75 year later and still correct.
“The boom, not the slump, is the right time for austerity at the Treasury.” So declared John Maynard Keynes in 1937, even as F.D.R. was about to prove him right by trying to balance the budget too soon, sending the United States economy — which had been steadily…
“The natural inclination of practical men – who are not necessarily slaves of defunct economists, since there are plenty of live and kicking economists ready to aid and abet their misconceptions…”
“In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the economic crisis. Before the conference begins, and at the insistence of Lord Keynes, they go out for a night on the town and sing about why there’s a “boom and bust” cycle in modern economies and good reason to fear it”
On first viewing, this confused the hell out of me. I took Macro, but I prefer Politics to Economics, Math was always kind of over my head. Regardless, it’s important to have some grasp of economics when studying politics. But as Dead Prez said, “Everything is Politics”, and on second viewing, I realized this video is taking a slightly, anti-Keynesian position. The numbers and economic theories can be somewhat confusing, but this video supports a disturbing, pro-Austerity, anti-Keynes, anti-stimulus, anti-FDR, anti-Krugman, anti-Obama position. They didn’t call Keynes “the master” for no reason. He was proved right be the policies of the New Deal and World War II. What finally got America out of the Great Depression. I dislike the way Keynesian policies are portrayed as an irresponsible night of binge drinking leading to an inevitable hangover.
To blame current problems on Keynesian economic (and on Obama and the stimulus) is naive. Tea Party zealots may eat up any decrease in government regulation, and low interest rates did play a role in causing the recent recession. But Bush and his team were all about the free market and limiting government programs as much as possible. It’s taking longer than a lot of people would have liked to fully emerge from the recession, for unemployment to dramatically fall. But the Republicans in congress were the ones who prevented a big enough stimulus being passed, and it was 8 years of free market orthodoxy that helped cause the recession in the first place. The fact that the financial collapse in 2008 didn’t lead to the Great Depression II is something we should probably be grateful for.
The austerity drive is today’s topic. The austere times in which we live, in which we’re all feeling the pinch, or whatever turn of phrase news reporters are using so much it becomes meaningless if it wasn’t already in the first place. But we don’t live in an age of austerity, do we? We live in an…
“To put this in context, you have to realize two things about the fiscal state of America. First, the nation is not, in fact, “broke.” The federal government is having no trouble raising money, and the price of that money - the interest rate on federal borrowing - is very low by historical standards. So there’s no need to scramble to slash spending now now now; we can and should be willing to spend now if it will produce savings in the long run.”
