THE END OF KEYNESIANISM?

Richard Russell certainly thinks so:

The end of Keynesianism? Yes, I think we’re seeing it now. Fed Chief Bernanke in his writing blamed the Great Depression on the Fed for shrinking the money supply. In fact, Bernanke even apologized on the part of the Fed for “causing the Great Depression.” Bernanke, wrote a famous piece explaining to “us know-nothings” that the Fed has a magic instrument, it was the ability to print money, and, if necessary, to drop this Fed-created money to the American people from helicopters. With his magic power, concluded Ben, there was no way the US could slide into another Great Depression.

It was great and comforting concept, but it didn’t work. After leaving rates at zero, printing over two trillion “dollars” and backing billions of dollars in stimulus plans, unemployment remains high, housing stays in the dumps and the national debt has sky-rocketed beyond all reckoning.

The spending plans of the Obama administration and the expansion of money by the Fed has left the US in worse shape than ever. Unemployment is still high, and the US has taken its place along with Greece and Portugal as another “half-broke banana republic.”

How did this horror story befall the once “greatest nation on earth” and the one-time “Arsenal of Democracy?” If a house is built on sandstone and with rotten timber it’s not a question of whether that house will fall apart — it’s a question of WHEN. Ever since the end of World War II, Americans have been enjoying the greatest standard of living the world has ever seen. How did we do it? Was it hard work, sweat, original thinking, risk-taking or pure luck? Hardly any of those, it was through borrowing and creating a gigantic house-of-cards. The cards were the newly-created bits of paper that we call dollars (actually, they are Federal Reserve notes backed by nothing).

Without its abilities to create fiat money, the US could never have built its “house-of-cards economy.” Without the insidious Fed, the US would never have had the ability to create trillions of unbacked Fed notes.

I’ve insisted all along that the US should have allowed the primary bear forces to fully express themselves, as they inevitably will do anyway. But in its arrogance and ignorance, the administration decided that they could halt or sidestep a recession by printing us out of trouble. It’s been a terrible and expensive mistake. Finally, with debts now pushing above 90% of GDP, the American people have shouted “Stop, it’s not working, we can’t find jobs, and you people in Washington are pushing us and our children into a state of bankruptcy. If you don’t know what you’re doing — stop it!”

When the voters are “mad as hell,” the politicians take notice. What’s happened is that 65 years of over-spending and borrowing has never been corrected in a major way. But the gods of the market have finally warned, “You nations of the world have crossed a line in the sand. Now it’s “pay-back or correction time.” Now is the time to pay for 65 years of unearned prosperity. You wouldn’t build up your economies through hard work, sweat and tears. Like children you’ve demanded, “I want it, and I want it now.”

What’s next? I think Washington will continue trying to spend us out of recession. This did not work in the past, and it’s not going to work now. The primary bear market will not allow it to work. But what if the Administration gives up and allows the forces of deflation and correction to express themselves?

Here’s where my crystal ball gets very cloudy. I don’t see Washington accepting another long, drawn-out recession or another Great Depression. The temptation will be too strong to try to print us out of the recession or to create enough government-sponsored jobs to drag us out of the recession. That’s what I see happening.

What would I have done? I would have done exactly the opposite of what has been done by Obama. Instead of promising prosperity and “back to normal,” I would have told the nation the truth. You’ve lived the great and unearned life for 65 years, all created by credit and borrowing, fun’s over. You must now pay for it with SACRIFICE. Americans must cut back to the bone. Children may have to move back with their parents, Americans may have to build “victory gardens” as we did during World War II. We’ll have to learn to save and scrimp. If you want to buy a house or a car or a washing machine, you’ll have to wait until you earn enough to pay for those items.

The difficult choice is to sacrifice or America shrinks to a has-been power — this is the “hard rain” I’ve been warning about.

Question — Russell, the story now is sacrifice or lose our freedom and become a second or even third class power. Is that your scary story?

