The View From 1776
Ben Bernanke Defends The Indefensible
Keynesian economics has never, so far as I am able to discover, worked as predicted by theory. It’s no more than an excuse for liberal-progressives who want an all-powerful government that will, in the name of security, override individuals’ rights to make their own decisions.
- Most economists are simply shills for the major banks and politicians. They support the policies that enrich the bankers, who control the Federal Reserve Bank and also run the Treasury Department. They switch chairs regularly from Wall Street to the Fed to the Treasury Department. It is one big party for them with revolving doors. The president appoints them to these positions of power and they pay for his campaigns.
Keeping rates low allowed the banks to make huge profits on the spread between what they charge borrowers and what they pay savers. It also postponed the day of reckoning when the interest on the national debt will become crippling to the nation. But in the meantime the bankers are making billons of dollars profit for themselves. And the economists who support these shenanigans with complex economic theories are no more than modern witchdoctors, mumbling opaque theory that no one understands and that has never worked.
Oddly, the useful idiots who support the liberal policies of "stimulus spending" and "pump priming" are motivated by a knee jerk desire to support big government control and meddling with the economy. The bankers and pols gleefully encourage this support with their gobblegook about how their policies get us out of the recesssion, etc. It is incredible that so many Americans fail to see the hypocrisy and fraud of these elites in Washington and Wall Street who steal us blind and yet can lie and obfuscate us with these Keynesian theories! They should just ask themselves "Would this huge deficit spending work for my family--make it richer or poorer? Would it work for our neighborhood, or community? Clearly not, so how can it work for the country?Posted by BILL GREENE on 04/18 at 09:30 PM
- Bill and Thomas,
It is stupefying that Mises people continue to deny the plain evidence before their eyes of the recent success of the Keynesian model in rescuing our economy from the most recent crash.
In this post we have weeping and gnashing of teeth that bank interest rates are low on savings accounts -- without the slightest recognition that interest rates on bank accounts precisely track inflation rates!
If you want low inflation rates, you must also accept low bank interest on your savings. There is no free lunch!
Most people would be delighted with the low inflation rates we have enjoyed over the last eight years so that the value of their hard-earned savings has been maintained. Those who have there retirement savings in the market have been doubly rewarded by a bull market.
One other point that bears on this piece is that Thomas has long predicted that the Keynesian "pump priming" and QE cycles would inevitably lead to a depreciating dollar. But, low and behold! The dollar has miraculously strengthened relative to all other currencies! Are you going to believe your lying eyes or the words of Mises?
How many times do the holders of Mises theory have to be wrong before they admit that their model poorly predicts economic reality?
- JJay asserts that : "interest rates on bank accounts precisely track inflation rates!" This religious-like FAITH in economic "laws" reflects a suspension of disbelief more incredible than a belief in immaculate conception--because the latter can actually occur!
Even most economists of the Keynesian persuasion understand that inflation is caused by a complex interaction of at least several economic forces but precisely tracks none of them! Investors generally hope that in normal times and over extended periods their interest earning rate will be a few points ABOVE the inflation rate in order to be earning anything. But, the Fed and its banker cartel during the past several years have managed to keep interest rates even with or at a point or two BELOW inflation rates, so there has been a negative real return for savers. The resulting "weeping and gnashing of teeth" has thus been fully justified and helps explain why individuals and businesses have reduced their economic activity, making the so-called recovery slower than it could have been.
A few of today's economists have recognized that the economic data they study reflect the day-to-day actions of the massive number of individual actors in the market place. Since those individual actors are human, they are fairly unpredictable--and consequently whatever they do over time cannot be reduced to certain laws like the orbits of planets. Granted, however, it is somewhat true that the bankers running the economy from the FED, the Treasury Department, and Wall Street can have an impact on certain economic factors--but it would be a huge leap of Faith in man's inherent goodness to believe for a moment that their efforts in that regard would be directed by anything but their self-interest.
In view of the demonstrated corruption among politicians and the Wall Street elite, their repeated and blatant lying and cover-ups, and their personal aggrandizement, how can anyone believe they are working to help the country or its people at large? And if we accept the fact that they are motivated primarily by personal interest, holding onto power, and building their fortunes, how can anyone in their right mind sustain any confidence in their stated purposes? Similarly how can anyone believe that their economic mumbo-jumbo is anything but a smoke screen to cover their tracks?
Perhaps the answer lies in the probability that those minds that swallow such nonsense are driven by an almost spiritual passion, a religious FAITH that their cause is HOLY and RIGHTEOUS, and must be pursued and believed-- even if some facts may contradict its fundamental tenets.Posted by BILL GREENE on 04/19 at 09:14 PM