You know, Keynesian economics has never actually been discredited

[pecksniff]

I mention this only because there seems to be a widespread but never expressly articulated assumption among RWs that Ludwig von Mises or Milton Friedman somehow, at some point, succeeded in driving the final nail into Keynes' coffin. In fact, nothing of the kind ever happened. At present, the prevailing school of thought among economists is post-Keynesianism, which is essentially Keynesianism with tweaks, not something that gives any support to supply-side neoliberalism.

Keynes, BTW, rejected Marxism in no uncertain terms.

How can I accept a doctrine which sets up as its bible, above and beyond criticism, an obsolete economic textbook [Das Kapital] which I know to be not only scientifically erroneous but without interest or application for the modern world?

-- John Maynard Keynes

 

[Bud_Spencer]

If Keynesian economics held any water, the Great Depression would have been over by 1935, not extended into WWII.

 

[pecksniff]

If Keynesian economics held any water, the Great Depression would have been over by 1935, not extended into WWII.

That shit again?!

New Deal:

"New Deal denialism" is a term coined by historian Eric Rauchway in response to the start of the "New Deal made the Depression worse!" myth by revisionist journalist Amity Shlaes.[1] Naturally, this was parroted by George Will and sufficiently distorted by Faux Noise as the "consensus" among "historians."[2] Just in time to squawk about the stimulus package! In reality, however, three-quarters of historians don't believe that the New Deal prolonged and deepened the Great Depression. There is no consensus among economists as to whether the New Deal worked or not, however.[3]

Of course, Republicans have to re-write the history of the New Deal or all their laissez-faire bloviating falls flat. If the biggest Keynesian experiment in American history succeeded, it undercuts all their arguments that government can never do anything right (we mean, just look at the DMV).[notes 5] Here are the most oft-repeated denialist talking points and why they're wrong (most of which Rauchway goes into great depth about in the linked paper):

"The often overlooked Depression of 1920 only took one year to resolve itself with no government intervention." (See the Depression of 1920 page.)
Cherry-picked statistics a la Shlaes. (Shlaes and co. like to cite unemployment statistics that exclude government jobs for no other reason than that they weren't "real" jobs. Rauchway goes into detail about how Shlaes uses unreliable and non-standard stats that no honest historians or economists use to "prove" her case. The ironic thing is, even using the least flattering statistics, it still shows that economic conditions improved under FDR.)
"The NRA was communism!" (The favourite target of anti-New Dealers. The National Recovery Administration was a disaster, and even FDR recognized that. It became a hotbed of crony capitalism through legalized cartels that were allowed to fix prices, etc. It's true that the economy might have recovered faster without the NRA, but it was scrapped by 1935 and by 1936, GDP was back to pre-crash levels anyway. The NRA was only a major policy for two years.)
"It was World War II that got us out of the Great Depression, not the New Deal/all that government spending!" (Partially true. By 1936, GDP had recovered to where it was in 1929, though unemployment was still lagging behind it. Technically, we were no longer in a "depression" or "recession" at that point. As noted above, Republicans, as well as some in Roosevelt's cabinet, called for austerity measures. FDR complied and attempted to balance the budget, raise taxes, and allowed the Fed to run a contractionary policy. In 1937, the Roosevelt Recession rolled around and the economy dipped, but never back to the depths it had before. In fact, we were exiting the Depression by the time the Japanese hit Pearl Harbor. And for those that make the latter argument above, well, it's just damned stupid and incoherent. What do you call all the spending we did during WWII?![notes 6]
And the "FDR turned a recession into a depression" line is so removed from reality as to not even be worth responding to.

And WWII itself was, in its economic effects, an example of the success of Keynesian stimulus-spending. All political opposition to big spending faded away under the pressure of a military emergency, spending boomed, the economy boomed.

 

[Bud_Spencer]

It's not shit. There is simply no way to look at the massive Keynesian interventions that occurred from 1930 (Hoover actually started them) to 1940, none of it ending the depression, and conclude Keynesianism works. It doesn't.

 

[Chernosoth]

All the flavors of capitalism and socialism have the same flaw: they require economic growth. We are long past growth. With a few decades of contraction behind us and centuries more ahead, the discrediting is the nation will be unable to buy on credit.

 

[pecksniff]

All the flavors of capitalism and socialism have the same flaw: they require economic growth. We are long past growth. With a few decades of contraction behind us and centuries more ahead, the discrediting is the nation will be unable to buy on credit.

What means "long past growth"?

 

[pecksniff]

It's not shit. There is simply no way to look at the massive Keynesian interventions that occurred from 1930 (Hoover actually started them) to 1940, none of it ending the depression, and conclude Keynesianism works. It doesn't.

The Depression was significantly alleviated early in Roosevelt's term. Then he yielded to political pressure to scale back spending, and then came the "Roosevelt Recession." But unemployment was reduced nearly to pre-Depression levels before the war started.

 

[JohnnySavage]

This is why I hate google

 

[Rightguide]

I mention this only because there seems to be a widespread but never expressly articulated assumption among RWs that Ludwig von Mises or Milton Friedman somehow, at some point, succeeded in driving the final nail into Keynes' coffin. In fact, nothing of the kind ever happened. At present, the prevailing school of thought among economists is post-Keynesianism, which is essentially Keynesianism with tweaks, not something that gives any support to supply-side neoliberalism.

