Saturday, December 28, 2013

Blunt Force Dogma

Keynesian analysis is as about as blunt an instrument that exists. a) It only looks at aggregates and b) it essentially treats all forms of spending equally (digging holes and filling them providing the same form of economic stimulus as capital investing, for example)..............................................................................So, with the passing of Smoot-Hawley, for example, they would strictly look at the fact that imports and exports represented only 4.2% and 5% of the U.S. economy and fail to see that there was also a massive difference between the states regarding this (the fact farm and steel states were disproportionately affected by this and that this in fact was where many of the early bank failures happened)....Or even with federal spending in general/wasteful spending - as long as it adds to the overall aggregate demand they like it and it doesn't matter one iota if it distorts the market, blows a hole in the deficit, creates more cronyism, throws more taxpayer money down a rat-hole, etc.. I mean, it's almost as if these people have never actually looked at the real world and seen just how pitiful of an approach that this is; Hoover, FDR, Bush 2, Obama, Japan in the '90s, the fact that socialism practically annihilated the Argentinian and Swedish economies (Sweden to its credit righted the ship in the '90s and instituted much more free market policies) back in the '60s and '70s, etc.. Heaven help us if these folks ever get yet another bite at the apple.


dmarks said...

Socialism is really nothing more than the current version of the age-old divine right of kings: a pseudo-scientific justification for the very regressive idea of the people's subservience to the rulers, an an attempt to do away with the very real progress in concepts of human rights and individual dignity that has evolved over the past few hundred years. There's nothing new under the sun, and an ancient Pharaoh of Egypt has so much in common with modern socialism. Those who crush you, steal from you, abuse you, and deny your basic rights and get away with it because they fool enough people that it is destiny, for their own good, or other such crap.

Will "take no prisoners" Hart said...

Sweden was the 4th wealthiest country on the planet in the 1950s and by the time that socialism had gotten a hold of it it had plummeted to 17th. And in Argentina the results were even worse.......Compare that to Sinapore, Chile, Taiwan, Monaco, Hong Kong, Estonia, etc. that have embraced a much more market oriented economy and the results are even more telling.