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Previously exposed atKrebsCycle.

It's not because they don't believe "Keynsian stimulus" works - although they pretend otherwise. Listen to Republicans talk about Federal spending on the military or state spending on roads - they know that government spending can create jobs and wealth even if they usually say the opposite. What Republicans and Hayekians and the other right wingers hate about Keynes is that he explained how poverty and scarcity and struggling to make a living and competing just for basics are all unnecessary. 

A modern industrial economy, based on markets, without a "command economy" or bureaucratic management of everything can provide both opportunity for wealth and success and a basic good standard of living for everyone. In the 1960s and 1970s, even market fundamentalists like Milton Friedman advocated that the government could pay everyone a basic living wage. Just offer every person the option of a basic living for when they were sick or studying or taking care of little kids or thinking up a great invention or writing poetry or whatever. People who wanted more or want to be useful would work. Friedman said this program would be  cheaper and less demeaning and more effective than 100 different welfare programs all of which have bureaucratic overhead and have to spend a lot of money in a not very effective effort to prevent cheating.  In those days people then spoke about "post-scarcity"  economics. 

 As Keynes had shown, and as the great J.K. Galbraith helped prove, government actions can create market conditions for economic growth and general prosperity high enough to be able to afford such a program. For example, the government funded basic research and then the initial development of the Internet, generating a huge increase in prosperity.   None of this was all that new: Adam Smith pointed out that if the government kept interest rates low the markets would favor well thought out investment, but if rates went up too high investors would speculate and harm national prosperity (ahem, Lehman Brothers).  But it was Keynes who first explained that poverty and insecurity could be cured within market systems with some limited assistance from the government. 

Here's Keynes writing just after WWI to explain that market systems in which all the gains are grabbed by a very small number of people are unstable and unnecessary:

I seek only to point out that the principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it, and to emphasize that this principle depended on unstable psychological conditions, which it may be impossible to recreate. It was not natural for a population, of whom so few enjoyed the comforts of life, to accumulate so hugely. The war has disclosed the possibility of consumption to all and the vanity of abstinence to many. Thus the bluff is discovered; the laboring classes may be no longer willing to forego so largely, and the capitalist classes, no longer confident of the future, may seek to enjoy more fully their liberties of consumption so long as they last, and thus precipitate the hour of their confiscation.

But this is heresy to conservatives. The conservatives tell the public that the only alternative to a system in which "few enjoy the comforts of life" is  some despotic Stalinist  state.  "Put up with David Koch dumping poison in the sea and buying Senators", they say, because the only alternative is misery for all and the despotism of a command economy. Keynes showed that was nonsense.

A dynamic market economy without fear and scarcity is the  last thing conservatives want - because it would limit the power of the elite. For conservatives, when a "job creator" threatens to shut down low wage jobs unless he gets more government subsidies, less regulation of harmful environmental effects, less job safety, and no taxes the response should be be craven fear and obedience.The idea that the response could be: someone else can organize that work better, safer, more profitably, and more cleanly,  terrifies the entrenched "incumbents" at the top of the heap, their paid propagandists and flacks, and people who enjoy servility.  And  face it, the popular support for the right is from people who take pleasure in the misery of others,  fear change, and love having "powerful" bosses. You know, from the kinds of people who as kids followed the bully and cheered him on. Impertinent rabble rousers, entrepreneurs, inventors, tinkerers, innovators, union organizers, do-gooders and other trouble makers who want to change the world ,  are poorly suited to conservatism. So are people who just want to do their part and carry their share of the work

Why do conservatives hate Keynes? Because Keynes showed that market economies can be post-scarcity economies and that the deprivation,uncertainty, fear and insecurity that are so much a feature of our present economy can all be cured. Conservatives need  deprivation and insecurity to keep the serfs in line. They don't hate Keynes because his suggested policies don't work They hate Keynes because his suggested policies do work. What would a party that wins office by scaring people with lies about how immigrants are going to take their jobs or black people are going to take all the welfare or other nonsense do if nobody was scared?

