by every President since Herbert Hoover.  With Keynesian fiscal policy (AKA deficit spending), investment in the economy comes from the public sector.  This “investment” can take many forms.  In a perfect world, government would be extremely careful using this powerful tool, but our process tends to be rather messy.  A key difference between the 1930’s and now is that the governments of Britain and the United States were credit worthy back then.  Poor fiscal policies by prior administrations during economic booms have led us to the brink of insolvency, and here’s the kicker, the worse offending administrations between the Roosevelt and Obama were Republicans, quite frankly it was the conservative icons Ronald Reagan and George W. Bush.  Looking at the last 30-year boom cycle, it is nearly impossible to determine what affect such policies had on the booms themselves, but it could have been considerable.  Regardless, with public debt very quickly approaching yearly GDP, what is clear is that government is not as credit worthy today as it was back then[4].

But here’s the clincher.  The bubble with the housing industry could have been avoided had the government performed better in its role as regulator (i.e. parent).  The fact that it didn’t is directly related to the fact that the protections that were in place by the late 1940’s were eroded starting in the early 1980’s.  Once the financial institutions failed, President Bush and Congress had no choice but to bail them out.  Ironically, now we have public ownership of several financial institutions and an insurance company, something that Keynes never wanted but Marx and Engle predicted! 

Finally, it is important to consider the message we have sent to Wall Street.  There is much talk about not letting it happen again.  However, just like our children, the gang that brought the system to the brink of collapse knows when we are just talking.  Without real reform, what is their motivation to change their behavior?

[2] Other economists have lists of causes for market dysfunction; however, they always seem to return, at their core, to human irrationality.  Consider such things as short-term profit taking (taking advantage of unequal information between buyer and seller), externalities (primarily environmental degradation), crime, and reflectivity (a sort of conventional wisdom that tends to cause things like irrational exuberance).  Even Smith was concerned with this part of human nature and also published “The Theory of Moral Sentiments” prior to the “Wealth of Nations.”

[3] Akerlof and Shiller, Animal Spirits, Princeton University Press, page ix (preface).

[4] Private debt started growing around the same time.  Private debt is really a bigger part of the problem, and holds the recovery back.  Given a more rational economy, lenders would not have allowed such precipitous debt accumulation.

Solem donar per fet que les grans decisions econòmiques i financeres es prenen des de l’anàlisi i l’observació de les dades micro i macroeconòmiques. No obstant això, la veritat és que més sovint del que creiem són factors psicològics i irracionals, en forma d’intuïció, por, desconfiança, fe… els quals estan darrere dels comportaments d’economistes, financers, polítics o inversors. Keynes va batejar a aquests factors com “Animal Spirits“.

En aquesta obra, Akerlof i Shiller els recuperen, amb l’avantatge que suposen més de setanta anys d’investigació sobre ciències socials, per a analitzar el paper que representen els esperits animals en la macroeconomia d’una manera que els primers keynesians no podien, i expliquen com han influït en l’actual crisi econòmica.

Així mateix, els autors donen resposta a diverses preguntes que l’actual conjuntura econòmica ens ha tornat a formular: Per què els sistemes econòmics cauen en la depressió? Per què els principals bancs influeixen en l’economia (si ho fan)? Per què hi ha persones que no troben treball? Per què estalviar per al futur és tan arbitrari? Per què els mercats immobiliaris experimenten cicles? Per què la pobresa es produeix sobretot entre les minories?.

Aquest llibre, basat en un àmbit emergent de l’economia denominat economia conductual, descriu com funciona el mercat quan les persones són realment humanes, és a dir, posseeixen esperits animals molt humans.

Un llibre, en definitiva, d’obligatòria lectura per a tot aquell que desitgi comprendre les causes més ocultes dels esdeveniments econòmics i financers mundials.

Trobareu Animal spirits: cómo influye la psicología humana en la economía al catàleg de la UB.

Adam Smith

David Ricardo

2. An economist is someone who gets rich explaining others why they are poor.

3. Economics-everything we know in a language we don’t understand.

4. In Canada there is a small radical group that refuses to speak english and no one can understand them. They are called separatists. In USA they have the same kind of group. They are called economists.

5. On the first day God created the sun – so the Devil countered and created sunburn. On the second day God created sex. In response the Devil created marriage. On the third day God created an economist. This was a tough one for the Devil, but in the end and after a lot of thought he created a second economist!

6. Value of Human Capital:

Engineers and scientists will never make as much money as business executives. Now a rigorous mathematical proof that explains why this is true:

Postulate 1: Knowledge is Power.
Postulate 2: Time is Money.

As every engineer knows,
Work
———- = Power
Time

Since Knowledge = Power, and Time =Money, we have
Work
——— = Knowledge
Money

Solving for Money, we get:
Work
———– = Money
Knowledge

Thus, as Knowledge approaches zero, Money approaches infinity regardless of the Work done.

The Less you Know, the more money you Make!

Karl Marx

These deep thoughts of colleague economists were originally collected by Hiroyuki Kawakatsu

Everything has been thought before, but the problem is to think of it again.
-Goethe

Concepts without perceptions are empty; perceptions without concepts are blind.
-Kant

Mathematics has no symbols for confused ideas.
-George Stigler

All models are wrong but some are useful.
-George Box

Far better an approximate answer to the right question, which is often vague, than an exact answer to the wrong question, which can always be made precise.
-J. Tukey

The paradox is now fully established that the utmost abstractions are the true weapons with which to control our thought of concrete fact.
-A. Whitehead

In the long-run, there’s just another short-run.
-Abba Lerner

Life can only be understood backwards, but it must be lived forwards.
-Kierkegaard

Someone once said about partisan analysts that they use economic data the way a drunkard uses a lamppost: for support rather than illumination. Or as Disraeli put it, there are three kinds of lies: lies, damn lies, and statistics.
-Paul Krugman

Theories are testable where they are least needed, and are not testable where they are most needed.
-Charles Manski

If you torture the data long enough, Nature will confess.
-Ronald Coase

There are two things you are better off not watching in the making: sausages and econometric estimates.
-Edward Leamer

Doing econometrics is like trying to learn the laws of electricity by playing the radio.
-Guy Orcutt

Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.
-Charles Goodhart

Time series regression studies give no sign of converging toward the truth.
-Phillip Cagan

Any time series regression containing more than four independent variables results in garbage
-Zvi Griliches

Forecasting is like trying to drive a car blindfolded and following directions given by a person who is looking out of the back window
-Anonymous

Keep in mind the three most important aspects of real data analysis: compromise, compromise, and compromise.
-Edward Leamer

John Maynard Keynes

A good empirical study requires three components:
1.A concise and sensible theoretical framework that is related to the questions to be asked,
2.Reasonably good data, and
3.An experiment or an event or a set of circumstances that give the data a chance to answer the questions asked. In short, the model needs to be identifiable from the data at hand.
-Zvi Griliches

Sino Siya? Guess! Secret

AND MY FAVORITE:
TEN THINGS TO DO WITH A GRADUATE ECONOMICS TEXTBOOK
1. Press pretty flowers.
2. Press pretty insects.
3. Use it as paper weight on your already overcluttered desk.
4. Leave out in obvious places to impress uninformed undergraduates.
5. Mail to the White House as an intimidation tactic.
6. Give it a walk-on part in a boring European existentialist play.
7. Just throw the damn thing away.
8. Leave out for the rain and other forces of nature to reckon with.
9. Read it (ha ha ha), and weep.
10. Get a refund from bookstore so you can buy weekend’s beer supply

Listening to the late Murray Rothbard lecture on John Maynard Keynes, I was struck by how both Barack Obama and Maynard Keynes are very similiar.