Answer — That’s right. My generation is called “the greatest generation.” Why? Because we had to sacrifice, first through the Great Depression and then through World War II. But we did survive. At the end of the War, America was accepted as the greatest and most powerful nation on earth. Every man and woman in the world wanted to come to America, where the streets “were paved with gold” and people were free. That’s about over now. America is losing engineers and scientists and its best minds to other nations where it is thought that opportunities are better. It’s hard to believe, but it’s the bitter truth.

I don’t entirely agree, but there is a great deal of truth to many of his comments….

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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Comments

  1. Although I might agree with the effect, I disagree to some degree about the cause.

    “Ever since the end of World War II, Americans have been enjoying the greatest standard of living the world has ever seen. How did we do it? Was it hard work, sweat, original thinking, risk-taking or pure luck? Hardly any of those, it was through borrowing and creating a gigantic house-of-cards.”

    At the end of WWII, the US was left with a world whose productive capacity had been destroyed, yet at the same time, all of our industrial might remained intact. As a result, we were nearly two-thirds of the world’s GDP, and the purchasing power of our dollar was unprecedented.

    Those days are gone and will never come back. The world is a much more competitive place today, with resources now being devoted to economic growth rather than military build up.

    Yet somehow, we as a people still yearn for those days when a minimum wage could support an entire family plus a mortgage for a house in a new subdivision. Worse yet, we keep electing politicians who promise that that is right around the corner (as long as you elect *them*).

    We need to get real. If we adapt, I think we’ll be OK. It may not quite be as comfortable as the golden age of the 50′s, but it won’t be so bad as we’ll be living within our means. If we don’t adapt, those changes will be forced upon us, and it will be much more painful.

  2. Bernanke, wrote a famous piece explaining to “us know-nothings” that the Fed has a magic instrument, it was the ability to print money, and, if necessary, to drop this Fed-created money to the American people from helicopters. Richard Russell

    Just when was a serious attempt made to give the American people money?

    With his magic power, concluded Ben, there was no way the US could slide into another Great Depression.

    It was great and comforting concept, but it didn’t work. After leaving rates at zero,

    It turns out no one wants to borrow or lend in an economic downturn.

    printing over two trillion “dollars” and backing billions of dollars in stimulus plans, unemployment remains high, housing stays in the dumps and the national debt has sky-rocketed beyond all reckoning. Richard Russell

    If that money had been applied to the victims of our banking and money system, borrowers and savers, instead of the villains, the banks, we might well be recovering by now.

    So Bernanke’s point about the helicopter drop of money has not really been tested yet.

  3. South Park has a better understanding of economics than the needless austerity folks:

    http://www.southparkstudios.com/episodes/220760

    Austerity is a tool of the counterfeiting cartel (the banking system) so they can be repaid with dearer money in a deflating economy. At most, they deserve to be repaid with money of value equal to what was lent. So the solution is to reflate the economy with a distribution of new legal tender to every US adult and at the same time impose leverage restrictions to at least slow down the counterfeiting cartel.

  4. My generation is called “the greatest generation.” Why? Because we had to sacrifice, first through the Great Depression and then through World War II. But we did survive. Mr Russel

    Anyone think we’ll survive WWIII? I notice those who advocate suffering as a cure very rarely advocate it for themselves.

  5. Hey PC – you’re cia, aren’t you? You’re part of the CIA web twist on Project Mockingbird, YES?

    People reading this blog need to know that this is a disinformation website run by your loving omnipotent military industrial complex. This guy’s job is to get you to stop questioning all the “good” your poor misunderstood government does for you! TPC is a mouthpiece for the oligarchy and will tell you over and over again that you should be grateful for what the government has done to avert the abyss (that they and the financial terrorists who actually run the criminal enterprise of government) pushed you into. If you think these things happen by accident, think of all the asset consolidation and CDS guarantees and increases in debt that occurred. Think back to the S&L crisis of the 80’s – where did all the assets go that were on the balance sheets of those institutions? They didn’t evaporate – You paid for them when wells fargo, BofA, JPM took them over. They didn’t pay for them – they were given them by the Resolution Trust and then you paid the depositors by increasing the National Debt. (and you rtax payments on the interest of that debt!)

