There is a new phrase being bandied about in financial circles, Keynesian Economics.
Apparently the theory put forward by John Maynard Keynes in the 1930's is just what we need to pull us out of the present recession and by all accounts the last time it was practised, it proved a resounding success although it seems that the advocates of the British economist are a bit reluctant to say too loudly exactly who the past Keynesian was.
Everyone was suffering in the Great Depression of the 1930's but the first country to pull itself out of the financial mire was Germany under a Nazi regime implementing John Milton-Keynes ideas of beating the downturn by Government spending on massive and expensive projects.
Obviously impressed, Hitler set about building thousands of miles of autobahns, created extensive factory's to build cheap family cars and generally dreamt up grandiose plans for rebuilding German cities.
It worked but of course the unswerving drive out of the depression led directly to the German Government financing the military machine that would later stomp across Europe but the point is, Keynes ideas worked so maybe the key to reviving our fortunes is to spend extravagantly on building projects instead of cutting back.
John Maynard-Keynes, the economist Fuhrers choose.
10 comments:
Lucy,
Keynesian economics was used by the whole world in the 1930's and just about every university has taught Keynesian economics ever since. It dominated my economics classes (I was an economics major... yuck).
Bottom line: Keynes said spend to get your economy going. Which was the opposite of the theory documented by Adam Smith in the Wealth of Nations.
You make it sound very sinister bringing up Hitler and all... do you work for CBS, ABC, NBC, the New York Times, or maybe CNN?
Q
I hope, Lucy, that you are not saying that because Hitler used Keynesian stimulus it is necessarily bad.
I'm relatively agnostic as to whether Keynesian type economic policies are all bad. Just as I am not convinced that we should rigidly adhere to monetarist policies.
Actually you don't need to go back to WWII to find examples of where an open chequebook has resulted in disastrous foreign policy.
*Hums quietly*
The main difference between the Keynesian refloating of the world financial system after the Great Depression, and the kind of 'socialism for the rich' that we're seeing at the moment, is that the Keynes method was predicated on putting money back into the pockets of the ordinary people, so they could start spending more... and the supply would automatically spring up to satisfy these new demands. It was 'bottom up' and organic and worked very well.
(And, that's right Mr McCain, it did involve a little bit of the planet's wealth being 'spread around').
On the other hand, a lot of what we're seeing at the moment is just as 'top down' as Reaganomics ever was, except that it's being specifically engineered that way.
Hasn't the world come a long way, huh?
"Hasn't the world come a long way, huh?"
This is an interesting question, Cheezy. Yes, we have cars, planes, Viagra and wide-screen televisions. Otherwise it could be argued we humans have made no progress in ten thousand years.
We're no closer to peace. We're no closer to living sustainably. We're no closer to being rational. We're no closer to controlling our base instincts, ones like raping and killing and insatiable greed.
The short answer is: NO!
I actually wouldn't agree that we've been going backwards in all respects, but in terms of leadership it would be difficult to argue that there's been much progress e.g. What wouldn't we give to be able to swap the current US Prez with someone like FDR eh?
Q & Dismal, i hadn't even heard of John Maynard Keynes until recently and the word Keynesian actually made me think of the Keystone cops from the old black & white films for some weird reason.
The Hitler thing is just using a nugget of truth to create an angle to try and keep the post different from the million other posts about JMK you can read everywhere else (and pad out a post about a subject that i would struggle to fill a sentence with otherwise).
I do it all the time, don't say you haven't noticed until now!
Lucy,
it was a clever view!
Q
Keynes was wrong on a lot of those economic things of his. His school has dissipated or morphed into neo-Keynesians. His spending programs didn't work. It's been known for a while.
-Nog
Dig up Friedman and Hayek, leave Keynes where he is.
Yeah, why don't we bring back John McCain's good buddy Phil Gramm while we're at it too... Heck of a job, Grammy!
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