I don’t know what it is about the Nobel Prize that makes economists fall in love with John Maynard Keynes, but once again I see a Nobel winner trying to convince us that the Keynesian package is sound economics. This time it is Joe Stiglitz throwing idiocy at us in the name of economic authority.
While most of his article is pretty bad, he manages to outdo himself here:
During the Great Depression, similar arguments were heard: government need not do anything, because markets would restore the economy to full employment in the long run. But, as John Maynard Keynes famously put it, in the long run we are all dead.
Markets are not self-correcting in the relevant time frame. No government can sit
idly by as a country goes into recession or depression, even when caused by the excessive greed of bankers or misjudgment of risks by security markets and rating agencies. But if governments are going to pay the economy’s hospital bills, they must act to make it less likely that hospitalization will be needed. The right’s deregulation mantra was simply wrong, and we are now paying the price. And the price tag–in terms of lost output–will be high, perhaps more than $1.5 trillion in the United States alone.The right often traces its intellectual parentage to Adam Smith, but while Smith
recognized the power of markets, he also recognized their limits. Even in his era,
businesses found that they could increase profits more easily by conspiring to raise prices than by producing innovative products more efficiently. There is a need for strong anti-trust laws.
This is most interesting. We are hearing the need for another “New Deal,” but the New Deal was all about the government creating cartels and limiting output. But, now we have Stiglitz telling us that the trouble is those damned markets and not enough anti-trust.
Oh, like his good friend and partner-in-crime Paul Krugman, Stiglitz rewrites the history of the Great Depression. The problem was that the markets did not correct because the government blocked both the correction and the recovery. But, being a Nobel winner means one does not have to stick with the truth when fabrications will do just fine.
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Stiglitz is a trustee here at Amherst College, and I just ate lunch across the table from him last week. Needless to say, it was difficult not to contort my face in disgust when looking at him.
He seems to be also rewriting Adam Smith.
Are we allowed to send Nobel prizewinners back to undergraduate school and make them repeat Econ 101 until they get the simplest facts through their thick heads?
Let us not forget that all this government management of the economy requires technical experts to advise the politicians. The Keynesian revolution elevated the role of “economists†in society, greatly increasing their prestige, power, influence, and employment opportunities. As a result, acknowledgement of the facts, logic, and pursuit of the truth are, unfortunately, nothing but outmoded principles for most economists.
Keynesian and mainstream economists largely have devolved into paid apologists for a cesspool political system.
“No government can sit idly by as a country goes into recession or depression, even when caused by the excessive greed of bankers or misjudgment of risks by security markets and rating agencies.â€
Amazing that there is absolutely no mention of: (1) the Fed flooding the credit markets with large amounts of loanable funds created out of thin air a few years ago; (2) the federal government’s arm twisting of lenders to make risky loans to certain political pressure groups; and (3) the socialization of risk that resulted from the government’s backing of Freddie and Fannie.
Well, at least Stiglitz was correct regarding the “misjudgment of risks by security markets and rating agencies.†However, given his crucial omissions and the fact that he is obviously quite intelligent, I can only conclude from Stiglitz’s statement that he is not a truthful person and lacks integrity.
It’s good to see that the discussion is completely above personalities, and just focussed on the clash of ideas. For anyone interested in knowing what Keynes was actually about – not how is often caricatured as – why not read a good biography of him, such as by Donald Moggridge (“An Economist’s Biography”) or Robert Skidelsky (there volumes, and a condensed version), or Donald Markwell’s “John Maynard Keynes and International Relations: Economic Paths to War and Peace”. Keynes is much more favourable to free markets and free trade, and more concerned about inflation, than he is often presented as being.
It’s good to see that the discussion is completely above personalities, and just focussed on the clash of ideas. For anyone interested in knowing what Keynes was actually about – not how he is often caricatured as – why not read a good biography of him, such as by Donald Moggridge (“An Economist’s Biography”) or Robert Skidelsky (three volumes, and a condensed version), or Donald Markwell’s “John Maynard Keynes and International Relations: Economic Paths to War and Peace”. Keynes is much more favourable to free markets and free trade, and more concerned about inflation, than he is often presented as being.
Tuesday, October 28, 2008
Nobel Prize For Wackonomics!
So there we have it:
This year’s Nobel Prize for Wackonomics goes to Paul Krugman.
That award (so-named) would be acceptable and even expected. But instead we have the profession of economics degradingly drug through the slime and stench of pseudoscience, resulting in a declaration of Paul Krugman as the Nobel Laureate in Economics for 2008.
