Wednesday, May 30, 2012

Keynes Addiction

Someone said 'all politics is local' and indeed it does start locally... and ends up manifested with local outrage.

But it carries down from the very top.

Every time you see a 'Tax Reform' package purporting to fix inequities and injustices, you see a few clauses in there that favor the 'friends of...'. Most often those who make their living preparing taxes and litigating tax law. You think it's an accident that Joel Hyatt -H&R Block, Hyatt Legal Services- is a Liberal.. or is that 'Progressive'?
And after all the years of trying to make sure the 'one percent pays their share' how is it exactly that wasnt fixed long ago? Hmmmm?
My long term outrage at how the economy works bears very much on taxes and government manipulation of the economy and it started 45 years ago, in the first few months of my one year in college.. when Keynesian economics was presented.
I realized I was not suited for academia when I realized I would have to listen to drivel like:
'You reduce inflation by raising interest rates and taxes.'

Indeed that's true.. if all you care about is the next two years. But when you carry those forward for more than a few business cycles and especially union contracts {remember that was the sixties} you find all you did was push inflation forward.

It seemed to me that anyone with a least degree of common sense should know that everyone is going to at least TRY to get theirs back.

You have to remember that Keynesianism DOES provide effective short term tweaks. If it didnt, it wouldnt still be around. But it also encourages market manipulation by those entrusted to promote good for all by manipulating for gain.
What economic model was used to promote the 1999 CRA? ANd the subsequent housing bust.. Keynes. See how we fixed the mortgage problem? By keeping at the same thing that caused it in the first place.

And it's self-perpetuating. When you try to fix an economy distorted by Keynes, you have to go slow. Being an addiction, withdrawing from Keynesian situation, where we borrow one third of our federal budget, must be carefully done.

So it REALLY pisses me off when I see bullshit like this:
Why Don’t Republicans Mind When Romney Talks Keynesian?
Why Don’t Republicans Mind When Romney Talks Keynesian?

Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.

Chait notes, bemusedly, that this deviation from orthodoxy has provoked no outrage on the right, which to him is further proof of just how cynical the Republican anti-Keynesian stance really is:

So Mitt tells the TRUTH. And people with the least degree of common sense understand that.. and it's used AGAINST him? And them?

This is why I despise 'Liberals'. Either they are too stupid to be allowed to write that BS.. or they are evil in intent. You tell me.

The bottom line is that Keynesian Economics not only lends itself to Central Planning, but REQUIRES Central Planning to fix the results of applying Keynesian Economics