I grew up hearing about the deprivations of the Great Depression from my parents and grandparents. But I took comfort in the fact that because governments now understood Keynesian economics, I didn’t have to worry about a repeat of that experience.
That’s why I’ve watched in perplexity and frustration as the Republicans have trashed Keynesian theories as the way to get us back on track after the Great Meltdown.
But I finally get it — it’s not that they reject John Maynard Keynes, it’s that they reject Barack Hussein Obama. It pure politics, not economics.
Mitt admitted as much when he recently said that you can’t do big budget cuts in the near future without throwing the economy back into recession.
If Mitt wins, suddenly we’ll all be Keynesians again.
Don’t count on it. For the Republicans to accept Keynesian economics it would require them to reject supply-side (Reaganomics). That won’t happen. They do become “limited” Keynesians when they want to spend money on targeted special interests, such as bailing out banks, denense contractors ect. But I would call this more crony capitalism as opposed to Keynesian economics. I think if Mitt wins, and he get a Republican controlled congress, we will see one final attempt at supply-side tax cuts being pushed through. This round will be bigger than Bush’s, which were bigger than Reagan’s tax cuts (in total lost revenues). They have convinced themselves that the Bush policy failed only because it wasn’t “conservative” enough. Therefore, they must adhere more closely to the “free market” dogma, just like in any other religion. After the final economic collapse occurs, and the majority of the people have suffered for several years in a depression, then they may realize that supply-side is nothing more than a wealth redistribution system from the middle class to the ultra-rich. Then we may see a turn back to a Keynesian model which is a wealth redistribution system that favors the middle class. People need to understand that all governmental economic policy will be a wealth redistribution program. Then they need to ask themselves which way do they want it to go. Up to the few or down to the many. I thought 2008 might have been the turning point. When Obama talked about being a transformational President like Reagan and FDR, this was a direct reference to how these two had changed the country’s economic philosophy. Obama wanted to transform it back towards Keynesian, and did for his first couple of years with some targeted supply-side tax cuts to get a few Republicans and blue-dog Democrats on board. But after the 2010 mid-terms the Tea Party put the brakes on the transformation. We have half the country that still buys into supply-side and half into Keynesian.
Thank you for taking the time to post the long and thoughtful comment.
It drives me crazy when the GOP talks about Obama’s wanting to redistribute wealth as if somehow our wealth has remained pure and un-redistributed up until now. As you say, all of our policies redistribute, it’s just a question of from whom/to whom. The capital gains rate has been all over the map since 1913. Our energy policies “redistribute” wealth to the oil companies. The absurd decision not to tax “carried interest” as ordinary income redistributes wealth to people like Mitt, who don’t need it.
I would like to educate our fellow citizens so we can get back to a system that favors the middle class without first suffering a depression.
I agree we need to educate more people. The reason we became an economic super power was because we built a vast middle class with spending power. It it is good for everyone.when you have a large consumer base that is demanding your product or service. Stop by my site sometime and check out what I have written and share with as many people as you can. Be foreworned, my posts are not short. I like to get into depth on topics. But I also post a travel photo of the day to lighten it up a little. My site is politonomicsandtravel.wordpress.com
Thanks, I will check out your site, and I appreciate your visiting mine.