May the Invisible Hand bless Austrian-schoolers & their laughably unearned hubris.
In 20141 Hunter Lewis @ the redundantly-named Against Crony Capitalism proved he had his finger on the pulse on economics by revealing the communistic secret Keynesians have been hiding from us in their dark-gray submarines: they used the “D” word.
That word is not, “dumbshit,” “dipship,” “douche bag,” or any other colorful term, but “depression.”
Most Keynesian economists do not want to admit that we are in another depression. They find the word painful.
Somehow, 1 o’ the most famous modern Keynesians, Paul Krugman, was able to withstand this agony to write 2 books—The Return of Depression Economics and the Crises of 2008 & End this Depression Now!, the latter o’ which predicted the depression before it happened—with these dreaded eldritch words. Please send your regards to the hospital in which he currently resides as he recovers.
‘Course, anyone with a minuscule knowledge o’ history—not the uneducated audience that Austrian-schoolers love to exploit—would know that Keynes became famous ’cause o’ the Great Depression; they’d remember that Keynesianism didn’t exist till the economy was already ruined by neoclassicalism & their dumbass paradoxical name. Such people would find Austrian-schooler’s claim that Keynesians are ‘fraid o’ the word “depression” ’bout as absurd as the claim that Marxists fear the word “exploitation” or that Christians fear the word “prayer.”
‘Course, the normal reaction to works o’ Austrian-schoolers is to laugh & go, “¿Are you fucking high, man?” That’s what makes it so entertaining.
They find it painful because it contradicts the idea that Keynesian economic ideas have ended depressions forever.
“…in the version o’ Keynesianism that resides purely in my fantasies.”
It also contradicts the idea that the massive and continuing Keynesian stimulus applied by world governments since 2008 has worked.
(Laughs.) ¿“World governments”? ¿You mean the ones in that postapocalyptic thriller you’re writing? Since there’s only 1 world with significant human societies, how are there mo’ than 1 “world governments”? ¿Or is he referring to regular national governments that happen to exist within the world, like just ’bout all human stuff? ¿Does he also call economies “world economies” or schools “world schools” to distinguish them from the intergalactic variety?
Considering the depression is blamed on neoclassicals, I don’t see how this proves anything gainst Keynesians. But then I keep forgetting that “neoclassicalism” doesn’t exist & is just a conspiracy theory drummed up by all those economist haters who be hating. In truth, neoclassicals’ supremacy is due to their superior intellect to both Keynesians & Austrian-schoolers: they’re smart ‘nough to avoid attention as much as possible, knowing that no matter what they say, the economy’s still going to be puke, anyway, since people are just going to believe their own superstitions & rich people & government officials are just going to exploit this for fast cash. ¡Like Misesians!
I argued that we were in a depression in a January article and again in April.
Well, aren’t you special.
I fucking love narcissists who act like they’re the only ones talking ’bout whatever trite bullshit they puke. Come the fuck on. ¿You know who else has been saying we’re in a depression since then? My high-school-dropout parents & siblings. I don’t see them asking for the “King Obvious 2015” award.
…Brad DeLong, one of the most prestigious Keynesians…
All right: now we’re just outright lying here.
These are after all the people who call the government creating money out of thin air “quantitative easing,” “ bond buying,” and the like…
I’m quite sure Keynesians—as well as most economists—would agree that would be called magic, since it’s impossible to create anything from thin air. ‘Gain, you shouldn’t mix up authentic governments with the warlock governments in your fantasy airport novels.
Ironically, Keynesians will be the 1st to tell you that the government doesn’t have control over how much money is created2 & that, thus, attempts by the government to do so are futile. What he’s describing is Monetarism, which was created by laissez-faire libertarian Milton Friedman.
When Keynes did this, he was often being impish, as when he called newly created money ““ [sic] green cheese,” echoing the old nursery nonsense that “the moon is made of green cheese.” His acolytes have adopted the style of dissimulation, but without the slightest trace of a sense of humor.
(Laugh.) ¿What the hell is this guy babbling ’bout? ¿Did he read The General Theory? ‘Cause I did, & if this shit’s in it, it’s tucked far into a corner. “¡Damn Keynes & his green-cheese standard! ¡It’s just a way to deter savings by having money that goes moldy!”
¡How absurd o’ anyone to treat pieces o’ paper people made up as having any value divergent from that set in stone by God himself!
Although we are in a depression, it is not a depression for everyone, as is by now well known. Even so, the full hit on the middle class and the poor relative to the affluent is not adequately understood.
