The American Spectator's Samuel Gregg has a smart piece on why politicians and academics hoping to be hired by politicians can never quite give up on the discredited theories of John Maynard Keynes:
Keynes himself is often regarded as a rather rebellious figure... Yet despite his iconoclastic reputation, Keynes was a quintessentially establishment man. For his entire life, Keynes moved easily among the Oxbridge-Whitehall elites that dominated Britain throughout the 1920s, '30s, and '40s. Nor was Keynes himself averse to government service. Among other things, this included time as a senior Treasury official, a Bank of England director, and leadership of Britain's delegation to the 1944 Bretton Woods conference -- all of which he did while working as an active Cambridge don.
It's a pattern that contrasts with the path followed by Keynes's free-market critics such as Friedrich Hayek and Wilhelm Röpke. Generally shunned by America and Europe's political and academic insiders, they exerted influence primarily from the "outside": not least through their writings capturing the imagination of decidedly non-establishment politicians such as Britain's Margaret Thatcher and West Germany's Ludwig Erhard.
The story of Keynes's rise as the scholar shaping economic policy from "within" is more, however, than just the tale of one man's meteoric career. It also heralded the surge of an army of activist-intellectuals into the ranks of governments before, during, and after World War II. The revolution in economics pioneered by Keynes effectively accompanied and rationalized an upheaval in the composition and activities of governments.
From this standpoint, it's not hard to understand why New Dealers such as John Kenneth Galbraith were so giddy when they first read Keynes's General Theory. Confident that Keynes and his followers had given them the conceptual tools to "run" the economy, scholars like Galbraith increasingly spent their careers shifting between tenured university posts, government advisory boards, international financial institutions, and political appointments -- without, of course, spending any time whatsoever in the private sector.
In short, Keynes helped make possible the Jeffrey Sachs, Robert Reichs, Joseph Stiglitz's, and Timothy Geithners of this world. Moreover, features of post-Keynesian economics -- especially a penchant for econometrics and building abstract models that borders on physics-envy -- fueled hopes that an expert-guided state could direct economic life without necessarily embracing socialism. A type of nexus consequently developed between postwar economists seeking influence (and jobs), and governments wanting studies that conferred scientific authority upon interventionist policies.
Read it all. The manifest failure of Keynesian intervention always gets us into a discussion about "true" Keynesianism, with implications that if we were actually following the Master's commands we wouldn't be in this pickle. On that subject, Gregg has some interesting quotes from Keynes himself (some of which sound too on-the-nose to be true) expressing his low opinion of his own followers.
The endurance of Keynes makes sense to me from a Marxist economic-evolution perspective. The transition from feudalism to capitalism may be inevitable, but the king is never eager to give up control of the nation's wealth. What could be more attractive than a theory that proves state control of the economy is not only possible but necessary for the common good "” especially when it's backed up by pseudoscientific palaver and equations with Greek letters?
Reason buries Keynes: Reason/Rupe pollster Emily Ekins on why the First Baron's popular audience is staying away in droves. Me on the establishment media's inability to let go in the face of evidence, on the "true Keynesian" counterreformation, and on the mystery of how economic stagnation goes on more than a year after the "aggregate demand" problem has been solved. (Clue: It's only a mystery to Keynesians.) Plus both parts of Russ Roberts' Oscar-worthy Keynes vs. Hayek series.
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Keynesian economists...the "Fire Marshal Bill's" of macroeconomics.
Somehow seems apropos
http://www.freep.com/article/2.....dyssey=nav|head
North Korea is preparing for next year's 100th anniversary of the birth of its founder Kim Il Sung "” Kim Jong Il's father. The preparations include massive construction projects throughout the capital as part of Kim Jong Il's unfulfilled promise to bring prosperity to his people.
No one ever got a job in government by telling a politician "that is out of your control".
But they do get jobs for telling them "That is something you can't be held responsible for"
"A better and peaceful world is possible "” a world where people and nature come before profits. That's socialism. That's our vision. We are the Communist Party USA."
Since we're all so very tired of Keynesian bullshit, just read that line to every Keynesian you meet and whose mind you can't change, tell him to just join the CPUSA to see what their crap leads to just before socioeconomic ruin, and feign pity at how awful it must be to suck so much and understand so little.
A better and peaceful world is possible "” a world where people and nature come before profits. That's socialism.
Uh, no, socialism is using public funds to pay the private sector to build Big Fucking Dams that fundamentally alter nature. Just ask Rachel Maddow.
....Big Fucking Dams
That's Big Fucking Dental Dams right? That was the only dam I was in favor of constructing.
Unfortunately for the rest of us, the dirigiste genie that Keynes helped foster is well and truly out of the bottle. Making matters worse is that it's a type of madness that doesn't immediately appear totally crazy, not least because it appeals to the planner inside all of us.
It only appears non-crazy because of how it is framed. When put non-euphemistically, it seems a bit whacko:
"Some academics think people aren't spending enough, and so that is keeping people from producing enough, even though logically consumption only happens AFTER something is produced. So, based on this bass-ackwards view of which has to happen first, production or consumption of what has yet to be produced, these academics think the government ought to engage in massive currency counterfeiting (aka inflation) to trick people into thinking there are more goods and services available than in fact there are, and people will fall for this because they are idiots, and the resulting consumption of savings will put people in such a desperate economic bind that they will be forced to work much harder to get out of this government induced economic hole, thus goosing economic growth. Oh, and these academics think this outcome would be a GOOD thing."
The stimulus was a resounding success. It's just that most people are either too ignorant to recognize it or too evil to admit it.
What failure? The stimulus worked, don't you know that?
Any failure of stimuli is due to not enough of it.
Also, everything I say is non-falsifiable, and anyone who disagrees with me is an un-academic idiot who hates poor people.
Actually I endorse this nonsense only because it allows me to travel in social circles closed to me before I credentialed myself into the stratosphere and where my blatherings enabled politicians from both factions. If Keynes is ever discredited I'm going to have to go into the evening auto repair program at a local community college. You think I used to get laid regularly before my "prize"!? Fuck no! Okay...maybe the occasional slow witted coed who would blow me for bumping her from a D to a B-...but other than that....please! I'm a furry little nebbish who couldn't get pussy in a womens prison if I was waving a fist full of pardons!
Keynes Die? I'll personally see to it that he lives forever!! No libertarian congressman presidential wannabe or you lousy Reasonistas is going to force me from this cushy gig?
Where is Keynes buried? I have an urge to take a shit.
Dunno. I don't like standing in lines.
In the long run we are all dead.
Why Failure Doesn't Discredit Keynes
Because economics isn't science?
Poorly defined terms?
Correlation doesn't equal causation?
Cuz' those who call it a failure don't have anything approaching definitive evidence of its impact or lack thereof?
Observational sciences like economics have a hard time pinning down causative relationships?
Because opinions are not typically strong enough evidence to prove a hypothesis incorrect?
Yadda yadda.
Because economics isn't science?
Neither is politics, but that doesn't stop academia from pretending it is.
Just because some stuff promulgated as economics isn't scientific doesn't mean the entire field isn't science. The fact that some physicists work in string theory doesn't make physics "not science".
It's a social science, not a hard science. That doesn't make some of it's findings invalid but outcomes are subject to irrational human behavior.
So biology isn't science either? Unless we're claiming animals and plants are rational.
Whether it's science or not depends only on whether it correctly uses the scientific method to test falsifiable hypotheses. It doesn't matter what the subject of the hypothesis is.
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