As prolongation of the 1930s Depression and stagflation in the 1970s demonstrated, Senator Obama’s announced policies are a prescription for economic disaster.
Keynesian economic doctrine, not under that name, but in substance, is back in the news in a truly menacing way. Senator Obama proposes to repeat the policies of Franklin Roosevelt’s New Deal that turned an ordinary two-year recession into an eight-year disaster, with unemployment rates continuously in the high teens.
The key elements of Senator Obama’s proposed economic policies, as in the New Deal and the stagflation of the 1970s, are much higher taxes, along with a pervasive increase of business regulations and price controls in healthcare and energy (which sharply depress business activity and employment rates), full-frontal embrace of labor unions (which will push up wages and benefits to levels deterring profitable expansion of industrial production), and massive new government deficit spending (which will accelerate the already dangerously high rate of inflation and devaluation of the dollar). Carried out as he proposes, Senator Obama’s polices will lead us again into the swamp of stagflation.
The basic thrust of Keynesianism is the belief that control of the economy must be collectivized at the Federal level, because private business is incapable of providing full employment, and because the proper goal of economic policy must be thwarting greedy businessmen to attain so-called social justice: equal distribution of income and wealth, without regard to merit, capability, or hard work.
Not surprisingly the New York Times editorial board and the Times’s propagandist Paul Krugman are prominent Keynesian enthusiasts.
In practice (in the 1930s Depression and in the 1970s stagflation) Keynesian economics caused devastating harm to every citizen. In the stagflation of the 1970s not only was unemployment distressingly high, particularly in Midwestern industrial areas, which became known as the Rustbowl, but inflation wiped out roughly 57% of the purchasing power of every citizen’s lifetime savings.
For an eminently readable analysis of Keynesian economics, the economic bedrock of liberal-progressive worship of the socialist religion, read Professor Murray Rothbard’s 1947 critique, Spotlight on Keynesian Economics.
One caution: when Professor Rothbard speaks of liberal economists, he is using the classic terminology of 18th England that referred to true freedom: laissez-faire economics, free from government intervention, not to today’s American sect of the international religion of socialism.
Thomas E. Brewton is a staff writer for the New Media Alliance, Inc. The New Media Alliance is a non-profit (501c3) national coalition of writers, journalists and grass-roots media outlets.
His weblog is THE VIEW FROM 1776
http://www.thomasbrewton.com/
Email comments to viewfrom1776@thomasbrewton.com
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lieweary said,
I think you’re confusing Keynes with Marx! A central point of Keynes is the importance of a high level of employment. If unemployment rises to catastrophic levels like it did in the Great Depression, aggregate demand can fall into a tar pit which is difficult to climb out of. This was an important idea, because classical economics assumes that the business cycle never gets ’stuck.’ That’s not at all the same as advocating government ownership of the means of production.
May 13, 2008 at 5:15 pm
nestorey said,
Tell whatever backwards, reactionary, neo-con, windbag you are getting your self-righteous idiocy from, he or she would be well advised to at least make the slightest effort at, if not economic, then at least historical accuracy.
Facts:
1. The Great Depression was caused by a severe miscalculation of the money supply by the Federal Reserve (know who those guy are?), meaning that it was an error in MONETARY (economic regulation by the Fed), not FISCAL (economic regulation by the Gov.), policy which precipitated the financial disaster that was the Great Depression.
2. Keynes was an obscure British economist until the publication of his paradigmatic tome that revolutionized economic theory in 1936; six years into the depression…dummy.
May 13, 2008 at 10:06 pm
Ouderkirk said,
You forget Keynes’ “Open Letter to the President” of December 1933. You should read it….dummy.
May 14, 2008 at 7:24 am
nestorey said,
Of course, Keynes as an influence on the New Deal is just one of the bricks of ignorance making up the house of stupid that is the logic behind this article.
Stupid wrote:
The basic thrust of Keynesianism is the belief that control of the economy must be collectivized at the Federal level, because private business is incapable of providing full employment, and because the proper goal of economic policy must be thwarting greedy businessmen to attain so-called social justice: equal distribution of income and wealth, without regard to merit, capability, or hard work.
Beside his abhorrent abuse of the English language, his contention is as far from Keynesian theory as his brain-washed, Fox propaganda soaked, Sponge Bill Square Pants O’Reilly parroting, Head-Rush Limbaugh worshiping, Dick “deferment” Cheney cabal supporting, chicken-hawk apologist ideology is from reality.
Put that in your pipe and smoke it, son.
May 14, 2008 at 5:40 pm
nestorey said,
Also…Rather than suggesting that I read the letter, maybe you should look it over (I’d recommend the same for Brewton but he wouldn’t get it) and realize that far from being the impetus behind Roosevelt’s New Deal policy it was a comment upon and suggestion toward its improvement.
But putting aside the historical inaccuracies of the academically challenged author of the above cobbled together, pathetic attempt at relevant political commentary, the most pressing idiocy appears in the total fabrication of Keynesian theoretical intent. Such as this drivel he attempts to pass off as legitimate economic commentary:
“The basic thrust of Keynesianism is the belief that control of the economy must be collectivized at the Federal level, because private business is incapable of providing full employment, and because the proper goal of economic policy must be thwarting greedy businessmen to attain so-called social justice: equal distribution of income and wealth, without regard to merit, capability, or hard work.”
That you would even in any way attempt to defend this puss oozing out of Mr. Brewster’s infected, open sore of an intellect places you squarely in what I am sure is the squalled influence of such diseased ideologies as are orally defecated by the likes of Sponge Bill Square Pants O’Rielly and Head Rush Limbaugh who you neo-con automaton’s so despicably kneel down to even as they lead the county into ruin…dummies.
May 15, 2008 at 2:44 am
Squiggy said,
You’re still in college, right? Lots of theory, no knowledge. Ever hear of the Philips curve? Still a paradigm of Keynesianism, even though the nineties completely disproved it (low unemployment, and low inflation).
But hey, at least you’re getting your money’s worth for your creative writing classes. Your adjectives are awesome. I’m sure your loud tone and bad attitude aren’t trying to cover up any shortcomings, eh?
May 15, 2008 at 4:40 am