    You see that it was you that guaranteed the losses of the S&L’s so that the Federal Reserve banks could then come in and take over the balance sheets of the “insolvent” S&L’s without spending a dime of their own money! They always spend YOUR MONEY to protect YOUR DEPOSITS and then they don’t protect them, but allow them to be stolen and then charge you higher debt taxes when they give you your bank account back! WAKE UP!

    TPC will tell you that there is no real National Debt because we are our own bank and can print money! (this is just a slicker version of the “we owe it to ourselves” argument that the Fed and the Banksters used to use on the unwitting)

    Never mind that your government has lied you into wars, tapped your phones and computers, and pledged your labor as collateral on endless compound interest that they say has to be paid to the too big to fail Central Bank Vampires.

    Never mind, MKULRA, Watergate, Vietnam (gulf of tonkin and the pentagon papers), Iran Contra, October Surprise, Endless Illegal Wars against innocent women and children, 9/11 cover-ups…forget all that! TPC says your government is a good, productive benefactor. It isn’t important that it has transformed the Nation into a debt slave plantation. You shouldn’t think about being a free American but rather a productive citizen!

    Never mind the fiat ponzi money scheme (the FED) and the income slavery necessary to pay interest on debt money creation. Never mind the 12 trillion in direct payouts to the financial terrorists known as Federal Reserve Banks. Never mind the millions of murdered Iraqi’s who died so permanent bases could be installed in the middle east. Never mind the new daily dead innocents in Iraq, Afghanistan and Pakistan.

    You see, TPC says it’s all worth it because the trillion dollar weapons systems killing people the world over are really just technological improvements which will soon find their way into Wal Mart and Best Buy – they are really consumer goods waiting to be merchandised!

    Wake up – CIA director William Colby once stated that CIA had at least 75% of the news media in their pocket. The oligarchy killed him for going public a(nd just before he was set to testify before congress).

    Do you think CIA stopped propagandizing you with your own money because of the creation of the internet?!?!

  6. Do you think CIA stopped propagandizing you with your own money because of the creation of the internet?!?! TPC

    My thanks to the CIA then for providing this nice forum to spread the truth (as I know it, of course) about the need for a bailout of the American population followed by fundamental reform in banking and money.

    As for TPC, he is pragmatic. What would one expect of a pragmatist? Yet, he recognizes the system has hosed itself so he (and the CIA? :) ) is open to solutions. Remember, WWIII will kill most of US including the PTB. But even if it didn’t they would have to live with the terrible guilt of having caused it or having failed to prevent it.

    • So in spite of WWII killing 75 million people – most all of the banking interests, the policticos, the various seats of power survived and in fact made huge profits from the conflagrration. The Bush family fortune came out of war profiteering (Harriman Banking Interests that were unfrozen after being seized under the trading with the enemies act). Get a clue as to the real history of your country and as to the interests that have a reason to keep you actively misinformed and disengaged.

      Americans are fools. you deserve the government you have…

      As for dissinformation, the cia and the media (and internet), WHAT IN THE WORLD would make you happy about participating in your own brainwashing and PAYING FOR IT to boot!

  7. http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/rise.html

    I pulled up this old Frontline article titled “The Ascendancy of the Credit Card Industry.”

    My mom tells me she first bought something on credit – a washing machine – just after WW2. Maybe the years of doing without took a toll.

    BofA dropped 60,000 “revolving” credit cards on Fresno, California in 1958.

    When Citibank could not get around the usury laws in NY, they moved their headquarters to North Dakota.

    Along came Mr. Kahn – later down the road – He increased credit lines, researched who would carry a balance, and slashed the required minimum payment.

    Now folks could get into tons of trouble with those cards and run up balances in the thousands with no real hope of paying them off in the foreseeable future.

    Credit cards – the revolving credit line – it certainly hasn’t helped matters any. Folks consolidated debt, took out a second to pay it off, then ran up the cards again.

    Austerity to me means – cut up the cards. Learn to live on what you earn.

