Jack Maturin on March 30, 2009 at 01:00 PM
Agreeing with everything Patrick said, I can only add the following question; why do none of these Keynesians ever read the works of Rothbard of Mises? If they did, they would realise how wrong they are to still follow Keynes and Galbraith, and why Keynesian policies turned the panic of 1929 into the Depression of the 1930s, why Keynesian policies created the stagflation of the 1970s, and why Keynesianism has helped keep Japan mired in recession for almost 20 years.
Roger Bootle, however, paints a picture which will make it possible for him to claim 'success' for his prognostications, whatever happens.
Either what the politicians will do will be too much, or will not be enough. Therefore, there is no way to test whether Mr Bootle will be right or wrong. His claims are therefore unfalsifiable, as is always the way with notable Keynesians, particularly Paul Krugman, of course.
If we continue on this course of government intervention, with all of its false interest rates and mass counterfeiting, we are heading into a storm of stagflation or even depressive hyperinflation, and this may continue for some time, directly due to politicians following the government-loving positions of the Keynesians.
The solution is for governments to do absolutely nothing. We must rip this plaster off quickly, rather than dragging it off slowly.
If governments must do anything, they must drastically cut their wasteful spending and pass through the money saved as tax cuts, where it can be properly used rather than wasted on pointless government rubbish.
They must particularly concentrate on removing all taxes on saving, investment, and company profits, to encourage everyone to make real savings, to increase real production, rather than create the false savings of counterfeiting which have created the false feelings of prosperity which led to this crash in the first place.
We cannot stop this recession.
It was caused by the waste created in the central-bank-induced boom, fed by false interest rates set way below where the free market would have set them, to enable 'in situ' governments to claim ongoing 'economic success'.
The recession is a necessary bust to clear out this malinvested waste. The only real question is how long the recession will be. We can either embrace it and get through it quickly, or we can continue trying to push it off into the long grass, usually beyond an inconvenient election date, but we will then never be rid of it.
If we accept it, and work through it, we will then have one or two really hard years, in which all of the malinvestments of the last 15 will be rapidly cleared out, and then we will be able to build again. (Hopefully this time without crass government central bank interference and false interest rates.)
If we keep going with this government nonsense, of counterfeiting and increasing debt, we will recreate another depression which will make the recent Japanese experience look like an economic wonderland.
We will then only get out of this mess when the government runs out of taxes, cannot borrow any more, and we are faced by a population close to revolution who will tolerate no more inflation or who simply start using another black-market currency, such as gold or silver.
Do we really have to get to that, before the Keynesians finally admit that they are now, have always been, and will always be; Wrong. On every single matter of substance.
Here are the books you need to read, Roger. (Please throw away the Keynes and the Galbraith. It's really not doing you any good.) If you Google carefully, you'll find all of these books free and online either at ScribD or as beautifully prepared PDFs at Mises.org.
All of the following are by Murray Rothbard:
The Mystery of Banking
America's Great Depression
Man, Economy, and State (with Power and Market)
The Case Against the Fed
The Austrian Theory of Money
The Case for a 100 Percent Gold Dollar
What Has the Government Done to Our Money?
Other books to read include:
Economics in One Lesson (Hazlitt)
Austrian Theory of the Trade Cycle and Other Essays (Mises et al)
The Causes of the Economic Crisis (Mises)
The Theory of Money and Credit (Mises)
Prices and Production, and Other Works (Hayek)
Understanding the Dollar Crisis, (Percy Greaves)
Money, Bank Credit, and Economic Cycles (Jesus Huerta de Soto)
Banking and the Business Cycle (C.A. Phillips)
When it comes to Keynes, Galbraith, and Krugman, we've all got to learn to 'Just Say No'.
Monday, March 30, 2009
G20: Our leaders must ensure we don't take the road to a repeat of the 1990s
Roger Bootle comes out with more of his usual unfalsifiable Keynesian flim-flam. Fortunately, a guy called 'Patrick' said everything I wanted to say in one of the comments. But I thought I would add something anyway, especially as we are close to sending these Keynesians over the edge! :-)