As opposed to the usual depressions where everyone suffers. What Lewis describes here is less the vile deeds o’ Keynesians & mo’ “economics as usual,” ‘less he can give me some situation—’gain, not including his personal historical fiction ’bout the glorious agrarian colonies o’ the 18th century—wherein poor people & rich people were treated the same. That’s ’cause the very definition o’ “rich” & “poor” is that 1 has mo’ economic benefits. “Poor” literally means “person who gets fucked o’er, economically”; if one isn’t, then one isn’t truly “poor,” ¿now are they? So ‘less he’s attacking the existence o’ economic classes—in which case I am befuddled by this magical “communistic capitalism” he seems to support—I don’t see what his prob—
Wait. ¿Is this ‘nother Marxist troll? ¿Are these Mises websites the equivalent o’ “Libertaripedia,” where every “member” is just a troll trying to sneak subversive info in? God damn it, I’m on to you sneaky commies.
He then plays the same card conservatives usually play: only accept data by certain people. Government data is untrustworthy, ’cause he says so, but data from a government official under the administration that got us into this depression in the 1st place isn’t. No rationale is given why: as is common with intellectually-authoritarian Austrian-schoolers, they decree, & you obey unquestioningly.
In Keynesian theory, it doesn’t matter whether money is spent or invested or what it is spent on or invested in. In this cockeyed view, spending more money to put people into Medicaid, paid for by borrowing from overseas or printing new money, is just as good as Apple investing in new jobs.
Um, no: that’s paid by these things called “taxes.”
Also, the latter class can also be paid for by just borrowing, which can blow up in companies’ faces if the investment doesn’t turn out well, which can cause a ripple effect that also contributes to depressions. Lewis doesn’t make any solid argument, but just strawmen: he assumes Medicaid is an inferior use o’ money than Apple investment without evidence, despite the former being used to keep people ‘live & the latter being used to make o’erpriced, inferior software that exploits those ignorant o’ computers.
Lewis would probably respond that that’s my own mean ol’ opinion & that I shouldn’t push it onto people, while giving his own biased opinion on what’s valuable & what’s not & demanding that the government enforce this through property protection. The only difference is that I acknowledge my bias & am a’least attempting to put logic into my beliefs, while Lewis just accepts whatever the great market god says arbitrarily.
The fact that corporations like Apple benefit to some extent through monopolistic business politics backed by government-defended capital control alludes Lewis, who, rather than acknowledging the complex power conflicts & cooperations ‘tween numerous economic powers, whips up some simplistic fairy-tale “government bad, rich people good” yarn. Probably ’cause they share the same simplistic white-&-black morality as conservatives—what they defend on an appeal-to-consequences discomfort with moral ambiguity that truly masks their inability to understand moral complexity.
He also assumes that the options are either government spending & private investment, even though it’s just as much possible for both the government & businesses to spend li’l, causing less products to be bought, causing business to have low expectations o’ success from lack o’ demand, causing businesses to invest less, & so on in a vicious cycle we call a “depression.” Government intervention isn’t necessary for this to happen.
Just ’cause nobody likes governments, that doesn’t mean you can just blame them for everything & give competing power structures carte blanc without evidence & expect praise for your “genius.” That’s as if I said Hitler caused climate change & called anyone who disagreed with me Nazi-lovers.
So, no, Keynesians don’t assume government & private spending are the same; if they did, they wouldn’t support the former so much. Ironically, it’s the argument that they are the same—based on Say’s Law—that is oft used to argue that government spending has no effect on depressions. ‘Gain, Lewis reveals his ignorance o’ basic economic castes by mixing up Keynesianism & neoclassicalism. Much as Christian fundamentalists conflate Muslims, Mormons, Satanists, & Christians who celebrate Halloween, Lewis conflates anyone who doesn’t dry-hump Human Action as a part o’ the Keynes-Marx conspiracy so that it fits better with the narrative that already exists in his head o’ the brave Austrian-school rebels fighting gainst the vile Economics Borg.
As a result, the first quarter was initially reported with a minus 1% economic growth, then revised to minus 2.9%. One idea floating around is that the Commerce Department’s revision reflected a decision to make the first quarter look worse in order to move healthcare spending to the second quarter and thus make it look better. If so, why would the second quarter have been deemed more important? Because it is leading up to the fall elections. The second quarter is currently reported at 4.2%.
Sharp readers may also notice Lewis’s use o’ weasel words—an “idea floating” round—to add an unsubstantiated accusation o’ the government tampering with info. It’s 1 thing to be arbitrarily biased & illogical; it’s ‘nother to be so much so that one would fail a high-school logic course.
The destruction of common sense economics by Keynesianism is a major reason for what has happened to the American middle class and poor.
When one evokes “common sense,” one should almost always translate it as “mindless obeisance to tradition.” In this case, the “common sense” is that Keynesianism caused the depression by… ¿hiding it purportedly? ¿But how did it happen in the 1st place?