The arrogance, habitual lying, changing positions on issues on a dime, use of strawmen arguments, elitism, will to power, and ego mania describe both Keynes and Obama.

Both also share an admiration of fascism, communism and government management of the economy.

Outside of that they are great guys.

John Maynard Keynes: Hero or Villain? Part 1

John Maynard Keynes: Hero or Villain? Part 2

John Maynard Keynes: Hero or Villain? Part 3

John Maynard Keynes: Hero or Villain? Part 4

Background Articles and Videos

The Battle For The World Economy–Videos

Obama’s New New Deal: As bad as the old new deal?

Keynesian Economics Is Wrong: Bigger Gov’t Is Not Stimulus

Bork and Hayek on so-called “Intellectuals”

Hayek on Keynes

Hayek on Milton Friedman and Monetary Policy

Hayek on Socialism

Hayek Warns of “Omnipotent Elected Assembly”

John Maynard Keynes of Bloomsbury: Craufurd Goodwin

John Maynard Keynes as Policy Advisor: E. Roy Weintraub

John Maynard Keynes and Economics: Kevin Hoover

John Maynard Keynes and Hayek: Bruce Caldwell

The Political Chances of Genuine Liberalism by Ludwig von Mises

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Economists

Frederic Bastiat–The Law–Videos

Yaron Brook–Videos

Friedrich Hayek–Videos

Milton Friedman–Videos

Milton Friedman on Education–Videos

Ludwig von Mises–Videos

The Fountainhead, Atlas Shrugged and The Ideas of Ayn Rand

Murray Rothbard–Videos

Peter Schiff–Videos

Schiff, Forbers and Bloomberg Nail The Financial Crisis and Recession–Mistakes Were Made–Greed, Arrogance, Stupidity–Three Chinese Curses!

L. William Seidman on The Economic Crisis: Causes and Cures–Videos

Amity Shlaes–Videos

Julian Simon–Videos

Thomas Sowell and Conflict of Visions–Videos

Thomas E. Woods, Jr.–Videos

Banking Cartel’s Public Relations Campaign Continues:Federal Reserve Chairman Ben Bernanke On The Record

Barack Obama

Voters Beware: The Radical Rules of Saul Alinsky and Leftist Democrats

President Obama’s Cloward-Piven Strategy of Controlled Crisis Creation Crippling Capitalism–Coup D-Etat On America 

Cloward Piven Strategy–The Crisis Strategy Of Barack Obama

The Obama Depression: Lessons Learned–Deja Vu!

Second Amendment–Gun Control–The Joyce Foundation–Obama–Death By Gun Control and Political Correctness–Ft. Hood’s 9/11

Obama’s Plea for Ideas As Jobless Recovery Gets Worse–Massive Government Stimulus Spending Pump Priming Not Working–Go For FairTax, Nuclear Power and Criminal Alien Removal!

Obama’s Trick On The American People: Health Insurance Reform=Huge Hikes in Taxes and Premiums for Health Insurance and Massive Medicare Funding and Payment Reimbursement Cuts–Congressional Coercion–It’s Alive!

Rose Colored Glasses:The Economy Is Recovering–Where Are The Jobs? When Will Inflation Hit? 2012–Election Year!

The Coming Inflation and A New Money Supply Backed By Real Estate?–Free Enterprise To The Rescue?

White House Teamwork–The Chicago Way–Who Will White House Wackos Wack?–Watchdogs!

Progressive Radical Socialist Canned Criticism of American People: Danger, Profits, and Wrong Thinking

The Obama Depression Continues–Official Unemployment Hits Rate 9.8% (15,142,000 Seek Full Time Job) and Real Unemployment Rate Hits 17.0% (26,181,000 Seek Full Time Job)!

Guns and Butter–War and Peace–Victory or Defeat–Commander-in-Chief or Cheer Leader?

“We Can Reverse Climate Change”–President Barack Obama–Liar or Fool–Or Both–You Be The Judge!

Obama–Corruption Kingpin–Campaign Contributions and Support for Government Payoffs and Subsidies–Stealing From The American People To Payoff Obama’s Pals

Hype: The Obama Effect–Videos

Crime–Corruption–Organized Crime–ACORN–Taxes–Obama Connected And Trained

The Arrogance of President Obama: Hectoring Habitual Liar

Broom Budget Busting Bums: Replace The Entire Congress–Tea Party Express and Patriots–United We Stand!

Obama’s Civilian National Security Force–Youth Corp Wave–Friendly Fascism Faces–Cons–Crooks–Communists–Communities–Corps!

Obama’s Hidden Agenda and Covert Cadre of Marxists, Communists, Progressives, Radicals, Socialists–Far Left Democrats Destroying Capitalism and The American Republic

Apollo Alliance and Obama’s Green Czar Van Jones: Greens on The Outside–Reds On The Inside–Big Greens, Big Unions, Big Foundations, Big Business, Big Bucks, Big Taxes–Videos

Public Option = Government Option = Pathway to Single Payer = Single Payer = Socialized Medicine = Blue Pill = Poison Pill

Obama: First We Kill The Babies, Then We Kill The Elderly, Then We Kill The Veterans–Your Life, Your Choices–Your Time Is Up!

This Joker Is A Lost Cause: Keeping President Obama Honest on Health Care–Let’s But A Smile On That Face–Staying Alive

The American People Believe The Government Public Option Plan Is The Path To The Single Payer Government Plan–Socialized Medicine–Obama Caught Lying To The American People!

The American People Confront Obama’s Red Shirts (ACORN) and Purple Shirts (SEIU)–Bullhorns and Beatings Over Obama Care!

The Obama Depression Has Arrived: 15,000,000 to 25,000,000 Unemployed Americans–Stimulus Package and Bailouts A Failure–400,000 Leave Labor Force In July!

Obama’s Marching Orders For His Red Shirts (ACORN), Purple Shirts (SEIU) and Black Shirts (New Panther Party)–Progressive Radical Socialists

The Economic Consequences of Barack Obama’s Radical Socialist Agenda–Videos

The Bush Recession Is Over–The Obama Depression Has Begun!

Barack’s Bud Beer Bash or Bust–Do Not Confuse Me With The Facts I Have Made Up My Mind–Invincible Ignorance!