  8. Well, Russell’s rhetoric is a perfect example of mere belief based on prejudice, not analysis. Is there a single argument in these paragraphs? Instead, it’s chock full of nostalgia and sentiment. Indeed, his opening line indicates that he traffics more in “isms” than analysis. Krugman’s recent lament is well documented in Russell’s piece. It’s really disappointing that what we take as serious discourse is really not much different from some old guy on the front porch saying, “back in my day.” That this kind of thing gets air time reveals how much power there is in the rhetoric of austerity. It’s built into the Puritan roots of American culture I guess.

    • Agreed. There is a niche market for such hyperbolic crash porn, but it doesn’t mean much.

      There are several overused euphemisms and abused metaphors floating around the internet and financial media these days, which are almost always red flags that a lousy argument is being made. Russell has resorted to using a few of those, such as “fiat money,” “banana republic” and “house of cards”, which made it clear from the start that there wasn’t much substance here (although he at least had the decency to avoid the references to socialism or Marx.) I just wish these guys would insert all of these cliches in the first paragraph, so I would know up front that I can safely skip the rest of it.

      • Heed the last few words from this sentence MBA:

        “I’ve insisted all along that the US should have allowed the primary bear forces to fully express themselves, as they inevitably will do anyway.”

        “As they inevitably will do anyway…..”

        This article is spot on.

  9. Russell sounds totally out of touch with reality. “I would have told Americans the truth…” And he would not have been elected. Whatever the problems of the administration’s approach, it’s not that we’ve spent too much. And he’s clearly not a politician who can get himself elected to anything…

    It is certainly true that this country has grown decadent and fat, but that’s what prosperity does, and the debt binge was fueled by the banks, as we all know. You can even argue that the debt binge is a direct function of the Reaganomics that conservatives swear by, since wages have effectively stagnated since then. He sounds like a crotchety old man, frankly, who feels like everyone has been partying while he had to live the hard life, even as he’s unwilling to recognize the contradictions in the very mechanism of prosperity that he believes in (like wage stagnation leading to debt leading to the entirely fake recovery produced under Bush II).

    And his Dow 500 (sic) call just proves my point.

  10. Give it up Beard. This notion of just giving people money is not even worth anyones time.

    • This notion of just giving people money is not even worth anyones time. Dallas

      Bernanke and I came to the same conclusion (except I’d use interest and debt free legal tender instead of FRN’s) using different approaches, I’d bet. I followed the logical moral consequences of fractional reserve lending in a government enforced monopoly money. I expect Ben was more pragmatic. Furthermore, the Bible (Deuteronomy 15, and Leviticus 25) commands debt forgiveness. In the days of the Old Testament, I doubt our current money-for-debt scheme even existed so the system was much more honest then (hard money).

      So, I have at least three separate sources saying that a bailout should be done. And the objections I’ve heard? Only an assertion that hyperinflation would result, which turns out on closer inspection to not even be plausible.

      • So now the Bible is an authoritative treatise on good economics? I don’t know what to say…

        I don’t understand why you think your plan for giving everyone lots of money wouldn’t be horribly inflationary. What will all those formerly indebted people do once their burden of debt is lifted? I think anyone who is reasonably familiar with human nature would expect those people would go out and do what they did before — spend, spend, spend! Why should they do otherwise, since they were rewarded for their past irresponsible behavior (they got to keep their loot, paid for by the “Beard Plan.”) Do you see no problems with moral hazard here? Even if they didn’t go into debt once again (which seems highly unlikely, given that they’ve already demonstrated they are willing to do so and ultimately got bailed out), they still have their income to spend, and would almost certainly do so in a paycheck-to-paycheck fashion (that’s their mode of thinking, right?). And all those people who weren’t indebted but whom you decided to give a bunch of money to be “fair” are also likely to pour much of it into consumption or speculation.

        The resulting massive rise in consumption would require business to ramp up production to satisfy it, leading to rapid job gains, labor shortages, and wage inflation to attract the workers. Businesses would also raise prices to increase profits due to the demand outstripping supply. There would be very large demands on the credit markets by those businesses to fund their expansion. Demands for imports would skyrocket, leading to booms in other countries. All this and much more would be fueled by the massive amounts of extremely cheap (free!) money in your plan. You are talking about a bubble of unprecedented magnitude.

