Quote from Ricter:
To my understanding Keynes's suggestions were primarily for government, not Fed action (except for backing off of deflationary policy).
Edit: argue with you tomorrow, have a good one.
Good god, you dont believe that interest rates are a quintessential element of Keynesian Economics? You should tell Krugman that.....
Furthermore, you are saying you want "wage inflation" which could be created by the government. The problem is that the government cant create jobs without taking money from somewhere else, thus zeroing the whole process out.
Unfortunately like most liberals, Keynes assumed that the government is actually efficient, and capable.......The funny thing is that if we actually had a responsible dictator running the country you could probably make keynesian economics work, but with the way government works, you only ever see one side of keynes. The government simply is not capable of making tough decisions fast enough to make keynesian economics work.
If you had a responsible dictator running the country, they would actually be willing to slash government spending quickly in an overheated economy thus deflating the economy a bit, and creating a surplus which could be used in future years......
The fact of the matter is when you look at what happens with elected officials on either side, there is not A SINGLE POLITICIAN who would go up to their constituents and tell them that they are going to cut the government during good times, Which would allow people to efficiently shift from the private sector to the public sector, to create a steady trending economy.....
So all that you end up with when you run the course with keynesian economics is lower and lower interest rates, higher and higher spending, and lower and lower income tax rates, because the bottom line is that none of these ass holes are ever going to engage in the flip side of keynesian economics which is slowing down an overheated economy.
The other problem with keynesian economics is that it assumes that the government is actually smart enough to see the times when you do need to slow down or speed up the economy.....
In the last 2 decades we saw a once in a century boom followed by a once in a life time bust, and yet keynesians werent able to predict either one...... So what are their odds of fixing the moves in between?
Alot of keyensian cheerleaders say that the Bush tax cuts happened at the wrong time, because the entire world fell apart in 2008..... well tell me this, if the majority of money managers who make their living off of fluctuations in the economy, were incapable of predicting the 2008 crisis, how in the hell was the government ever going to see that happening in advance?
The fact of the matter is that in early 2000 the economy was weak, and Bush increased spending and cut taxes, a Keynesian wet dream, but now in hindsight alot of the keynesians are saying he shouldnt have done it because it got worse in 2008..... Krugman was cheering for a housing bubble back then......
Keynesian economists like Krugman remind me of hindsight traders, who talk about the intelligence of investing in AAPL 30 years ago...... They never seem to be able to accurately predict things in advance, now do they?
Basically the only way keynesian economics could work is if you had a responsible dictator, who could easily move fiscal/monetary policy any way he wanted to at a whim, who also happened to be the best predictor of the economy in history......
Other then that there is simply no way to make it work, and history has shown it has been a colossal failure, mostly because it relies on ELECTED politicians to execute it flawlessly in order for it to work....
