Tuesday, March 03, 2009

The Wrath of Keynes, part 2

A writer in the Las Vegas Review Journal notes the odd resurgence of Keynesian economics.  The key paragraphs:
In brief, Keynesianism -- as set forth by Keynes 73 years ago in his "General Theory of Employment, Interest and Money" -- holds that the twin answers to unemployment and economic downturns are massive government deficit spending and "cheap money" -- the artificial driving down of interest rates to "free up more credit."

This is relevant because this precisely describes the massive and inherently inflationary market interventions that have been brewed up in Washington since the middle of last year, sponsored as enthusiastically by Republicrats as Demopublicans -- despite the fact that Mr. Hazlitt, way back in 1959, demonstrated not only that these Keynesian remedies did not work, but that they often had precisely the opposite effect of that intended!

I guess great minds think alike. 

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