        I just don’t see how you can argue that your plan wouldn’t be MASSIVELY inflationary. I don’t see why you seem to think your plan wouldn’t also lead to huge, artificially induced imbalances between the kind of production that is actually needed to sustain a stable economy, and the kind of production that is stimulated by a lot of frivolous consumption arising from everyone receiving a windfall.

        In my view your plan is a non-starter. I agree with RSDallas — I wish you would stop talking about it.

        • So now the Bible is an authoritative treatise on good economics? I don’t know what to say…

          All, I can think of is you have never read it. The profound success of the West is based on that Book.

          I don’t understand why you think your plan for giving everyone lots of money wouldn’t be horribly inflationary.

          It might cause a one time burst of inflation but with leverage restrictions on the banks, hyperinflation could be made impossible. Leverage is what got us in this mess to begin with.

          What will all those formerly indebted people do once their burden of debt is lifted? I think anyone who is reasonably familiar with human nature would expect those people would go out and do what they did before — spend, spend, spend! Why should they do otherwise, since they were rewarded for their past irresponsible behavior (they got to keep their loot, paid for by the “Beard Plan.”) Do you see no problems with moral hazard here? Even if they didn’t go into debt once again (which seems highly unlikely, given that they’ve already demonstrated they are willing to do so and ultimately got bailed out), they still have their income to spend, and would almost certainly do so in a paycheck-to-paycheck fashion (that’s their mode of thinking, right?). And all those people who weren’t indebted but whom you decided to give a bunch of money to be “fair” are also likely to pour much of it into consumption or speculation.

          With leverage restrictions, let’s say a 100% reserve requirement, interest rates would rise which would encourage saving and discourage borrowing and speculation. Plus you are blaming the victims of the counterfeiting cartel, the savers and borrowers.

          The resulting massive rise in consumption would require business to ramp up production to satisfy it, leading to rapid job gains, labor shortages, and wage inflation to attract the workers. Businesses would also raise prices to increase profits due to the demand outstripping supply. There would be very large demands on the credit markets by those businesses to fund their expansion. Demands for imports would skyrocket, leading to booms in other countries. All this and much more would be fueled by the massive amounts of extremely cheap (free!) money in your plan. You are talking about a bubble of unprecedented magnitude.

          No, I am talking about a one time reflation of the economy to be followed by fundamental reform in money and banking. Without cheap loans, an unsustainable boom would not result. Saving would be encouraged. Deflation would be halted.

          I just don’t see how you can argue that your plan wouldn’t be MASSIVELY inflationary. I don’t see why you seem to think your plan wouldn’t also lead to huge, artificially induced imbalances between the kind of production that is actually needed to sustain a stable economy, and the kind of production that is stimulated by a lot of frivolous consumption arising from everyone receiving a windfall.

          You keep talking human psychology which is irrelevant if there is no money-from-thin-air to fuel an unsustainable boom with.

          In my view your plan is a non-starter. I agree with RSDallas — I wish you would stop talking about it.

          The long term solution is fundamental reform in money and banking which I also advocate. However, a just reset of the present unjust system would be very wise, IMO.

  11. TPC,

    The end of Keynesianism?

    I don’t think so. It is a theory based on “giving” or supplementing the economy goes bad. It’s the “I’m the savior and I will not let you down”, campaign slogan.

    Keynes was a professed Socialist. Any Socialist worth their salt knows that the key to advancing Socialism is convincing the mass that the world can not be fair unless the big and mighty government steps in and takes up for all that are treated unfairly by the more fortunate.

    You see Keynesians can never be dispelled and Keynes knew this. It is a Socialist “perfect tool”. Think about it: What are the Socialist (I mean Keynesians) going to say if you quit applying Keynes theories and the economy tanks. It’s a no brainer. Krugman says it every chance he gets. Now what are the Keynesian nuts going to say if the economy miraculously pulls out of this nose dive?

    Enough said.

    Please, America tell everyone you know to get out and vote this year. It is time we take America back.

    • Keynes was a professed Socialist.