Originally posted to citizen k on Sat May 11, 2013 at 03:18 PM PDT.

Also republished by Keynesian Kossacks.

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Comment Preferences

  •  Republished to Keynesian Koassacks (15+ / 0-)

    TnR

    .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Sat May 11, 2013 at 03:38:28 PM PDT

  •  Conservative Hatred Of Keynes Is Situational (12+ / 0-)

    That is to say Republicans hate Keynesian economics when a Democrat can take credit.   Looking at recent history Republicans really love Keynes when they control the White House.

    Of course it does not matter what economic model would help the economy under President Obama.  Republicans are hell bent on suppressing economic recovery in order to pin responsibility for wide spread suffering and and economic hardship on a Democratic president.   If the history of the economic catastrophe brought about by Republicans, and their dogged determination to not allow robust recovery under Obama is ever fully understood by the American people, the Republican party as a national institution will cease to exist.

    I am the neo-con nightmare, I am a liberal with the facts.

    by bhfrik on Sat May 11, 2013 at 03:54:14 PM PDT

  •  I think you are wrong about this (4+ / 0-)
    Recommended by:
    VClib, psnyder, slowbutsure, Rich in PA
    It's not because they don't believe "Keynsian stimulus" works - although they pretend otherwise.
    I think they simply believe that Keynes was wrong about a lot of things, and that people like Hayek and Friedman were right. Like Keynes, they can provide data to support an argument that their view of the economy is correct.  

    That's the fundamental problem with economics.  Both sides can prove correlation in support of their theories -- but neither side can actually prove causation beyond all argument.  When you are looking,for example, at the American economy, it's impossible to control for variables, which makes causation virtually impossible to prove. For example, yes there was a big tax cut in 1964, and yes the mid to late 1960's was a time of huge economic growth.  But it's difficult to prove causation - that one caused the other.   Similarly, there was a big tax increase in 1993, and an economic boom in the mid to late 1990's.  Did one cause the other?  That's virtually impossible to prove, because you can't control for the other variables (the dot.com boom, for example).  

    You take the approach that conservatives know Keynes was "right," but simply disregard his theories because they don't like them.  I disagree. I don't think they "know" Keynes was correct. I think they believe that Keynes was wrong about a lot of things, and that Hayek and Friedman were right.  

    And that's why, when it comes to dealing with the economy, very little can get done.  Progressives and conservatives are just operating in two separate universes and talking two different languages.  

    •  the evidence does not point that way (23+ / 0-)

      Keynes, among other things, argued that increasing general levels of consumption drove production and had a feedback effect - in the proper conditions.  The GOP/Conservative problem with this is they do not want generalized prosperity.  However, when they have specific areas of the economy that they want to subsidize they are perfectly ok with this type of keynsian policy.

      For example:

      In an interview, Jordan challenged the Army’s position: “You’re going to lose a skilled workforce and have the cost associated with shutting down a facility and then reopening it? Is that really the smartest way to go about making sure our Army is best-equipped and the No. 1 fighting force in the world? I disagree.”

      Jordan said taxpayers will be hurt if an already shrunken workforce is asked to stop production. In an interview, Jordan challenged the Army’s position: “You’re going to lose a skilled workforce and have the cost associated with shutting down a facility and then reopening it? Is that really the smartest way to go about making sure our Army is best-equipped and the No. 1 fighting force in the world? I disagree.”

      Jordan said taxpayers will be hurt if an already shrunken workforce is asked to stop production.
      http://www.bloomberg.com/...

      The problem is that being against jobs and prosperity, in general, is a losing electoral platform. So conservatives lie. No doubt, some suckers really do believe Hayek, but he himself was obviously aware to some degree that his position was dishonest.