But our governing elites and special interests do not just love Keynesianism for its own sake.
“Special interests” should always be translated as “those other people I don’t like.” It’s quite clear from this article that Lewis & the Mises Economics Blog have special interests themselves, & thus should be included in that class, other than that they’d deny it ’cause… they say so. ¡So there!
They especially love the opportunity for crony capitalism that it affords.
& “crony capitalism” can always be translated as just “capitalism,” since every economic system in the world has & always will fit the special interests o’ those who control it. That’s what happens in a reality controlled by humans & not imaginary disembodied hands. I’m particularly bewildered by how people who support an economic system defined by selfishness could complain ’bout what is obviously inevitably inherent: people selfishly using whatever tools they can—including government force—to get what supports their “special interests.” That’s what “special interests” are: selfish interests—& they’re the core to capitalist competition: doing whatever one can to get one’s interests fulfilled.
Keynes himself was not financially corrupt, and would have been appalled to see the corruption he unleashed.
Citation needed.
Nor did our present problems arrive in 2007-08. They can be dated at least to the beginning of bubbles and busts during the Clinton administration and arguably even further back.
It’s not “arguably”: ¿has Lewis never heard o’ the Black Friday stock market crash o’ 1987?
Hilariously, he notes that the “economic growth cut the rate of poverty in half between the end of World War Two and 1964,” & argues that that “proves” redistributive policies hinder poverty ’cause that’s when the term “war on poverty” became popular. Not only does the graph the study he cites show poverty continuing to fall after the “war on poverty” began, stopping round when stagflation hit & rising through the era o’ the rise o’ neoliberalism & Reaganomics—with 1 noticeable dip round the end o’ Clinton’s presidency—he claims that this proves that “growth” is the true factor to ending poverty, which is meaningless by itself. I’ve never heard anyone say otherwise; the main argument is o’er how much growth can be realistically accomplished & how best to do so. Lewis certainly hasn’t provided any proof that his religion—¡join now & get 40% off all membership cards!—will create growth, though I’m sure he can easily whip up a nonfalsifiable argument to argue so on the fly.
More importantly, he ignores that during the 40s, 50s, & 60s, Keynesianism was the reigning economic philosophy, while laissez-faire was considered a fringe view. This was the era when a Republican president, Eisenhower, said, “Every gun that is made… signifies, in the final sense, a theft from those who hunger and are not fed.”
There are those among the top one and top ten percent of households who are working on this problem every day. They help the middle class and poor by working hard, saving, making wise investments, and hiring, or even by not investing or hiring until conditions are right.
& here we have ‘nother regurgitation o’ the benign capitalist aesop: worship the rich, & we’ll all win. Forgive me if I prefer Republicans who admit they think poor people are gross o’er smiling ditzes like Lewis.
¿Want to know the best part? According to data by Picketty—whose data is clearly tampered with, ’cause he’s part o’ the Keynes-Marx Borg—in the US, private capital was decreasing during the postwar boom, only to start increasing right round when poverty increased (public capital was almost reverse, rising after 1950 & falling round 1970). So it seems the best way to improve the economy is the opposite o’ what Lewis claimed. Big shock considering his tight argument.
I must confess, though: I do feel relieved that there are those out there valiantly not spending money. ¡Think o’ what a crisis I’d be in if rich people hired people when the conditions aren’t right! ¡That’ll totally make demand—money being spent—rise in this depression defined by a lack o’ demand!
It seems that Austrian-schoolers are the ones who don’t know what “depression” means. Then ‘gain, the # o’ numbskulls blathering ’bout the need to create jobs shows that most Americans don’t; it’s just when an economy’s “bad,” a situation without any concrete detail, & thus usable by any crazy ideology to be filled in with their own unique view o’ how the world works.
There are many others who make it steadily worse by feeding off a corrupt and swollen government and wasting trillions of borrowed of manufactured dollars.
Many o’ them are funding Against Crony Capitalism, no doubt.
I also love that “manufactured dollars” bit. As opposed to the dollars that grow from the ground. You’d think Austrian-schoolers would notice the obvious contradiction ‘tween a subjective theory o’ value & an objectivist theory o’ money, which is merely a symbol for value; but then, I’ve gotten plenty o’ evidence that consistency isn’t a priority for the Austrian school.
Footnotes:
1 Don’t make fun o’ me ’cause o’ my late publication (apparently I started this article on the very month Lewis wrote his): this shit’s still as relevant as it’ll e’er be; it’ll still be as relevant as it’ll e’er be in 2100, just as ’twas just as relevant in the 1930s.