Hacker Obama (HO): We Are From The Federal Government and We Are Here To Help You–Don’t You Believe Him!–Cash For Clunkers or Invasion of Privacy???

Socialism’s Snake Oil Salesman–Barack Obama–Encountering Consumer Resistence and Voter Remorse

Obama Youth–Civilian National Security Force–National Socialism–Hitler Youth–Brownshirts– Redux?–Collectivism!

Obama’s Waterloo– Government Compulsory Single Payer Socialized Medicine!–Videos

President Obama’s Plan of Massive Deficit Spending Is Destroying The US Economy–The American People Say Stop Socialism BS Now!

Discover The Left’s Organized Crime Network–Crime Pays–Organized Crimes Pays More–Apply for Census Taker Jobs!

Chairman Obama’s Progressive Radical Socialist Health Care Bill Kills Individual Private Health Care Insurance–Join The Second American Revolution!

President Obama: A Teleprompter, A Teleprompter, My Popularity for A Teleprompter!

President Barack Obama Beats It–President Franklin Roosevelt Record–Worse Unemployment Numbers Since 1933–14,700,000 Unemployed Americans Greater than 13,000,000 in 1933!

The Obama Depression (OD) Starts July 4, 2009–30 Million Americans March To Tea Parties In Washington D.C. and Over 1,000 Cities and Towns Across America!

United States Economic Depressions–The Good, The Bad, and The Ugly–Obama’s Depression–Over 15,000,000 Americans Seek Full Time Job!

President Obama and His Keynesian Spending Cult of The Fascist Democrat Radicals–FDRs 

Obama’s Opague Oppression–Collectivist Czars Or Commissars–Terminate Tyrants Tea Parties–Join The Second American Revolution

President Obama Fires Inspector General Gerald Walpin–Teapot Scandle Slowly Simmers!

Obama Throws The American People Under The Government Motors Bus!–Ice Tea Party Time!

Obama’s Organized Crime Syndicate: ACORN, CCI, SEIU, TARP, GE, Cap and Trade?–Video Exposé

Obama Fully Supports Ending Secret Ballot For All Employees–Are Voters Next?–Employee Free Choice Act a.k.a. Card Check is Ballot Check Next?

Failing The Iranian Test–Barack “Hamlet” Obama–To Be or Not To Be President of The United States And Commander-in-Chief?

President Obama Is Driving The American People Down The Highway to Socialism and Serfdom–Stop The Bus!

CIA Old Boy Network–Walking Back The Cat–Barack Obama–Who Recruited Him and For What End?

President Obama Delays E-Verify–Shame On You Mr. President!

President Obama’s Cloward-Piven Strategy of Controlled Crisis Creation Crippling Capitalism–Coup D-Etat On America
Barack Obama America’s Puppet President Pinocchio –The Transparent Lies–Ears and Nose Are Growing? 

George Soros: Barack Obama’s Money Man and Agenda Puppeter

President Doom and Panic Obama’s Big Lie: More Government Spending Works and Tax Cuts Do Not Work

President Obama–Killer of The American Dream and Market Capitalism–Stop The Radical Socialists Before They Kill You!

A Fiscally Responsible President or The Flim-Flam Man–Never Trust A Lying Radical Socialist!

New Presidential Helicopters Modified for Conformal Fuel Tanks That Will Dispense Money!

President Obama’s Internet Attack On The American Family, Marriage and Values

Cap and Trade Carbon Dioxide Tax: Gore’s and Obama’s Revenge on The American People–Let Them Freeze and Sweat!

Al Gore 2.0 and The Coming Renewable Energy Ice Age–The Big Chill

Barrack Obama’s Kansas Values–Killing Babies in Cold Blood?

Eugenics, Planned Parenthood, Population Control, and Designer Babies–Videos

The Future of Austrian Economics

The Founding of the Federal Reserve

John Maynard Keynes: Hero or Villain? Part 1

John Maynard Keynes: Hero or Villain? Part 2

John Maynard Keynes: Hero or Villain? Part 3

John Maynard Keynes: Hero or Villain? Part 4

Murray N. Rothbard: Libertarianism

The Gold Standard Before the Civil War

America’s Two Just Wars (1 of 5) Murray N Rothbard

America’s Two Just Wars (2 of 5) Murray N Rothbard

America’s Two Just Wars (3 of 5) Murray N Rothbard

America’s Two Just Wars (4 of 5) Murray N Rothbard

America’s Two Just Wars (5 of 5) Murray N Rothbard

The Current State of World Affairs

Background Articles and Videos

Keynes, the Man

By Murray Rothbard

“…Keynes was scarcely a “revolutionary” in any real sense. He possessed the tactical wit to dress up ancient statist and inflationist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science. Keynes was thereby able to ride the tidal wave of statism and socialism, of managed and planned economies. Keynes eliminated economic theory’s ancient role as spoilsport for inflationist and statist schemes, leading a new generation of economists on to academic power and to political pelf and privilege. …”

http://www.lewrockwell.com/rothbard/rothbard208.html

Related Posts On Pronk Palisades

Economists

The Battle For The World Economy–Videos

Frederic Bastiat–The Law–Videos

Yaron Brook–Videos

Friedrich Hayek–Videos

Milton Friedman–Videos

Milton Friedman on Education–Videos

Ludwig von Mises–Videos

The Fountainhead, Atlas Shrugged and The Ideas of Ayn Rand

Murray Rothbard–Videos

Peter Schiff–Videos

Schiff, Forbers and Bloomberg Nail The Financial Crisis and Recession–Mistakes Were Made–Greed, Arrogance, Stupidity–Three Chinese Curses!

L. William Seidman on The Economic Crisis: Causes and Cures–Videos

Amity Shlaes–Videos

Julian Simon–Videos

Thomas Sowell and Conflict of Visions–Videos

Thomas E. Woods, Jr.–Videos

Banking Cartel’s Public Relations Campaign Continues:Federal Reserve Chairman Ben Bernanke On The Record

“Those who do not learn from history are doomed to repeat it.”

~George Santayana

“…CONCLUSION:
THE LESSONS OF MR. OBAMA’S RECORD

Mr. Obama met the challenge of the Obama Depression by acting quickly and decisively, indeed almost continuously throughout his term of office, putting into effect  “the greatest program of offense and defense” against depression ever attempted in America. Bravely he used every modern economic “tool,”  every device of progressive and “enlightened” economics, every facet of government planning, to combat the depression. For the first time, laissez-faire was boldly thrown overboard and every government weapon thrown into the breach. America had awakened, and was now ready to use the State to the hilt, unhampered by by the supposed shibboleths of laissez-faire. President Obama was a bold and audacious leader in this awakening. By every “progressive” tenet of our day he should have ended his term a conquering hero; instead he left America in utter and complete ruin: a ruin unprecedented in length and intensity.