      Keynes saw general prosperity as a positive goal. Hayek saw it as a danger.  The real divergence is in goals - which is why Hayek went down to Chile while Pinochet was torturing people wholesale and destroying the standard of living of most Chileans and cheered them for creating "economic liberty"

      self-appointed intellectual cop

      by citizen k on Sat May 11, 2013 at 04:10:30 PM PDT

      [ Parent ]

      •  I understand your views on Hayek (3+ / 0-)
        Recommended by:
        psnyder, slowbutsure, VClib

        I expect nothing less from a progressive.  I expect a defense of Keynes from progressive.  

        All I'm saying is that I think you are wrong to think that conservatives secretly agree with Keynes but publicly deny it.  Conservatives believe in a lot of what Hayek said, and many conservatives adore Milton Friedman.  There is an entire school of economists -- really smart people, operating in good faith -- who believe more in Hayek/Friedman than they do Keynes.  I'm sure you think they are wrong.  That's fine; I certainly expect that of a progressive.  All I am saying is that there is a real difference of opinion on economics.  Your statement indicating that conservatives secretly think Keynes was right is just not correct, in my view.  

        Here's why it matters.  It does not advance the ball at all to pretend that there's no legitimate economic dispute between the various groups of thought -- to imply that everybody really is a Keynesian, and those who say they aren't are lying.  It really doesn't advance the ball at all for progressives to pat themselves on the back and say no intelligent person can disbelieve Keynes.  Conservatives are doing the same thing about, for example, Friedman.  And that doesn't advance the ball, either.  That's why we have the gridlock on economics that we do.  Because conservatives believe just as strongly in people like Hayek and Friedman as you do in Keynes.  

        •  I find it impossible to take Hayek on his word (9+ / 0-)

          Hayek's lauding of Pinochet shows his conception of "liberty" to be the conception of the European Aristocracy or Confederate Slave owners.  In that light, his economic writings makes sense, but are, to be nice about it, duplicitous. Maybe you have another explanation.

          As for Friedman,  from his support of the basic income proposal to his implicit support for Fed Bank stimulus, I think he's, at best, unclear about the role of the state in the economy. I should note that Friedman, while not as grotesquely as Hayek also has moral problems due to Pinochet.

          Conservatives had an excellent point about 1930s leftists who found justifications for Stalin. But they have worked very hard to evade the consequences of this analysis applied to Pinochet.

          self-appointed intellectual cop

          by citizen k on Sat May 11, 2013 at 05:28:17 PM PDT

          [ Parent ]

          •  Conservatives' love for Pinochet (1+ / 0-)
            Recommended by:
            VClib

            is similar to certain lefties' love for Chavez, or, in earlier eras, Stalin or Castro. Mostly romantic and self-serving, quite disappointing, and based on enormous amounts of self-delusion if not outright dishonesty, to make reality fit into their rigid ideologies. Which is why ideologues of all stripes are quite tiresome.

            "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

            by kovie on Sun May 12, 2013 at 06:58:26 AM PDT

            [ Parent ]

        •  And this is why economics is called (2+ / 0-)
          Recommended by:
          Words In Action, Naniboujou

          "The Dismal Science".  I wonder if we can get Lemony Snicket to take up this topic...

          ...Son, those Elephants always look out for themselves. If you happen to get a crumb or two from their policies, it's a complete coincidence. -Malharden's Dad

          by slowbutsure on Sat May 11, 2013 at 05:30:58 PM PDT

          [ Parent ]

          •  Rec'd for your reference to (1+ / 0-)
            Recommended by:
            slowbutsure

            Lemony Snicket!  :-)

            "Hate speech is a form of vandalism. It defaces the environment, and like a broken window, if left untended, signals to other hoodlums that the coast is clear to do more damage." -- Gregory Rodriguez

            by Naniboujou on Sun May 12, 2013 at 06:24:02 AM PDT

            [ Parent ]

        •  However (6+ / 0-)

          When in power, "conservative"  politicians never act as if they believe in the surface meaning of Hayek/Friedman.