      “Marxian socialism must always remain a portent to the historians of opinion – how a doctrine so illogical and so dull can have exercised so powerful and enduring an influence over the minds of men and, through them, the events of history.”

      John Maynard Keynes, The End of Laissez Faire
      http://www.panarchy.org/keynes/laissezfaire.1926.html

      In Britain, Keynes specifically rejected joining the Labour Party because he feared that if it gained power that it would be hijacked by the far left: “(I)f — which is not unlikely — the control of the party is seized by an autocratic inner ring, this control will be exercised in the interests of the extreme Left Wing — the section of the Labour Party that I shall designate the Party of Catastophe.” (Essays In Persuasion)

      We’re all entitled to have differences in opinion, but rewriting history to suit your purpose just doesn’t cut it. It would be just awesome if you could at least attempt to get some basic facts straight.

        • Government intervention of the business cycle is a “control and command” system.

          Ah, now I get it. Everyone except for you and the Austrian cultists is a socialist, because you’ve redefined a socialist as being “anyone who doesn’t agree with Austrian ‘economics’.”

          While that makes things easier for you, I’m sure, it’s not exactly accurate. Socialists are those who wish to have the state directly control production. Sorry for you, but state-operated factories are not a tenet of Keynesianism

          Have fun reading the following

          Right. Instead of understanding Keynes by reading Keynes, you instead resort to reading far-right Austrian “economics” tripe.

          This is going to shock you, I know, but if you want to learn about Keynes’ positions, you might, er…try reading Keynes. (Crazy, I know — imagine learning about it directly, instead of having strongly biased parties filter it for you.)

          It’s pretty obvious that you’re more interesting in hearing your viewed echoed on the internet than you are in actually learning about the topic about which you profess to claim knowledge.

          • Speaking of Keynes:

            John Maynard Keynes,
            you’ve had your fun
            but we find we’re living
            in your “long run”.

            A principled money system is the key to a stable economy with maximum sustainable growth.

      • Ludwig Von Misis on “Middle of the road policies lead to Socialism”:

        A quick quote:

        “But when this state of all-round control of business is attained, there can no longer be any question of a market economy. No longer do the citizens by their buying and abstention from buying determine what should be produced and how. The power to decide these matters has devolved upon the government. This is no longer capitalism; it is all-round planning by the government, it is socialism.”

        http://mises.org/midroad/mr2.asp

        • I’m glad you put the link to Herr Mises. I sometimes get that site mixed up with two other sites: the Masons and the Mensa International . . . (the sites actually even kind of look alike).

  12. The US was an island of economic freedom in a not very free world.
    People came from all over and worked hard and took full advantage of this opportunity.

    Now there are new economies that offer more and more economic freedom. For there citizens this is new. Freedom is the engine of there motivation, they are not spoiled and eager to work. In more than one way there world resemble America many years ago.

    In any country when you hear the word equality more often than the word freedom it’s not a very good sign.

    Immigrants did not come to America for a free lunch. Its time to get back to the idea that responsibility is a prerequisite to freedom.

    No money, no credit, 0 % to buy a home was not the way to run an economy. It was irresponsible. Bailouts are not part of economic freedom and they have very bad consequence.

    Government can protect freedom but when it starts taking over people responsibilities its closer to socialism. Actually what we have now is a combo of A) The welfare state and B) Socialist for the rich.

  13. Did someone just ponder the end of Keynesianism? In the immortal words of Dubya, “You ain’t seen nothin’ yet” when it comes to Keynesian economics. Plus we all know where the supposed “free-market” traders and politicians got their diploma from: the school of Keynesian economics!

    • Plus we all know where the supposed “free-market” traders and politicians got their diploma from: the school of Keynesian economics!

      As an MBA from a first-tier school, I can attest personally to the fact that your statement is false.

      The general bias in business schools is toward Chicago School monetarism. When I received my degree, Keynesianism was ignored when it wasn’t being rejected in passing.

      Personally, my econ instructors varied between Chicago School/ Friedman worship and supply side. Keynes was mentioned only in the context of supporting the claim of why Friedman was supposedly better.