What was the trouble? Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. In contrast to the myth of laissez-faire, we have shown in this book how government intervention generated the unsound boom of 2002-2007, and how Obama’s new departure aggravated the Obama Depression by massive measures of interference. The guilt for the Obama Depression must, at long last, be lifted from the shoulders of the free market economy, and placed where it properly belongs at the doors of politicians, bureaucrats, and the mass of “enlightened” economists. And in any other depression, past or future, the story will be same.”

~Murray Rothbard, America’s Obama Depression

President Obama’s economic policies repeat those of President Herbert Hoover, who the late economist Murray Rothbard was writing about. Just replace Obama with Hoover, Obama Depression with Great Depression, and 2002 to 2007 with 1920’s and you have the original quote. I am sure Murray would be laughing.

“The wavelike movement effecting the economic system, the recurrence of periods of boom which are followed by periods of depression is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion.”

~Ludwig von Mises

Economics and Moral Courage

Why You’ve Never Heard of the Great Depression of 1920

Why the Meltdown Should Have Surprised No One

Keynesian Economics: The Beast That Won’t Die

The Future of Austrian Economics

The Current State of World Affairs

John Maynard Keynes: Hero or Villain? Part 1

John Maynard Keynes: Hero or Villain? Part 2

John Maynard Keynes: Hero or Villain? Part 3

John Maynard Keynes: Hero or Villain? Part 4

Austrian Theory of the Trade Cycle

The Life and Work of Ludwig von Mises

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Economists

The Battle For The World Economy–Videos

Frederic Bastiat–The Law–Videos

Yaron Brook–Videos

Friedrich Hayek–Videos

Milton Friedman–Videos

Milton Friedman on Education–Videos

Ludwig von Mises–Videos

The Fountainhead, Atlas Shrugged and The Ideas of Ayn Rand

Peter Schiff–Videos

Schiff, Forbers and Bloomberg Nail The Financial Crisis and Recession–Mistakes Were Made–Greed, Arrogance, Stupidity–Three Chinese Curses!

L. William Seidman on The Economic Crisis: Causes and Cures–Videos

Amity Shlaes–Videos

Julian Simon–Videos

Thomas Sowell and Conflict of Visions–Videos

Thomas E. Woods, Jr.–Videos

Banking Cartel’s Public Relations Campaign Continues:Federal Reserve Chairman Ben Bernanke On The Record

Dave Prychitko at The Economic Way of Thinking has devised a expedient way to spend the stimulus money and avoid the heavy transaction costs associated with any Keynesian-style economic revival. He also manages to point out some of the absurd aspects of the stimulus along the way:

By lottery, give away one million dollars to one million U.S. citizens. There’s around 300 million of us.  It will likely be considered less fair than the first-best proposal (“Why should the money go to those who already have jobs?”), but so be it. Here, the chances of winning are lower — 300 to 1 — but still remarkably better than a state lottery ticket.

If Keynes is correct, it doesn’t matter to whom the money goes, as long as it is spent. My plan is better:  think of the cost savings compared to the present plan of the administration.  No rent-seeking problems, no bureaucratic waste to oversee spending projects, no delays in how to allocate the proceeds.

I think I’m joking here — I’m against aggregate demand management in any form, I don’t think it works to improve things, and in fact on net it is negative.  But if the government is going to spend a trillion bucks to stimulate the economy, my proposal is less costly and would put cash immediately into the hands of a million citizens, citizens who spend their own money better than politicians and bureaucrats.

A year after Barack Obama’s historic election, one of his most contentious programs has been the $700 billion stimulus package. Here’s a clip of Lewis Black explaining John Maynard Keynes’ theory of how public works projects can stimulate the economy in his own inimitable (and be warned, very foul-mouthed way):

Now, just in case you’re thinking “that’s just crazy comedian talk and has no basis in proper economics” here’s the view of Keynes himself from ”The General Theory of Employment, Interest and Money”:

“If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.” (p. 129)

So while Barack Obama may not have been thrilled about having to spend such a huge amount of money getting the American economy going and saddling the American taxpayer with such a large debt (yes, I said it), is was absolutely the correct thing to do. In this instance, to compromise the spending aspects of the package to appease Republicans (the people who, to a large extent, created this mess) in the name of bipartisanship could have led to the Great Recession becoming the second Great Depression and may have left future generations with an even more unmanageable National Debt. The world is now in the thankful state of seeing a light at the end of the tunnel, just over a year after we faced economic catastrophe, as the recession ends (at least technically) in many countries and hopefully we can get back to job creation in the new year…

The unemployment numbers came in today and they are bad. 10.2% of Americans are looking for work. What that number doesn’t cover is the sheer number of Americans who have given up on job hunting and have moved back home.  This is the highest rate of unemployment since the grim years of the Reagan administration. We are extending unemployment benefits for the needy and we had to fight tooth and nail to get the Republicans on board with that.

All I have to say about this is that Paul Krugman warned them. He said the stimulus was too small. From his July 2nd, 2009 article:

Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole.

And the deeper the hole gets, the harder it will be to dig ourselves out. The job figures weren’t the only bad news in Thursday’s report, which also showed wages stalling and possibly on the verge of outright decline. That’s a recipe for a descent into Japanese-style deflation, which is very difficult to reverse. Lost decade, anyone?

And, then:

So what do we have to counter this scary prospect? We have the Obama stimulus plan, which aims to create 3 ½ million jobs by late next year. That’s much better than nothing, but it’s not remotely enough. And there doesn’t seem to be much else going on. Do you remember the administration’s plan to sharply reduce the rate of foreclosures, or its plan to get the banks lending again by taking toxic assets off their balance sheets? Neither do I.

All of this is depressingly familiar to anyone who has studied economic policy in the 1930s. Once again a Democratic president has pushed through job-creation policies that will mitigate the slump but aren’t aggressive enough to produce a full recovery. Once again much of the stimulus at the federal level is being undone by budget retrenchment at the state and local level.

So have we failed to learn from history, and are we, therefore, doomed to repeat it? Not necessarily — but it’s up to the president and his economic team to ensure that things are different this time. President Obama and his officials need to ramp up their efforts, starting with a plan to make the stimulus bigger.

Bloomberg from the White House today:

The president made his remarks after signing into law a measure extending an $8,000 tax credit for first-time homebuyers and benefits for unemployed workers. It also provides tax refunds to money-losing companies. His spokesman said the administration expects the jobless rate will continue to rise before coming down again.

“My economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and businesses to make buildings more energy efficient,” additional tax cuts, and more steps to ease the flow of credit to small business and promote exports, he said.

So, “additional investments” – yes, that’s exactly what we need. Krugman talks about this today as well:

Why not a WPA?

A question I’m occasionally asked at public events is, why aren’t we creating jobs with a WPA-type program? It’s a very good question.

As it is, job-creation efforts are generally indirect. Tax cuts and transfers in the hope that people will spend them; aid to state governments in the hope of averting layoffs. Even infrastructure spending is routed through private contractors.

You can make a pretty good case that just employing a lot of people directly would be a lot more cost-effective; the WPA and CCC cost surprisingly little given the number of people put to work. Think of it as the stimulus equivalent of getting the middlemen out of the student loan program.