          The Bush administration was a non-stop exercise of government subsidy of favored economic interests. And the bitter opposition from conservative politicians to such things as President Obama's proposals to end special subsidies of hedge fund managers, executive jet owners, and oil companies is also definitive.

          self-appointed intellectual cop

          by citizen k on Sat May 11, 2013 at 05:31:29 PM PDT

          [ Parent ]

        •  You're making the common centrist mistake of (9+ / 0-)

          of false equivalency.  Just because someone presents "evidence" of something and is adamant in their belief that their team is correct, in no way shape or form does that help their argument.  Basically you're saying because you don't know enough about evidence to read it correctly you cannot at least make a decision about who is closer to the truth.  They can believe in what they believe all they want to.  I'm sure they put on nice business suits and meet at convention halls.  That sort of atmosphere must appeal to you.  That doesn't make them right.

          It ALSO doesn't make them not hypocrites.  You have plenty of Republicans in HIGHLY conservative districts who love the Army, subsidized corporate, and federal tax dollars to boost rural areas that would otherwise have nothing to offer and would be relegated to capitalist hell.  That's what he means.  Their actions betray what they really believe.

          "Hatred is never appeased by hatred in this world. By non-hatred alone is hatred appeased. This is a law eternal."

          by sujigu on Sat May 11, 2013 at 06:08:45 PM PDT

          [ Parent ]

        •  whether the Republican donors believe Keynes (2+ / 0-)
          Recommended by:
          Naniboujou, OhioNatureMom

          or not, they don't want generalized prosperity.

          •  Partly because they believe that economics (0+ / 0-)

            is unavoidably zero sum, and the only way to equalize economic conditions, or at least make them more fair, is to take away money from the rich, whom they like to call the "productive class", i.e. "job creators". Never mind the fact that labor is vastly more productive than owners, but economics is not, or need not be, zero sum. A certain amount of wealth redistribution, done properly, can actually "make the pie bigger", thus restoring much of what was "taken" from the wealthy to give those who are not wealthy a decent living and conditions.

            They're not just greedy, heartless and mean. They're also kind of dumb.

            "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

            by kovie on Sun May 12, 2013 at 07:05:01 AM PDT

            [ Parent ]

            •  kovie - conservatives don't believe in zero sum (0+ / 0-)

              economics. That has never been  the view of the Milton Friedman or other free market economists. Rather it seems to be progressives who believe in a zero sum economy, at least that's what I read here at DKOS every day.

              "let's talk about that"

              by VClib on Sun May 12, 2013 at 08:04:55 AM PDT

              [ Parent ]

              •  Nonsense (0+ / 0-)

                Progressives are for growth, so long as it's fair and shared--stimulus was all about promoting growth. It's conservatives who care less about real growth and more about keeping as much for themselves, even if it leads to economic decline overall. Which is why it's really more apt to call them regressives.

                "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

                by kovie on Sun May 12, 2013 at 10:39:35 AM PDT

                [ Parent ]

                •  The central principle of free market economics (0+ / 0-)

                  is driving growth. You can argue that as practiced in the US it has not led to rapid growth, but from a theoretical perspective all of the free market economists have been strongly pro-growth. It is really the foundation of their economic models.

                  "let's talk about that"

                  by VClib on Sun May 12, 2013 at 05:09:39 PM PDT

                  [ Parent ]

            •  Not dumb, protecting their interests (0+ / 0-)

              as they see them.
              It's not that they don't understand the economics, it's that they have different aims.

              It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests.  But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders.  Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the 'normal' capitalist  system.
              Quote is from paragraph II.4 of Michal Kalecki, "Political Aspects of Full Employment". This very interesting short pamphlet was being much discussed in Britain while I was visiting there a few months ago. It was written by a Polish economist near the end of WWII and is very relevant to our current situation. It's worth reading all the way through.
      •  I'm not sure that Keynes was right, but he will be (1+ / 0-)
        Recommended by:
        Words In Action

        The ultimate constraint on prosperity was energy.  In our lifetime, that constraint will no longer hold.  When our economy is no longer dependent on scarce fuel, but generates basically free energy from the sun and wind, then he will be right.