      No, after a long hiatus, we’ve only recently rediscovered Keynesian economics, once the world decided to blow itself up and monetarism didn’t provide much recourse. Back in 2008, some folks began to realize that Friedman’s focus had been on managing inflation, and then remembered someone else who had done a better job of addressing deflation.

      • It’s an absurd pipe dream to believe that the private sector can run everything (which is basically the Austrian/neo-liberal premise). Humans are too corrupt, evil and incompetent as a whole to allow small private groups to become too powerful. This is how civil wars and coups start….When a small group in the private sector becomes too powerful. Perhaps necessary when a govt becomes corrupt, but otherwise dangerous.

        • “Humans are too corrupt, evil and incompetent as a whole to allow small private groups to become too powerful.”

          So your solution to a small private group from becoming financially too powerful is to have a small group of elitists become financially powerful *and* have the force of the state?

          Great solution.

          • Any regular reader who implies that I am happy with the current system should be truly ashamed of themselves. Do you even read my work?

        • ok – here it is – this is what TPC was created to do. Propagandize the virtues of governement and of SOCIALISM under the guise of pragmatism…

          this guy deletes posts, lies about factual data – the presentation of articles with his commentary interjected is about as subtle as a meat clever.

          why not read the actual articles from their source instead of coming here and participating in your own brainwashing???

          are you all really so far gone that you need someone to lead you around and tell you what to think. can’t you read basic source material without subjecting yourself to CIA hacks manipulating your fear, guilt and insecurities!

          Look up Project Mockingbird and google William Colby’s death. Read Carl Bernstein’s Rolling Stone article about CIA’s complete infiltration of ALL NEWS MEDIA.

          take the red pill and stop being good citizens – find your way back into freedom.

        • It’s an absurd pipe dream to believe that the private sector can run everything (which is basically the Austrian/neo-liberal premise).

          That is the critical flaw of Austrian “economics” — it begins with a political premise, and then attempts to superimpose an economic theory to match the pre-ordained political view. It is not social science, but a quasi-religious moral belief system.

          This inherent political bias is one reason why Austrian “economics” is more popular among ideologues on the internet than it is in the real world. Like Marx, both Mises and Hayek began with ingrained views about political matters, and then tried to justify those views with economic dogma that was intended to make their political slants look legitimate.

          Austrian business cycle theory belongs down in the muck alongside Marx’s labor theory of value as something to be ignored by anyone but political extremists. You would think that one bad call after another by its Pied Pipers such as Peter Schiff would wake them up to the basic flaws in this faux-economic religion, but I suppose that facts can’t be allowed to get in the way of a good argument…

  14. Actually its worst than that Andrew.

    I believe that half of Congress are lawyers there are very few economists in politics.

  15. The government is addicted to controlling the personal behavior choices of the people via taxation . The problem is that virtually no one knows exactly how much government costs ( taxes ) them . The solution is to have one tax and only one tax – an income tax – and no other tax of any kind except maybe an amount of unavoidable price inflation . The government would have incontrovertible reason to realign its operations if aggregate income falls sufficiently in the absence of veritable externalities . Furthermore , you would solve a major portion of the problem of wealth distribution since a single income tax for everyone would mean that all would be paying their fair share for government because one cannot make more money than someone else unless the government continues to function properly during their money making activities .

  16. Keynesianims or a generation with a strong sense of entitlement ? We owe much to our grandparent’s generation and those before them. But this current generation seems to be avoiding tough choices on the economy and the environment, to simply pass these problems onto our grandchildren’s generation.
    Europe has seen the light and seems to be taking action. Does the US have the right leadership to face and own these challenges ?

  17. “Humans are too corrupt, evil and incompetent as a whole to allow small private groups to become too powerful.”

    I am glad to be inform that Government are not manage by the same corrupt, evil and incompetent humans.

    Small private groups are not powerful they need to compete and be imaginative.
    So, let’s trust the Government(s) and there history of needles wars, corruption and regulations that always favor monopole and oligopolies.