So why aren’t we doing this? Politics, of course: government is the problem, not the solution, even when it is, you know, the solution, and cheaper than running things through the private sector.

Still, it might be worth discussing whether we shouldn’t try to include an, um, public option in stimulus, too.

I will remind you of Clinton administration economist Brad DeLong’s statement on Krugman:

…If the past decade has taught me anything, it has taught me that mistakes are avoided if you follow two rules:

1. Remember that Paul Krugman is right.
2. If your analysis leads you to conclude that Paul Krugman is wrong, refer to rule #1.

This isn’t rocket science. We know how to make the economy buzz. Conservatives are loath to admit it, but even Reagan used basic Keynsian economics to create the heat of the late eighties economy – iow, deficit spending. What Reagan did though, unfortunately, funneled money upward.  What Obama needs to do is use the same techniques to funnel money downward. Just like Roosevelt did. Employed people spend money. They buy a second car. Replace their washing machine. Go to dinner. Buy school clothes. Spend more on Christmas. And that spending protects existing jobs and even creates new ones. If a new government building is being built, that’s a bunch of new customers for the local diner. That means one more waitress gets her hanky. One less person on an unemployment. And it grows from there.

Wikipedia has a general overview of Keynes’ work if you need to familiarize yourself.

Democratic policy needs to be rooted in the needs of ordinary people. Democratic presidents, in order to get re-elected, need to serve the working class. Obama has an uphill struggle here, because those people did not vote for him and working on their behalf is not second nature to him. But if we don’t want a President Huckabee in 2012, then we need to be involved in pushing the administration back to the left.

B2B Branding: Symbolism versus Substance.

By Dean Crutchfield

Brand is not marketing: It’s about who you are. The role of business is to create customers through marketing and innovation, but customers have often lost out in the relentless push to maximize shareholder value. As Neutron Jack (Welch) would tell you, “Shareholder value is a result not a strategy. Your main constituencies are your employees, products and customers.”

Whether it’s a Business-to-Business (B2B) or a Business-to-Consumer (B2C) brand, it’s all about Business-to-People (B2P). So as we reap the grim harvest of imprudent lending amidst insider dealing, bankruptcy, accusation, claim and counter claim, misconduct by big brand names and shifting customer and investor behavior has changed the perceived value exchange of B2B brands and transformed the meaning and context of trust. Look at banking; historically banks focused on acquiring, growing and protecting their clients’ assets, lending money and making profit out of the assets under management. Then at the turn of the century the value relationship between banks and clients abruptly changed: it switched to banks trading their own products at the sacrifice of their own clients and overnight the compensation model was based on upon how much money can you make by the volume of products they could sell, not the number of clients they were managing. The outcome we all know.

Trust is a crucial ingredient of all brands and their reputations. Today that contract of trust has been shattered: stocks do not have a memory recall button, but investors and customers do and that’s why fewer than half of all Americans have a favorable opinion of business today.

Compounding the brand fatigue that has besmirched many B2B brands is the belief that customer-centricity can be achieved by entering B2C’s Temple of Mammon and bedecking themselves with happy logos, pleasant typefaces, comforting language, and a library full of stock photography with smiling friendly people to lift them from their somnolence as staid corporations and market themselves as perfect, genuine, complete, crystalline and pure. The irony, of course, is that some of the best B2B brands are anything but sweet and friendly, but they are serious about who they are.

The changes wrought by the financial breakdown will reveal that our notion of trust has dramatically moved on from trust in the company to trust in the people behind the company! It’s about whom do you trust and that battle will be won and lost on the consistent delivery between word and deed.

Today, most organizations commonly refer to the meaning of share in terms of market share, profit share, revenue share, etc. What they overlook, however, is that they are also ferociously competing with other brands for share of trust.

Beauty fades with age and any B2B brand built on image has been found wanting. Tomorrow’s B2B brands need to obviate that trap and be built and driven first and foremost by their “capabilities”. These defined capabilities should dictate the products and services in their offering, the culture of the organization and finally their image to the world – not the traditional B2C way of image first.

To optimize this new era, B2B brands need to first redefine their meaning by identifying who they truly are and why they are in business. This will provide a picture of their future, their organizational style and the direction they need to take. As Jim Collins writes: “All good-to-great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality.”

The second priority is for those in a position of leadership to recognize that if their people don’t believe, they’re not coming. Therefore, what are the rock hard beliefs their people can hold onto?

Third, culture, the engine that makes the B2B brand work. According to Bain, every four years, the average company loses more than half its customers! The two determinates of value creation in business are how tight the ship is run and the closeness of the relationship with the customer; don’t forget it costs 5X more to acquire a new customer, but if you retain 5% of your customers it can increase your bottom line 25%! Retaining customers can only be achieved by a culture that has shared responsibility, share benefits and shared values. Therefore, how do you separate value from commodity?

People and business live their lives in the future not the present. Whilst many B2B brands have attempted to shift from being functionally oriented to emotionally oriented-brands, the real “leap” is in being values-centric brands: It is no longer enough for B2B brands to define themselves in terms of what they are, they must make a commitment (environmentally and socially) about who they want to be. The current mindset encases itself in the moment, forgetting the prosperity of the past and ignoring our ability to shape the future. How people see the world shapes the world.

John Maynard Keynes identified sinking confidence and pessimism as causal to sustaining and deepening economic recessions. The psychology of investors and ordinary consumers is in many respects more critical than what might be described as “objective economic conditions.” The time is now for companies to take on the responsibility of rebuilding trust and advancing the common good as an antidote to the debilitating fear that will assuredly delay a speedy economic recovery. Finance might be the brains of corporations, but brands are the heart.

This blog is very critical of Keynesian economics, due to the fact that it is wrong. However, we’re not so critical of John Maynard Keynes. Thankfully, we’re not alone in our opinions:

Keynes was a great economist. In every discipline, progress comes from people who make hypotheses, most of which turn out to be wrong, but all of which ultimately point to the right answer. Now Keynes, in The General Theory of Employment, Interest and Money, set forth a hypothesis which was a beautiful one, and it really altered the shape of economics. But it turned out that it was a wrong hypothesis. That doesn’t mean that he wasn’t a great man!

~ Milton Friedman

We’ve heard more than enough about how the Republican party needs to “rebrand.”  It’s nice to see that, by actually rebranding behind some of our nation’s founding principles–what is now called “right-wing extremism”–conservatives have the Democrats on the defensive.  Now, the Wall Street Journal opines, it’s time for Democrats to “rebrand” if they want to make any headway after their election night losses in Virginia, New Jersey, and elsewhere:

Speaker Nancy Pelosi has already forced House Democrats to walk the cap-and-tax plank, adding to the policy uncertainty that is helping to depress what ought to be a more robust recovery after a long and deep recession. The White House and its liberal allies believe government can drive prosperity. Yet the costs that cap and tax would impose—whether through Congress or via the activist EPA regulation that the Administration is pursuing—is part of the political uncertainty that is slowing the revival of risk-taking and job creation.