        Everyone keeps saying the end of oil, not realizing what the future really holds.

        •  end of oil likely to preclude solar transition (0+ / 0-)

          When you run out of cheap fossil fuel energy, it might not be possible to build solar panels and wind turbines at all, never mind mass produce them.

          That's the real danger, that the end of oil ultimately leads to the end of industrial civilization.

    •  two different languages. Absolutely (2+ / 0-)
      Recommended by:
      psnyder, Words In Action

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Sat May 11, 2013 at 04:31:04 PM PDT

      [ Parent ]

    •  I'm sorry no (11+ / 0-)

      There is such a thing as causation in economics and you CAN prove someone wrong in economics.  It's not complete voodoo.  The problem is to prove something requires enough understanding to see the causation.  

      They believe Keynes was wrong for all kinds of reasons, but you have to look at what Keynes represented to them and what it is Keynes wanted for society that conservatives hate.  You should see the conservative view of labor leaders in the earlier part of this century to get the idea.  "You want the people working under us to take control?  That'd be like letting a monkey drive a car!"

      "Hatred is never appeased by hatred in this world. By non-hatred alone is hatred appeased. This is a law eternal."

      by sujigu on Sat May 11, 2013 at 06:01:50 PM PDT

      [ Parent ]

      •  Their opposition to Keynes was ideological, (0+ / 0-)

        moral and personal, not technical, even though it was presented as such for intellectual cover. They just didn't like the idea of having their taxes raised to eventually pay for deficit spending that helped OTHER, non-deserving people, even if that spending ending up benefiting them in the end and giving them a higher income even with higher tax rates. Just as we reject "tax cuts that pay for themselves", because there's no such thing (at least at current rates), they reject tax increases that pay for themselves, even though the ones Keynes supported do that in the end. They're just stingy and mean, and are interested in protecting their money, not growing the economy or helping others.

        "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

        by kovie on Sun May 12, 2013 at 07:11:13 AM PDT

        [ Parent ]

    •  The real problem, and your comment (1+ / 0-)
      Recommended by:
      ozsea1

      seems to come close to saying it, is that economics is no science at all. It is fraud, which is why R&R continue to be accepted as "professionals," having been caught red-handed engaging in carnival tricks no "scientist" could survive being caught at. Based entirely on unsupportable weightings of data from selected countries... this is the essence of modern economics. In economics, in the 21st century, in a mass culture in which neoliberalism is no more than another form of televangelism charlatanism... it's a religion that bears no scrutiny and requires none either.

      From here on out, no one can escape the havoc wrought by the unmitigated Class, Climate and Terror Wars.

      by Words In Action on Sat May 11, 2013 at 08:51:30 PM PDT

      [ Parent ]

    •  I understand that an attorney must (1+ / 0-)
      Recommended by:
      Eric Nelson

      argue different and opposing viewpoints equally well; here, it's left the distinctive sound of false equivalence.

      Read downthread. The jury is unpersuaded.

      The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

      by ozsea1 on Sat May 11, 2013 at 10:17:38 PM PDT

      [ Parent ]

    •  Pffft! I offer 30 years of Trickle Down (3+ / 0-)

      giving us what we have now to counter the: 'well, it's all just words and you can't tie them to experience.'

      And throw the spotlight on Austerity (that is, reduce the public sector.)

      It's not a he-said, she-said, thing. The thing is either an apple or it isn't.

      The results are obvious. And the Conservatives, when you look at their entire palette of stated concerns, clearly prioritize keeping the ordinary person in subservience and compliance. Where they don't have the decency to just die off.

      No, they know what's what. Now whether when they lie, do they beat down their conscience enough to 'believe' their lie? Sure, sometimes that happens. The rest have no doubts.


      Actual Democrats is the surest, quickest, route to More Democrats

      by Jim P on Sat May 11, 2013 at 11:41:39 PM PDT

      [ Parent ]

  •  I Think That's More Effect Than Cause. (9+ / 0-)

    Regulated economy can only provide those solutions by constraining the greatest possible concentrations of wealth and income.