Keynes, BTW, rejected Marxism in no uncertain terms.



-- John Maynard Keynes

It has been rejected and repudiated by several mentally superior luminaries in history. Many are still alive. But clutching so tightly to your armor of willful ignorance, how would you know?

 

[pecksniff]

It has been rejected and repudiated by several mentally superior luminaries in history. Many are still alive. But clutching so tightly to your armor of willful ignorance, how would you know?

I certainly agree with Keynes on that point. Marxism is pseudoscientific, at best "science-ey" -- Marx had no more notion than Freud of how to test a hypothesis. (That does not mean Marx' thought does not merit some serious attention -- whatever it is, it is something more serious and better-founded than astrology.)

 

[Bud_Spencer]

The Depression was significantly alleviated early in Roosevelt's term. Then he yielded to political pressure to scale back spending, and then came the "Roosevelt Recession." But unemployment was reduced nearly to pre-Depression levels before the war started.

That's not what happened.

 

[pecksniff]

That's not what happened.

Historically, it is.

 

[RobDownSouth]

Genuinely surprised here that the Housesquaw hasn't shown up in this thread yet. "Keynesian" is one of his prime triggers.

 

[WillJ8787]

I mention this only because there seems to be a widespread but never expressly articulated assumption among RWs that Ludwig von Mises or Milton Friedman somehow, at some point, succeeded in driving the final nail into Keynes' coffin. In fact, nothing of the kind ever happened. At present, the prevailing school of thought among economists is post-Keynesianism, which is essentially Keynesianism with tweaks, not something that gives any support to supply-side neoliberalism.

Keynes, BTW, rejected Marxism in no uncertain terms.

You won't get an intelligent conversation on this with the authoritarian right wingers here....see first post by Butt Sphincter. I rest my case.

 

[adrina]

Well we know trickle down doesn't work.

 

[Wrong Element]

The reason I love arguments like this is that we're now into our fifth decade of "If you cut taxes for the rich you will actually cut the deficit," which has been discredited about as thoroughly as is possible, and yet it's still worshipped as if it was delivered on Mount Sinai.

 

[pecksniff]

Well we know trickle down doesn't work.

It has been tried. But it never accomplishes anything but its true intended purpose, which is to make the rich richer.

 

[pecksniff]

The reason I love arguments like this is that we're now into our fifth decade of "If you cut taxes for the rich you will actually cut the deficit," which has been discredited about as thoroughly as is possible, and yet it's still worshipped as if it was delivered on Mount Sinai.

Something to do with the Laffer curve. Only, no economist actually knows what a Laffer curve looks like, or where along it to place any given level of taxation. All it really does is express some incontrovertible truisms -- no taxes will raise no revenue, 100% taxes will raise no revenue (it will only produce a secret barter economy), and there must be some optimal point between that maximizes revenue.

 

[Pad_Foot]

Well we know trickle down doesn't work.

Yup! The rich are great on pissing on their economic lessers
They got tax decreases, and banked all the money they got
Corporations bought back their own stock

Many of us now pay taxes on our taxes! That used to be a “conservative” flag
No double taxation! Well? If the rich and the corporations need money to use to trickle on the masses? Find hidden ways to increase taxes on the masses
Well, the Blue masses!

 

[pecksniff]

A Republican man about town
Could make a smile vertical frown
For, at finish, the heel
Always made the girl kneel
And let all the wealth trickle down!

 

[pecksniff]

It has been rejected and repudiated by several mentally superior luminaries in history. Many are still alive. But clutching so tightly to your armor of willful ignorance, how would you know?

I happen to know that those "mentally superior luminaries" are mostly always-wrong-about-everything types like Milton Friedman and von Mises and the Austrian School.

 

[The_Trouvere]

Republicans never liked Keynesian economic policies because they shifted wealth, power, and prestige from the business community to the government.

How one feels about Keynesianism now is likely to be determined by how one feels about what the government has done since 1963.

 

[pecksniff]

Republicans never liked Keynesian economic policies because they shifted wealth, power, and prestige from the business community to the government.

Well, not so much wealth -- government always had more of that than any corporation.

Not necessarily still true . . .

 

[The_Trouvere]

During the 1970's Republicans blamed Keynesian policies for the stagflation, or the fact that inflation and high unemployment were happening at the same time.

The stagflation was caused by the OPEC Oil Embargo of 1973, and the Iranian revolution of 1979. Both of these raised the world price of petroleum. Republicans did not want to blame these because they did not want to admit that foreigners they disliked had considerable power over the U.S. economy. They also did not want to admit that American dependence on automobile transportation was a national problem.

Keynesian economic policies were not designed to respond to the shortage of a natural resource important to the U.S. economy. Also, during the Great Depression the problem was deflation, not inflation.

 

[The_Trouvere]

Well, not so much wealth -- government always had more of that than any corporation.

Not necessarily still true . . .

Raising taxes on rich people and corporations during the Roosevelt administration weakened the business community and gave the government more money to fight unemployment with.