Democrats are imposing wage controls and continuing to embrace a phony populism against Wall Street, while the new liberal industrial policy has annexed the auto sector. The Energy Department is now the largest venture capital firm in the world and is redirecting capital that could be devoted to more productive uses than green energy gambles. Private lenders to college students are being run out of the market.

Mr. Obama campaigned on a pledge to spare 95% of Americans from tax increases, but the American middle class is slowly figuring out that it will eventually be asked—that’s the polite way of putting it—to pay for all of this. These looming bills, and not only from the $787 billion stimulus, are clouding the investment outlook.

Who just does what they’re told, Ms. Pelosi?

As I see it, the only way that the Democrats can truly reboot is to abandon their Keynesian theory that they can spend their way out of a recession by having the government pick the economic winners and losers, the free-market be damned.  Or they could quit trying to engineer an expensive takeover of the healthcare industry, crippling international environmental politics, or ill-planned stimulus spending that does not work.  But that would mean giving up control, something we all know statists don’t do unless forced to, or voted out of office.

Ah well.  As sage as the Wall Street Journal’s advice is, it will likely fall on deaf ears.

And just because she’s great, here’s Ann Althouse’s take on the recent elections!  You thought I was done writing about this, but you were wrong!:

In the WaPo, Dan Balz says:

“Neither [the Virginia nor the New Jersey] gubernatorial election amounted to a referendum on the president….”

Why not? Read… read… read… read… oh, here it is:

“White House senior adviser David Axelrod said Tuesday’s races were in no way a reflection of public opinion about the president or his agenda. ‘Whatever’s driving these voters, it wasn’t attitudes toward the president,’ he said, noting that local issues and attitudes toward the candidates on the ballots were the major influences.”

Why not? Because David Axelrod says not.

Classic.

-Mister Person

While I believe Keynesian economics to be both flawed and immoral, John Maynard Keynes gives a very chilling account of how inflation can destroy a capitalist system.

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.

Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

At The Excerpt Mill I quote  John Maynard Keynes:

In particular, it is an outstanding characteristic of the economic system in which we live that, whilst it is subject to severe fluctuations in respect of output and employment, it is not violently unstable. Indeed it seems capable of remaining in a chronic condition of sub-normal activity for a considerable period without any marked tendency either towards recovery or complete collapse. Moreover, the evidence indicates that full, or even approximately full, employment is of rare and short-lived occurrence. Fluctuations may start briskly but seem to wear themselves out before they have proceeded to great extremes, and an intermediate situation which is neither desperate nor satisfactory is our normal lot.

In his book The General Theory of Employment, Interest, and Money, written in 1936, economist John Maynard Keynes (1883-1946) stated:

[T]he actual phenomena of the economic system are coloured by certain special characteristics of the propensity to consume, the schedule of the marginal efficiency of capital and the rate of interests, about which we can safely generalise from experience, but which are not logically necessary.

In particular, it is an outstanding characteristic of the economic system in which we live that, whilst it is subject to severe fluctuations in respect of output and employment, it is not violently unstable.  Indeed it seems capable of remaining in a chronic condition of sub-normal activity for a considerable period without any marked tendency either towards recovery or complete collapse.  Moreover, the evidence indicates that full, or even approximately full, employment is of rare and short-lived occurrence.  Fluctuations may start briskly but seem to wear themselves out before they have proceeded to great extremes, and an intermediate situation which is neither desperate nor satisfactory is our normal lot…The same thing is true of prices, which, in response to an initiating cause of disturbance, seem to be able to find a level at which they can remain, for the time being, moderately stable. (Keynes, 249-250)

Sources

Keynes, John Maynard.  The General Theory of Employment, Interest, and Money.  Houghton Mifflin Harcourt, 1964.

Quoted from John Bellamy Foster and Robert W. McChesney, “Monopoly-Finnance Capital and the Paradox of Accumulaiton,” Monthly Review 61, no. 5 (Oct. 2009): 1-20.  http://search.ebscohost.com.ezproxy.sfpl.org/login.aspx?direct=true&db=f5h&AN=44371140&site=ehost-live (accessed November 2, 2009)

Suite à mon premier billet : Anniversaire d’Astérix (1) : Introduction et relecture du Domaine des dieux

Obélix et Compagnie (1976) est à mes yeux le traité d’économie le plus pédagogique jamais paru. Trois ans après que le choc pétrolier a nettement enrayé la croissance des Trente Glorieuses, Goscinny porte dans cet album son regard sur la politique économique, et y fait – probablement sans le savoir, et d’après mon interprétation personnelle – une reductio ad absurdum du keynésianisme. Le tout forme une métaphore assez pertinente de l’économie française et de ses travers.

Le choix de Jacques Chirac, interprété par le « néarque » Caius Saugrenus,  comme personnage central de l’album marque clairement le ton. « Un mécontent, c’est un pauvre qui réfléchit », disait Talleyrand : Saugrenus en prend note pour proposer à César d’occuper et d’enrichir le village gaulois pour le détourner des troubles. Occuper et enrichir – relancer l’emploi et la production – les objectifs explicites des plans de relance.

Je vous propose donc l’exercice inédit d’une lecture de cette BD au regard de la théorie du grand Keynes.

Un concept clé : le multiplicateur keynésien

Dans son principal ouvrage, la Théorie Générale (1936), Keynes défend la dépense de l’Etat comme instrument de relance de l’activité économique. Un des concepts centraux de son argumentation est le principe du multiplicateur. L’idée est simple : Saugrenus achète un menhir à 100 sesterces à Obélix, Obélix dépense 80 sesterces en sangliers (et en met 20 de côté), les chasseurs de sangliers dépensent 64 sesterces (et en mettent 16 de côté), etcetera… on remarque qu’à ce stade du processus la dépense de Saugrenus a fait monter le PIB du village de 100+80+64=244 sesterces, et ce n’est qu’un début ! Goscinny explicite le phénomène en termes d’emplois :

Première multiplication : 2 emplois créés

Deuxième multiplicateur : 4 emplois créés

Troisième étape : 8 emplois créés... etcetera !

Remarquons aussi qu’une méprise courante sur Keynes est l’assimilation de sa théorie aux grands travaux de Roosevelt, ce qui se trouve être un anachronisme de quatre années. Nombre de personnes pensent d’ailleurs qu’en l’absence de grands projets à réaliser, il n’est pas possible de mettre en place une politique de relance efficace. Or cela est sans grand rapport ! La théorie décrite par Keynes tient tout autant lorsqu’on paye des gens à creuser des trous puis à les reboucher. Le point central, c’est de créer du déficit. Le choix du menhir, produit inutile par exemple, renverse à merveille cette méprise courante.