    That's what the rightwing finds intolerable. They're about recreating what FDR termed economic royalists.

    Actual conservatives, here 50 years ago and still around the rest of the world, are fine with those constraints.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sat May 11, 2013 at 04:03:04 PM PDT

  •  The object of austerity is austerity. n/t (5+ / 0-)

    Ceterum censeo Factionem Republicanam esse delendam.

    by journeyman on Sat May 11, 2013 at 04:10:02 PM PDT

  •  He opened the door a crack (8+ / 0-)

    It opens on a future of humanity where the rich no longer ride on palanquin's carried by the poor. In that future there is yet a distinction, but the two walk down the road together.

    Those who still enjoy their litters are stacked 10-deep holding that door closed.

    "Every book is like a door"

    by Hammerhand on Sat May 11, 2013 at 04:49:17 PM PDT

  •  For most of its history (3+ / 0-)
    Recommended by:
    rbird, slowbutsure, PrahaPartizan

    The Republican party has had nothing against Keynsian philosophy. It was Lincoln who expanded railroad grants, and Eisenhower who built much of the highway system. Although the party has always favored the rich through its policies, it was not until the days of Barry Goldwater when it adopted the "small government" attitude.

    Republicans are far more socialist than Democrats. Just because they want to redistribute the wealth upwards does not make it any better.

    by MrAnon on Sat May 11, 2013 at 05:01:05 PM PDT

  •  Why do so many progressive economists (1+ / 0-)
    Recommended by:
    Nada Lemming

    especially ones close to the president, hate Keynes?  Fuck the Republicans.  They're just part of the bandwagon.

    •  They aren't progressive economists. They (5+ / 0-)

      are Third Way neoliberal centrists. They are the clan leaders in Braveheart, selling out their Scottish kinsman and their country for personal gain. And the average centrist Democrat loves them. Truth be told, on matters involving money, they have more in common with Republicans than they do with the rest of the Left.

      From here on out, no one can escape the havoc wrought by the unmitigated Class, Climate and Terror Wars.

      by Words In Action on Sat May 11, 2013 at 08:58:29 PM PDT

      [ Parent ]

  •  "They hate Keynes because his suggested policies.. (13+ / 0-)

    ..do work" - yes

     Even Paul "austeruty" Ryan knows it.

    Paul Ryan advocates Keynesian economics on government spending stimulus video from UP Chris Hayes  

    “You have to spend a little to grow a little…What we’re trying to do is stimulate that part of the economy that is on its back”

    Democrats supported stimulus under GWB but republicans refuse under Obama. Republicans have proven they will wreck the economy to gain power. They don’t  deserve are unqualified to lead the country in any office top to bottom.

    Up with Chris Hayes version (with short commercial - sorry)  and further discussion of why it matters that Ryan once supported stimulus spending.

    What would a party that wins office by scaring people with lies about how immigrants are going to take their jobs or black people are going to take all the welfare or other nonsense do if nobody was scared?
     - citizen k
    Exactly, republicans know Keyene's ideas work, it's just that in order for the very few plutocrats to stay on top of the many in their fucked up belief that a "proper society" must have it's aristocracy, it's nobles - the deserving few - fear is their chosen weapon to secure enough of the RWNJ base to support them.

    Thx citizen k
     http://www.msnbc.msn.com/...

    And from mediaite web site
     http://www.mediaite.com/...

  •  Keynes represents public policy that favors the (7+ / 0-)

    many instead of the privileged few.  It's spelled out a little bit in this quote.

    I believe that we are at the threshold of a fundamental change in our popular economic thought, that in the future we are going to think less about the producer and more about the consumer. Do what we may have to do to inject life into our ailing economic order, we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.

