Keynes & Hayek Are Back
President Trump is doing mostly OK but he still is a bit confused by economics. I mean real economics, the Austrian kind, and not authoritarian/collectivist economics, the Keynesian aggregate macro-crap. On the one hand, DJT’s doing well to kill regulations and red tape, allowing individuals and businesses to make their own decisions based on where they see profits to be made. But on the other hand, he’s pushing for lots of govt spending on infrastructure and “defense”, as Keynesian a set of projects as ever were conceived.
This calls to mind a couple of funny but well-crafted and informative videos on youtube from several years ago: Keynes vs. Hayek Rap, Rounds 1 and 2. Click here for Round 1, and here for Round 2. They’re worth a few minutes, and you might want to turn on closed captioning for both because they’re not the usual voice recognition gobbledygook but actual lyrics.
P.S. I put “defense” in quotation marks because the bulk of the money does nothing to improve the defensive capabilities of the U.S.A. I tend to favor having a good set of defenses and it pisses me off the govt and its cronies get away with a ludicrously larcenous level of graft and corruption by calling it “defense spending” and expecting patriots to shut up and sit down.
Most of the Keynesians I know are Democrats. That seems like a good reason to be against it.
The Donald would have to be Superman
to straighten out the full mess we’re
in. If he can do half of what he said
he’d do, I’ll be satisfied.
Why do I read Kenyansian rather than the printed Keynesians.
I both agree and disagree with these premises. My disagreement stems from the fact that many infrastructure programs, such as roads, bridges, interstate highways, and airports require public expenditures to be effective, and quite a bit of our infrastructure needs repair and updating. Similarly, national defense is a public concern, and privatizing the military is a sure way to ensure continued and expanded conflicts and wars.
But I agree that using these programs in a Keynesian effort to boost the economy is a fool’s errand. Like communist theory, Keynesian theory ignores human nature, and ignores the fact that people run the government, and they will almost always act in their own best personal interests. There are numerous examples of defense programs that the armed services want scaled down as unnecessary, but politicians keep alive because it “benefits” their districts.
Keynesian theory actually has two parts – the government “stimulates” the economy during recessions through deficit spending, but then uses surpluses achieved during boom periods to retire the deficit. But do politicians ever use surpluses to decrease deficits and repay public debt? No, they spend surplus money on other programs to increase their own power and wealth.
The university I attended focused on Keynesian economics, and even as an undergraduate it appeared unworkable in the long term due to the lack of understanding of human nature.
It may take a while for Trump to let go of his liberal mindset when it comes to government. Also, being a deal maker, Trump thinks everyone has skin in the game. Little does he know the government takes scalps if not restricted. He’s got four years to see the light.
This is why I come to this site, I always find a shiny nugget amongst the less shiny nuggets. Go to their website, it is more funnier.
http://econstories.tv/
@John March 11, 2017 at 9:56 pm
Better than twice as many steps back, true. Not as good as however many steps forward, with as much tripping in place as the “progressives” can get away with. But half the planned steps forward, accompanied by half the planned steps back, doesn’t yield much progress.
Wyatt, IPJ:
With this model, the govt ends up 180° out of phase with any naturally occurring business cycle: it turns up the thermostat when things get too hot, and runs the A/C when everyone’s shivering. But as you point out, govt tends to keep sucking wealth out of the accounts of its subjects regardless of the overall state of economic activity.
Thank you, The Gunny. I’m gratified you and I like the same shiny nugget!
Thanks for the link Gunny!
Unky, those were great videos, I watched them twice, the guy who played Hayek is just my type. heh!
What I object to are the milking amendments. Congress should not be allowed to get their piece of the apple pie, by financing through pork barrel bribes.
Janifer needs to be ban-ifered.
Is there an internet Phantom Zone that annoying internet trolls can be banished to forever? And what kind of phony name is Janifer anyway? Janifer sounds like a tranny named Jan who thinks that Janifer gives him/her more credibility because it sounds more female.