Its the difference between Pepsi and Coke
A recent Time article quoted an Iranian as saying the difference between the Republicans and the Democrats is like the difference between Pepsi and Coke. When it comes to economic policy I could not agree more.
CHANGE is here right? Wrong! Since 1896 the Keynesian viewpoints began to overwhelm capitalism.
(I know some of you are chomping at the bits to say that such an assumption cannot possibly be true being that Keynes would have been 13 in 1896. What I am referring to is the emergence of interventionist policy that started to take hold in during the banking crisis in the late 19th century. To me Keynes merely gets credit for the wave interventionist monetary policy which came to a perverse apex during the great depression).
FDR, Obama and Kennedy all attended Harvard. H.W Bush, Clinton, G.W Bush all attended Yale. The same schools produce the MBA students that litter the ranks of Goldman Sachs. Under Bush the there was Paulson (Goldman Sachs). Under Obama there was/is Rubin (Citi), and Larry Summers who head Obama’s economic council. Current Treasury Secretary Geithner (Dartmouth) worked under Rubin and Summers from 1999 to 2000. Change?
Whats my point? All of these people come from the Keynesian school of thought. We can spend you way out of this thing. We can do it if we try, we can do it. Hey, it worked in Great Depression…right? It worked for the Japanese, right?
Former Treasury Secretary O’Neill made the following comments to the LA Times.
“Doesn’t this seem like lunacy to you?” said O’Neill, who was President Bush’s first Treasury chief, from 2001 to 2002, in a telephone interview today. “The consequences of it are unbelievably bad in terms of public intrusion into the private sector.”
… “Is anybody thinking there?” asked O’Neill, who also served as deputy budget director in the Ford administration. “It’s too late, it’s not going to make any difference and it’s aggravating as hell when there’s a better idea and you can’t even get it in play,” he said, recognizing little success so far in pitching his own proposal.
I suppose it come down to what was repeatedly preached by Mises. Governments pick the winners and the losers. In the modern era the history books were written by FDR’s Keynsians that graduated from Ivy league schools. They are the ones picking the winners. They are a best and our brightest, right? My gripe is that they all tend to come from the same school of the thought. They leave no room for the entrepreneur to pave his own way.
Obama Pepsi, Bush Coke…when can we have a little Sprite?
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I have only a lowly BS in Ag from a Southern state university, a PhD from The School of Hard Knocks and have only been self-studying Austrian theory for a little over a year. So obviously, I don’t have the pedigree of The Great Ones trained at the very best Ivy League schools.
But something occurred to me a couple of weeks ago, something that may be obvious to those with more experience than I have: of COURSE government loves Keynesian theory; it’s all about power. It calls for government intervention in the free-market and gives them license to pillage and plunder from We the Serfs. A side bonus is that our representation in Congress is effectively neutered. They could never get away with all these Big Government Adventures if we were taxed directly to pay for them.
Meanwhile, they pat us on the head and tell us everything will be A-OK. We serfs, of course, are entirely too dumb to understand all the complexities of a complex economic system.
Nice blog, by the way.
It is actually painful to watch these testimonies on TV. Congess has no idea what is going on in the financial markets. They don’t have a basic understanding. All they remember is from their history books is that Kenynes policies got us out the depression (I wish I knew how to make upside down question mark)?
Inflation since the Fed was created: Every $1 of 1914 dollars is the equivalent to $26 2009 dollar. How are they going to pay for this everyone asks, simple, they will just rob our accounts by printing more money. Oh ya and then they will tax the corporations and tax those that make more than 200k to the high heaven. If I live blocks from work this would be like being mugged on each and every block on the way home. Inflation, corporate taxes, income taxes. Rape, pillage and steal.
To me the bottom line is productivity.
See this stuff makes me so mad that my grammar ends up sounding like a Senator asking Bernanke where the money went.