    --- FDR, not Keynes, May 22, 1932

    From industrialization, approx. 1880 to the start of FDR's administration, there was a back and forth struggle between the privileged few and the many. Maybe it was clearer at that time that a few wealthy predators could do a lot of damage to people and to the stability of the nation.
    The collective power of the people expressed through the government was the only protection that could stand up to the tremendous power of concentrated wealth.

    FDR's quote hints at the formula needed to create a broad and prosperous middle class.  It doesn't happen by itself.   Progressivism must have a seat in the government working for We the People who create consumer demand and jobs so that prosperity spreads itself horizontally.  

    The interests of the privileged few hate this system.  We call them conservatives and they find a home in the Republican and Libertarian parties.  

    There is no existence without doubt.

    by Mark Lippman on Sat May 11, 2013 at 05:45:36 PM PDT

  •  I think we forget politicians aren't economists (4+ / 0-)

    They don't believe or study it like real economists, and many "real" economists are not data driven.  They are just looking for the next paper to get their PhD or rub elbows with hedge fund managers, depending on their ideological bent.  

    Politicians are salesmen.  That's how they got the job, like it or not.  Economists give them legitimacy to stay in their jobs if they can sell it right.  That's why hypocrisy rolls off their backs.  Paul Ryan thinks corporate subsidies, tax breaks, and stimulus are just fine before he has to rail against them at the Atlas Shrugged convention.  He doesn't think ideologically, he thinks about what will put him back in his seat the next cycle.  

    "Hatred is never appeased by hatred in this world. By non-hatred alone is hatred appeased. This is a law eternal."

    by sujigu on Sat May 11, 2013 at 06:13:43 PM PDT

  •  For the same reason as corporate Dems (2+ / 0-)
    Recommended by:
    lostinamerica, countwebb

    they fear that liking Keynes might result in sharing some of the winnings they currently get to keep now, due entirely to government policy and mass cultural attitudes, with others.

    From here on out, no one can escape the havoc wrought by the unmitigated Class, Climate and Terror Wars.

    by Words In Action on Sat May 11, 2013 at 08:42:41 PM PDT

  •  market crashes create enormous wealth (2+ / 0-)
    Recommended by:
    PrahaPartizan, Eric Nelson

    for those who have capital.

    "The time to make a fortune is when the blood is running in the streets."

  •  There are no Conservatives (0+ / 0-)

    Edmund Burke, the Father of Conservatism, favored religious toleration and government spending, among other Progressive positions on the issues.

    There are the rich and powerful who are not content unless they are many times richer and more powerful than everybody else, and the racists, bigots, misogynists, gun nuts, and Mammonites whom they can con into voting for more tax cuts, more subsidies, and fewer regulations, all based on Republican strategist Lee Atwater's promise that

    Blacks get hurt worse than Whites.

    Ceterem censeo, gerrymandra delenda est

    by Mokurai on Sun May 12, 2013 at 06:12:19 AM PDT

  •  My observation is that economics is useful for (0+ / 0-)

    reports. Most economists have a mastery of statistics, or at least access to high-quality statistical software, so they can run accurate analytical reports on their collected data. This information is useful, as all policy makers should understand the current situation before they decide how to proceed.

    I voted with my feet. Good Bye and Good Luck America!!

    by shann on Sun May 12, 2013 at 06:41:31 AM PDT

  •  But isn't it the opposite? (0+ / 0-)
    Adam Smith pointed out that if the government kept interest rates low the markets would favor well thought out investment, but if rates went up too high investors would speculate and harm national prosperity (ahem, Lehman Brothers).
    When rates are too low, excessive speculation ensues, as in the 00's, but when they're higher, more real investment happens, as in the 80's & 90's. When money is too easily available, barring prudent regulation and strong oversight, it tends to get abused in dangerous speculation.

    This can be said of almost anything, really.

    Doesn't take away from Keynes' ideas, though. But Smith was talking about the supply side, not the spending side, which Keynes was, in this instance. In a recession, you want rates to be low, of course. But you also want money to be spent, especially on stimulative activity, and not speculated with. A strong and healthy economy depends on more than just rates, then, but also smart spending, on stimulus and growth, and on prudent regulation.

