Is Keynes the true father of the Venus Project ideology?April 19, 2009
Arthur Keynes is the man largely responsible for creating the economic theories that justify our current form of big government capitalism. He is the man most commonly cited to defend fiscal stimulus and bailout packages and is followed by most modern economists, but is he the true father of abundance, and the current economic collapse the attempt to create abundance has created? No related posts.
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I suppose the attempt to make home ownership available to those who truly couldn’t afford it is a cause of the current collapse. But wasn’t it the greed of those who sold those mortages without disclosing the risk the overarching cause?
I suppose those Keynesians didn’t forsee the actions which were taken by the opportunists. At the end of the day, people will always want to take advatage of opportunities which present themselves.
Maybe if those in charge of regulations had been doing their jobs, they’d have been able to prevent the calamity.
I blame the excess capital. In a free market economy there is no way the funding would have existed for all those mortgages to begin with, regardless of greed or incompetence. Where did the excess capital come from? Interest rates were way too low and there was a channeling of money into Washington and Wall Street by foreign governments. That’s the risk with an inflationary monetary system, sometimes the money gets funneled into a small section of the economy.
So was it Keynesian economics which caused the condition you are refering to….low interest rates? I don’t see the attraction to investors if the interest rates are low. And I assume that if the interest rates are low for the borrower, the same is true for the investor.
I am really trying to understand this. One gets so many perspectives in the media.I listened to about 3/4 of the talk about Keynes. I paused it and couldn’t get back to where I had been and didn’t want to listen to the whole thing again.
That’s a more difficult question. Most mainstream economists (Keynesians and others) have been convinced for decades that government can manage the economy by managing the supply of money, but there are many different ways to do it. You can deficit spend (fiscal stimulus) or you can lower interest rates (monetary stimulus). If you want my opinion, they’re both wrong. Not because it can’t work in the short term, but because the long term consequences of cumulative mal-investments actually serve to magnify the business cycle as opposed to smoothing it out. The government makes the booms bigger during the good times and the busts harder during the bad times. If you want to learn more about that perspective, look up “Austrian Economics”.
Watch this interesting video I found the other day:
http://www.youtube.com/watch?v=czcUmnsprQI