Un effet négatif et une injustice : l’effet d’éviction

Le commerce du poisson perd des ressources au profit du menhir

Parmi les grandes critiques adressées aux plans de relance keynésiens, on trouve l’ « effet d’éviction » : le soutien apporté à quelques uns leur permet d’accéder à des ressources qui sont perdues pour d’autres, qui les auraient peut-être mieux utilisées. D’une manière générale, l’effet direct est de détourner les facteurs de production de leur utilité naturelle vers un secteur artificiellement stimulé : le chariot du marchand se transforme en chariot à menhirs, la poissonnerie perd ses ressources humaines au profit de l’industrie monolithique.

L'action de l'Etat fait le bonheur des uns au détriment des autres

Quant au caractère injuste de cette éviction, il est sans doute ressenti par les consommatrices du village, agglutinées autour du chariot du marchand ambulant, lorsqu’Obélix, arrivant les mains pleines des sesterces de Saugrenus, déclare « J’achète tout ! ». Un désagrément que subit aussi le chef Abraracourcix qui perd ses porteurs, dont le travail est désormais absorbé par la « bulle du menhir ».

Une bulle et/ou trou commercial

Une partie de la relance gauloise est absorbée par l'Egypte

La création d’une bulle, c’est-à-dire l’orientation vers un (ou plusieurs) secteur d’activité d’un niveau de ressources excessif au regard de son utilité économique, est souvent le danger principal d’une relance. Pensez que sous l’effet du plan Saugrenus, le monde antique, de la côte armoricaine à l’Egypte de Cléopâtre, se lance dans la production massive de menhirs qui ne servent à rien. Moment de la BD qui nous fait remarquer une des principales limites du multiplicateur keynésien : il alimente parfois les importations plutôt que d’accroître la production intérieure.

Ce point provoqua par exemple l’échec total du plan Mauroy au début des années 1980 et explique l’importance de la coordination des politiques de relance entre Etats.

Finalement, les finances de César sont désastreuses, si bien qu’il ordonne la fin de l’aide au menhir gaulois. La bulle éclate, et comme elle occupait nombre de travailleurs, l’économie romaine toute entière s’effondre, alors qu’on détruit la dette publique à coup d’inflation.

En vrac

Le Powerpoint antique, livré avec son diplômé Grande Ecole

Après une revue de la trame principale à la lumière de la théorie keynésienne et de ses imperfections, diverses remarques sur d’autres éléments de nature socio-économique.

• Goscinny a inventé le principe du Powerpoint™, et par la même le concept du consultant en pipologie, plus de 10 ans avant Microsoft
• Vous trouverez à la page 36 une introduction au marketing rappelant deux principes clés de cette activité : répéter et répéter encore jusque ce qu’à ça rentre, et surtout créer une angoisse sociale à ne pas posséder le produit…
• Peut-être Goscinny cherche-t-il aussi dans cet album à critiquer les économies mono-produits qui, mettant tous leurs menhirs dans le même chariot, sont fortement exposées aux variations de prix.
• Et enfin, un problème bien connu de notre beau pays : donner des aides, c’est toujours très bien ; retirer la moindre d’entre elle, et les irréductibles gaulois sont dans la rue !

Et surtout, ne pas toucher aux "acquis sociaux" !

]]> http://raymondpronk.wordpress.com/2009/10/25/rothbard-on-keynes-videos/ Sun, 25 Oct 2009 18:36:04 +0000 Raymond http://raymondpronk.wordpress.com/2009/10/25/rothbard-on-keynes-videos/

John Maynard Keynes

John Maynard Keynes: Hero or Villain? Part 1

John Maynard Keynes: Hero or Villain? Part 2

John Maynard Keynes: Hero or Villain? Part 3

John Maynard Keynes: Hero or Villain? Part 4

John Maynard Keynes and Hayek: Bruce Caldwell

Hayek on Milton Friedman and Monetary Policy

Keynesian Economics Is Wrong: Bigger Gov’t Is Not Stimulus

Background Articles and Videos

John Maynard Keynes

“…John Maynard Keynes, 1st Baron Keynes, CB (pronounced /ˈkeɪnz/) (5 June 1883 – 21 April 1946) was a British economist whose ideas have been a central influence on modern macroeconomics, both in theory and practice. He advocated interventionist government policy, by which governments would use fiscal and monetary measures to mitigate the adverse effects of business cycles, economic recessions, and depressions. His ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.

In the 1930s, Keynes spearheaded a revolution in economic thinking, overturning the older ideas of neoclassical economics that held that free markets would automatically provide full employment as long as workers were flexible in their wage demands. Following the outbreak of World War II Keynes’s ideas concerning economic policy were adopted by leading Western economies. During the 1950s and 1960s, the success of Keynesian economics was so resounding that almost all capitalist governments adopted its policy recommendations.

Keynes’s influence waned in the 1970s, partly as a result of problems that began to afflict the Anglo-American economies from the start of the decade, and partly due to critiques from Milton Friedman and other economists who were pessimistic about the ability of governments to regulate the business cycle with fiscal policy.^[1] However, the advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought. Keynesian economics has provided the theoretical underpinning for the plans of President Barack Obama, Prime Minister Gordon Brown and other global leaders to ease the recession.^[2]

In 1999, Time Magazine named Keynes one of the 100 Most Important People of the 20th Century and reported that, “His radical idea that governments should spend money they don’t have may have saved capitalism”.^[3] Keynes is widely considered the father of modern macroeconomics, and by commentators such as John Sloman, the most influential economist of the 20th century.^[4][5][6] In addition to being an economist, Keynes was also a civil servant, a patron of the arts, a director of the Bank of England, an advisor to several charitable trusts, a writer, a private investor, an art collector, and a farmer. …”

http://en.wikipedia.org/wiki/John_Maynard_Keynes

Murry Rothbard

“…Murray Newton Rothbard (March 2, 1926 – January 7, 1995) was an American intellectual, individualist anarchist,^[1] author, and economist of the Austrian School who helped define modern libertarianism and popularized a form of free-market anarchism he termed “anarcho-capitalism”.^[2][3] Building on the Austrian School’s concept of spontaneous order in markets, support for a free market in money production and condemnation of central planning,^[4] Rothbard sought to minimize coercive government control of the economy. He considered the monopoly force of government the greatest danger to liberty and the long-term wellbeing of the populace, labeling the State as nothing but a “gang of thieves writ large” – the locus of the most immoral, grasping and unscrupulous individuals in any society.^[5][6][7][8]

Rothbard concluded that virtually all services provided by monopoly governments could be provided more efficiently by the private sector (in particular, money production and coinage).^[9][10][11] He viewed many regulations and laws ostensibly promulgated for the “public interest” as self-interested power grabs by scheming government bureaucrats engaging in dangerously unfettered self-aggrandizement, as they were not subject to market disciplines which would quickly eliminate such parasitic inefficiencies if they were to occur in the competitive private sector.^[12][13][14]

He argued that taxation represents coercive theft on a grand scale, and “a compulsory monopoly of force” prohibiting the more efficient voluntary procurement of defense and judicial services from competing suppliers.^[15][6] He also considered central banking and fractional reserve banking under a monopoly fiat money system a form of state-sponsored, legalized financial fraud, antithetical to libertarian principles and ethics.^[16][17][18]

