The View From 1776

Hayek vs. Krugman Re Keynes’s “Liquidity Trap”

Krugman is still riding a dead horse from Franklin Roosevelt’s disastrous New Deal.

Posted by .(JavaScript must be enabled to view this email address) on 07/30 at 01:15 AM
  1. Reading keynes, it is easy to see the trap he fell into: his arrogant belief in a cult of the expert, he of course, being a member in good standing of that administrative and academic class. There is only one way to hold on to such a belief: you first must transform all those who are outside of that class into sub-human abstractions, ciphers, accounting entries or "aggregates", as it were.

    The 'mongrel' comment of the president's the other day should come as no surprise to students of 'progressivism'. That's the way they think. People are not individuals but categories. The progressive in chief represents his faction well. Philosophical moron and semi-literate in the areas of science and history susceptible to the kind of nonsense only an 'intellectual' could believe. Embarrassing.
    Posted by .(JavaScript must be enabled to view this email address)  on  07/30  at  04:05 PM
  2. I am definitely not defending Keynes but, we aren't even following his theory. We have veered from all sensible concepts of budgeting and now, only a collapse will wake the government up to the fact they are on a totally unsustainable course as our own government accountants keep warning Congress of.
    Posted by JanPBurr  on  07/31  at  03:06 PM
  3. Jan- Keynes' problem was his naive belief that politicians and bureaucrats were some kind of superhuman, disinterested, saintly, philosopher/kings who would only act altruistically, for the greater good as 'scientifically' determined by the progressive faithful. The countercyclical policies make sense in theory but could not be more impractical. He couldn't see it and because of that simple flaw his theory is worthless.
    Posted by .(JavaScript must be enabled to view this email address)  on  07/31  at  04:10 PM
  4. I agree but, we aren't following Keynes theories.

    His theory required surpluses be built up during good time and that you didn't run deficits. It is like the household that saves.

    You don't spend as much during good times so you can build up a surplus and then when you are laid off, you keep spending almost as much, paying all your bills, first, and then your basic needs and then some discretionary spending.

    For a nation, the dampers the "booms" so they don't become bubbles, and reduces the recession so they don't usually, even require any "infrastructure projects" that would be used when you return to a normal economy. Moderation is the key word along with stability.

    You don't lower interest rates and you don't step up borrowing and instead cut government spending in some areas even if you are increasing spending in other areas but, from the national level it is bad, normally.

    You need each city and state doing the saving a building of a surplus and the federal government doing it too, but, there, it is more for emergencies like a war (an actual declared, war), famine, major storm crisis, etc.

    We do everything backwards from what our founders intended which was to limit the Federal Government in most ways while the local and state governments took care of most things. But, again, that requires building up surpluses.

    You are 100% correct that he probably viewed politicians as well intended, wise administrators like our founders were.

    The early founders often ran businesses and understood economics and monetary issues. Now we have people for the most part who never run a business and if they do own them, have somebody else running them. Thus, we have people passing policies who rely on Goldman Sachs and the Globalists in the CFR, to tell them what to do, just as Hillary Clinton said the CFR does. Both parties depend on these people to advise them.

    But, our politicians are not following Keynes' theory but rather the instructions of the international bankers so that we can be led to a global financial system with a global currency they control. This is not socialism or capitalism but a type of fascism where the international banking system controls the major international corporations, the media and both parties through their cabinets and advisers.

    This is also a system that I believe will fail and the America people will wake up in a depression and demand "real" change back to sound fiscal policy and a rebuilding of the nation from the local level up.

    Distracting the American people with what economic theory the government might be following or whether it is capitalism or socialism that is the blame is how they win. They divide the nation when in fact, it is not even pertinent whether it is Keynes or not, capitalism or not, socialism or not.

    We are marching to tune played by the international banking cartel and that doesn't mean most "banks." It means mainly the Central Banks, World Banks, BIS, IMF and the very few families that are behind them.

    This is a battle that has gone on for a few centuries now and from our founding on and certainly long before Keynes came on the scene. We have been doing many of the things we are doing now, since the 1800's. The international banking cartel has had 3 central banks in the U.S. We got rid of two of them and now need to get rid of this one.

    The whole game plan of the banks from the founding of this nation has been to use anything to divide the people, centralize power and move us to a one world financial system they control. They have used any theory, war, political issue, political party, cultural issue, economic problem, etc. to divide the people. Divide and conquer is as old as mankind and they use it very well and not just in our nation but, I believe they have gone to far and will fail but, it will take a government collapse to know they have failed.

    If you are interested, read the article I wrote for Financial Sense. It is one of a series of "interviews" with past Presidents. This is the link to the series.

    http://www.financialsense.com/user/211 (scroll down for the list of articles)

    Part I is an interview with George Washington, using his Farewell Address for the answers to my questions, where he warns so adamantly about political parties and how they divide the people. In the U.S., the banking cartel uses both parties and their differences, but at the same time using flawed economic and monetary theories, to divide the people. Most in Congress don't have a clue of how they are manipulated because they believe the advice they get from people like those from Goldman Sachs or the CFR is sound and best for their party.

    We are following "no theory" but rather, the advice of a group of international bankers who are only interested in their own goal and power.
    Posted by JanPBurr  on  07/31  at  06:01 PM
  5. I agree with you but the international bankers would get nowhere without the politicians! We have built up a monstrous bureaucratic/administrative state structure which is supplied with the credit it needs to exist by the central banking system. What are those banks betting on? Nothing but the future tax collecting ability of their clients! Municipal bond coupon clippers have done the same thing for the states and localities but that model is now failing. We may in fact be getting close to the end of the line as far as that tax collecting power goes as the productive economy is slowly strangled by the screwballs in power while the vulgar keynesian paradigm or 'rationale for irrationality' collapses. There is a theory being followed and it IS a kind of keynesianism with it's emphasis on top down control, fiat money and the confusion it fosters regarding the process of capital formation. The problem is the rationale it provides to those who hold the coercive power yet need to stand for re-election, to do what they would like to do anyway: spend other peoples money without limit, to buy votes and pay off supporters, yet absent blatant confiscatory policies. The policies are confiscatory however, although it is confiscation by stealth, of future generations.
    Posted by .(JavaScript must be enabled to view this email address)  on  08/01  at  12:55 PM
  6. You are correct they need the politicians. That is why the control many corporations, the TBTF banks, the CFR, Trilateral Commission, World Bank, IMF, etc. They know that politicians depend on these for financing and advice. They control the two parties without them often knowing they are being controlled.

    They also don't mind if this nation suffers a collapse if they get their global financial system and global currency. They would even help rebuild America (if we foolishly let them) to become part of that global system.

    They will sacrifice any politician and any party if it furthers their goals. They will sacrifice nations, too. They sincerely believe the "ends justify the means."
    Posted by JanPBurr  on  08/01  at  01:08 PM
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