    Also, jackboots, black helicopters and FEMA camps. Gotta have those.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Sun May 12, 2013 at 06:53:13 AM PDT

    •  bank rates were low (1+ / 0-)
      Recommended by:
      kovie

      but CDOs are fundamentally loans.  Smith suggested that the government forbid loans at interest rates too far above the minimum in the market. The theory was that anyone offering rates significantly above minimum was not operating a prudent business - certainly something one can say about  high interest rate  tranches on CDOs or liar loans with enormous balloon rates.  Consider also the interest rates offered by Baine Cap on the dividend recap bonds they sold.

      Suppose we taxed interest on loans more than 2% above some index at 90% and made contracts with collateral in those cases non-enforceable.

      I'm not sure how much real investment happened in the 80s or 90s, but Smith's point is that sensible market regulation is needed to direct investment into productive avenues and away from speculation. Keynes also addressed this very issue  and argued that lending money should be made to be a low return occupation.  This is an aspect of Keynes proposals that is rarely referenced. Keynes argument is that if you want higher returns you should openly invest.

      Since Keynes and certainly since Smith, the lines between investing and lending have been made more complex, but the point I was really trying to make, which you got, is that even as far back as Smith, economists knew that governments should regulate markets for public prosperity.

      self-appointed intellectual cop

      by citizen k on Sun May 12, 2013 at 07:42:50 AM PDT

      [ Parent ]

      •  As you may or may not know (0+ / 0-)

        I'm basically a Hamiltonian wrt economic, monetary and fiscal policy, obviously adjusted for the past 200+ years of economic and financial developments and understanding. I.e. I'm a fan of the "American System" envisioned by Hamilton and championed and implemented by Clay, Lincoln, TR, etc., that favors direct government intervention and investment in, and regulation of, the economy, including its financial system, when, where and in a way that makes sense, to promote shared prosperity and the common good.

        Over time this came to include adding welfare state components to ensure that no one would sink below a certain level (obviously not fully implemented yet), especially under FDR, but also under previous administrations. In one form or another, such a system, when adopted, has proven to be the best one in terms of benefiting the largest number of people, and not just the rich. But it's also proven to be the most sustainable one in terms of macroeconomics.

        I think that Keynes basically took this system and proposed enhancements and adjustments to account for major economic downturns. In essence, it's the best real-world system that anyone's ever come up with, however imperfect.

        "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

        by kovie on Sun May 12, 2013 at 10:36:16 AM PDT

        [ Parent ]

  •  Another reason they hate Keynes (0+ / 0-)

    Jonathan Chait explains it admirably here.

    Here's my too-short summary:

    People tend to think of liberal and conservative philosophies as mirror images. But they're not. The big difference: conservatives have a fundamental, unshakeable belief that smaller government is the ultimate ideal in and of itself. All of their economic reasoning flows backward from this goal. Facts are ignored or explained away if they don't fit the narrative.

    By contrast, liberals don't have a similar goal of bigger government for its own sake. It's only a means to the desired end of improving people's lives. They're willing to look at the evidence, to experiment, to try things and, if they don't work, change them. As Chait says, "Contemporary economic liberalism is less of an ideology than the absence of one."

    Chait gives a beautiful example of how this applies to the health care debate. Conservatives chant endlessly that the U.S. has the best health care system in the world. By any objective criteria, this is completely absurd:

    The only way to deem the U.S. system the "best" is if you substitute ideological criteria for pragmatic criteria. Our health care system is indeed the best at minimizing the role of government. France, on the other hand, produces better measurable health outcomes at a vastly lower cost. Yet conservatives would consider the notion that France has a better health care system than the United States to be self-evidently false.
    But, you know, facts have a liberal bias.

    What is valued is practiced. What is not valued is not practiced. -- Plato

    by RobLewis on Sun May 12, 2013 at 08:20:19 AM PDT

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