Rothbard opposed military, political, and economic interventionism in the affairs of other nations.^[19][20] Rothbard wrote over twenty books before his death in 1995. …”

http://en.wikipedia.org/wiki/Murray_Rothbard

Keynes, the Man

By Murray Rothbard

“…Keynes was scarcely a “revolutionary” in any real sense. He possessed the tactical wit to dress up ancient statist and inflationist fallacies with modern, pseudoscientific jargon, making them appear to be the latest findings of economic science. Keynes was thereby able to ride the tidal wave of statism and socialism, of managed and planned economies. Keynes eliminated economic theory’s ancient role as spoilsport for inflationist and statist schemes, leading a new generation of economists on to academic power and to political pelf and privilege. …”

http://www.lewrockwell.com/rothbard/rothbard208.html

Murray N. Rothbard: Libertarianism

The Founding of the Federal Reserve

How Abolishing the Fed Would Change Everything

Federal Reserve: Handmaiden of Tyranny

John Maynard Keynes of Bloomsbury: Craufurd Goodwin

John Maynard Keynes as Policy Advisor: E. Roy Weintraub

John Maynard Keynes and Economics: Kevin Hoover

John Maynard Keynes and Hayek: Bruce Caldwell

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The Fountainhead, Atlas Shrugged and The Ideas of Ayn Rand

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Banking Cartel’s Public Relations Campaign Continues:Federal Reserve Chairman Ben Bernanke On The Record

“We do not know what the future will bring, except that it will be different from any future we could predict.” So said John Maynard Keynes.

How true is this statement? We’re all familiar with the predictions of the futurologists who saw us all eating a pill instead of a meal and moving around in flying cars. There’s a truism; ‘Plus ca change, plus c’est la meme chose’ – please excuse my lack of accents – which translates as ‘the more things change, the more it’s the same thing’.  Perhaps things don’t change too much because we tend to like things the way they are.

Thought of the day; brought to you on the Internet which has changed The World.

Most “economic experts” you see on television wear two hats: They’re Wall Street operators, and they’re Republicans.  These twin identities reinforce each other.

Many of these people became Republicans just as Ronald Reagan was driving his party over the supply side cliff.  Economic sanity became old-fashioned.  Conservatives would never again meet a budget deficit they couldn’t close with more tax cuts.  (In 1987 the amoral persona of Gordon Gekko in Oliver Stone’s Wall Street imprinted their minds with a world view they can’t shake to this day.  Greed is always good — and they’ll justify it any way they can.)

Fast forward to 2009.  Laissez faire economic policies (often promoted by Democrats caught up in the zeitgeist) have wrecked the American economy.  We’re beginning to recover, but it will be a long time before workers have the clout to cause real inflation.  The Administration knows this.  So does the Fed.

In their heart of hearts, the Wall Street guys on CNBC know this, too.  The smart ones are currently making a killing as equities rise thanks to Obama’s Keynesian stimulus and Bernanke’s massive injections of liquidity into the “free markets”.

Why, then, are the “experts” now raising the spectre of inflation?  Because they’re doctrinaire Republicans.  They’ve never really cared about deficits.  Reagan and Bush could spend the country into oblivion as long as the goodies got handed out to the right people. 

If Barack Obama did a Vulcan mind-meld with Art Laffer and proposed a trillion-dollar  tax giveaway, you’d see Maria Bartiromo in a special on “growing our way out of the deficit”.  That’s how they roll!

So pay no attention when you hear the Wall Street gang whine about inflation.  It’s strictly a political tool to get the Republican gravy train back on the tracks.

In today’s Richmond Times Dispatch there is an interesting OP ED by Robert Samuelson.  Restarting the Job Machine addresses the concern on so many minds today:  how can we get the economy back to the point of generating jobs?   Keynesian economic policy is addressed and a brief discussion of the government spending multiplier follows.  The argument turns to the many laws and policies government enforces which actually discourage job creation.

“When the facts change, I change my mind. What do you do sir?” – John Maynard Keynes

I bought SDS before the close yesterday (10/13) after looking at one of my more reliable long term technical indicators which predicted a fairly serious iminent fall in the market. Combined with the fact that Intel (INTC) and J.P. Morgan Chase (JPM) were reporting after the close and in the morning made me want to get some protection.

Their earnings not only had high expectations, but they are also bellwether of their industry and of the overall market. Had anything not gone off perfectly in their reports, the results would most likely have been bad with a run down to at least 1030 on the S&P. I also felt that Dow 10,000 could pose strong psychological resistance in the market

That being said, I heeded the wisdom of Mr. Keynes and covered the position early in the morning after anticipating a half gap fill. In the end I only lost 1.7% (including trading fees) on a trade that could have returned at least 5% easily. I also put on additional long positions which I will get into later.

-MJB

Adam Smith, Scotland (1723-1791)
David Ricardo, England (1772-1823
Thomas Malthus, England (1766-1834)
John Stuart Mill, England (1806-1873)
Karl Marx, Germany (1818-1883)
Leon Walras, France (1834-1910)
Alfred Marshall, England (1842-1924)
Thorstein Veblen, USA (1857-1929)
John Maynard Keynes, England (1883-1946)
Irving Fisher, USA (1867-1947)

More at Federal Reserve Bank of San Francisco

The Tennessee Valley Authority was brought to life during the Great Depression and still exists today.   The TVA  is still creating jobs and bettering the environment through green buildings and using native plants as part of their landscape.  The TVA also helps minimize energy consumption.

Fear of the same economic downfall in the 1930’s is a reason Obama so quickly enacted the “American Recovery and Reinvestment Plan”.  This plan was set in place to create jobs for the short-term and stimulate economic growth for the long-term.  President Obama also wanted the United States to be seen as a competitive force once again.  Here is a link for an article at the time of the January 2009 stimulus package:

http://www.huffingtonpost.com/the-progress-report/obamas-stimulus-package_b_155279.html

As far as “more productive” government spending, I still feel strongly about the United States infrastructure.  The United States needs to be able to show other countries that they can be confident in us to move goods/products quickly and that they can build factories or businesses here.  The more goods our economy can export, the more money our businesses make.  The more goods we can import, the more consumers buy, which also gives money to our businesses.  If other countries (or our own) build more factories or businesses on American soil, the more jobs are created.

This video talks about Obama moving forward to give some money to fix America’s infrastructure:

Below is a video about America’s infrastructure.  Fast forward to 3:06 into the video to get to the point:

Keynesian policies did great until the 1970’s because of the increase of inflation and torpid businesses at the same time of the incredible increase of unemployment.  His plan had holes that were blown wide open when several important factors began to fail simultaneously.  Keynes policies failed during the 1970’s and 1980’s because several main components together created a catastrophe.  Keynes’ theory was created in a time of economic crisis.  By the 1970’s, the crisis was over and there was no firm plan for maintaining a healed economy.