I guess there is a silver lining. It is clear and evident that the economy is dying from the mistreatments administered by the economic charlatans. This chronic illness has reached a feverish and life-threatening condition all around the world in 2008 because of the total idiocy of the ‘economists’ that are ‘distinguished.’
Who better to receive the Nobel Prize in 2008 than Paul Krugman, the single-most idiotic of all economic spokespersons! No wonder we are in an econommic meltdown! Paul Krugman’s economics is wackonomics and it is toxic.
Thursday, October 16, 2008
Keynes And Krugman Are Economic Charlatans.
The Keynesian imp that wrote the Washington Post article (‘We Forgot Everything Keynes Taught Us”)
forgot what Keynes himself said “We’re all dead in the long-run.”
Keynes would not have seen ‘it coming’ because ‘it’ is merely the economic meltdown of the Keynesian long-run.
John Maynard Keynes was an economic charlatan and a panderer to the political class. His secret love affair with socialism is evident in his ‘theory’ which is devoid of any understanding of capital or capital structure.
If alive today Keynes would act like Paul Krugman, completely oblivious of the real world yet decorating himself with the bells and whistles being showered upon him by the clueless and corrupt. Keynes and Krugman are the heros of the ego-driven interventionists.
Ron Paul and Ludwig von Mises are the heros of the righteous!
to lionel roberts:
i think skidelsky and other biographers glossed over some inconvenient truths.
check out “dissent on keynes” (chapters 9 and 11, by gordon and rothbard), and also “was keynes a liberal?” by ralph raico. both are in pdf format in the literature section.
Mr. Roberts,
As a follow-up to newson’s comment, here is the first and part of the last paragraph of Murray Rothbard’s essay “Keynes, the Man” which I believe is an accurate assessment of Keynes’s character and beliefs.
“John Maynard Keynes, the man—his character, his writings, and his actions throughout life—was composed of three guiding and interacting elements. The first was his overweening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego. The second was his strong sense that he was born into, and destined to be a leader of, Great Britain’s ruling elite. Both of these traits led Keynes to deal with people as well as nations from a self-perceived position of power and dominance. The third element was his deep hatred and contempt for the values and virtues of the bourgeoisie, for conventional morality, for savings and thrift, and for the basic institutions of family life.â€
“Yet Keynes was much more than a Keynesian. Above all, he was the extraordinarily pernicious and malignant figure that we have examined in this chapter: a charming but power-driven statist Machiavelli, who embodied some of the most malevolent trends and institutions of the twentieth century.â€
What we need here at Mises is an “Ig-Nobel Prize” for economics! It seems we have a few contenders. I would like to nominate Ben “Blow-a-bubble” Bernake. Even though the curtains have been drawn back, the wizard remains un-touched by the mainstream. Some how we seem to be concentrating on the specter of the great and powerful Oz before us and the wicked witch of the un-bridled free-market failures. How does he do it?
Come on everybody! Close your eyes and tap your heels together three times and say, “There’s no money like gold. There’s no money like gold. There’s no money like gold.”
Dennis you stole my thunder twice. Bravo.
Bruce: “The Keynesian imp that wrote the Washington Post article (‘We Forgot Everything Keynes Taught Us”) forgot what Keynes himself said “We’re all dead in the long-run.”
And the the Post runs this: “The new capitalist model that emerges from this crisis must operate according to more consistent principles. The Fed should set interest rates with the long-run value of the dollar in mind. Government must be more selective about manipulating markets; over the long term, business works best when it is subject to market discipline alone. In those cases — and there will and should be some — in which government intervenes on behalf of social goals, its support must be counterbalanced with taxpayer protections and regulation. Government-sponsored, upside-only capitalism is the kind that’s in crisis today, and we say: Good riddance.”
That’s a section from Is Capitalism Dead?
The market that failed was not exactly free”" from Monday, October 20, 2008; Page A14.
I nearly lost my teeth when I read that. Why is it that a socialist rag like the Post gets it but the WSJ can’t? Is the end of the world near?
Wasn’t that Keynes quip about long-run death in response to criticisms of his policies creating inflation?
Well, we are living in the long run today. Thanks to the mercantilist/New Dealer/Fascists we are now bailing out the fraudbanks to the tune of $1 trillion plus this year, and we have total government liabilities of nearly $60 trillion.
In 40 years, the people of Hong Kong went from living standards lower than rural India to higher than urban London because of free markets and low taxes. What could we have had in America but for Keynes and his followers?
Did anyone read the NY times magazine today (Sunday the 2nd) and the interview with James K. Galbraith? If anyone has I would love to hear any comments!
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