    • It’s just not realistic to argue that govt isn’t needed. It all comes down to military power at some point. A private sector military would result in constant civil war and coups. It’s happened throughout history. Think of this realitistically. What happens when you disband the US military and make it private? You’re just asking for trouble. I don’t agree with a high level of govt in te private sector, but arguing that govt is totally useless is just unrealistic. It would be constant anarchy and upheaval.

  18. If the Government’s role is to protect freedom, as a libertarian I am absolutely with you on that part.

    Have a nice Fourth of July freedom day.

    • That’s the great irony in the extreme libertarian position. They don’t want govt involved in our lives unless it comes down to the single largest and most important function of our govt – the military that protects us all. There’s no purist libertarians during a war that threatens our way of life. And don’t come back with the old libertarian argument that we should never enter wars. Again, that’s just not a realistic perspective.

      • TPC,

        That’s because that was the vision in the minds of our founding fathers. Putting the military beside, tell me one government program that if dropped would not be picked up and improved by the public sector. Just look at what’s happening in the Charter School arena.

        You wrote earlier:

        Humans are too corrupt, evil and incompetent as a whole to allow small private groups to become too powerful.

        Shame on you TPC. If anything the government has created an environment wherein the evil and incompetent and corrupt can thrive, many times going untouched by traditional law enforcement. This, hopefully, is about to change. Are you actually more in favor of a command and control government than you let on to be?

        It’s simple TPC. We have laws in this Country and they are there to protect the citizenry from those who choose to do business in a corrupt manner. But then the government crooks get involved and cloud everything up and water down the enforcement capabilities that are available in the public sector or even within their own government enforcement departments a la SEC.

        The public sector is as a whole made up of “good” people and if left alone these good people will make the right decisions most of the time. Good people should be able to create and write good laws and then be given the ability to enforce these laws. Again, it’s the oversight and enforcement of our existing laws that get watered down by our Government. So what happens next?

        We all of the sudden have a worthless 2,000 page financial legislation that would have never been needed had the government just allowed the “good” people to carry out the “good” laws and rules that were already in place.

        So, it offends me when you to say that we, as a society are corrupt and incapable of governing ourselves in the business sector. Maybe you should be reminded of something your mother should have taught you that one bad apple does not make the entire bag of apples bad.

        • That’s my point though Dallas. You can’t just “put aside” the military because it is the backbone of our “big govt”. Conservatives and libertarians always ignore this simple fact (to their convenience).

          Look, I am not saying we should have govt involved in our lives at every level. Not even close, but the idea of no govt, private sector utopia is a dream. It’s just not realistic. Our current govt is too big. Spends too much on useless programs, etc. I totally agree with you on that. But there is a certain level of govt that is necessary. That’s all I am saying.

          • I would hope that no one would want to put aside the military. I have never read that anywhere. As a matter of fact most of what I have read indicates that “defense” was in fact the primary role the US Government was supposed to hold. A Nation would not survive overnight if it didn’t have a military.

            It’s 95% of the rest of the government that needs to go. Obama’s budget gives some 3 trillion dollars away. THREE TRILLION!

      • TPC believes war is just another consumer activity!

        It’s good for the economy –

        Listen you sheep! TPC is a CIA funded front designed to keep you chasing your tails and slapping at shadows.

        TPC will always tell you there are enemies of the state that must be dealt with, that mixed economy is good, that the Patriot Act while excessive is necessary, that war is inevitable…etc, etc, etc…

        Any true libertarians should spend their time actively opposing this criminal fascist government with any legitimate means available. You shouldn’t waste your energies arguing with this CIA HACK.

  19. I don’t doubt that those idiots don’t try stuff like that, but TPC, I really doubt it. I would suggest that you go post on Yahoo.

  20. Libertarians are espoused to the dream that a utopia could arise from an anarchy which is really a technical term for ” law of the jungle “. Human activity within the framework of a government is required to build and sustain the life support systems needed to expand and extend human life ; and that does not rule out environmental and ecological concerns . Either warfare is an unavoidable hazard of competing powers ( ie. competing governments ) or the scientific law of competition between and among all living beings is patently false ( LoL proving it false ). Empirically verifiable human competition of substantive consequence is a rendition of the eternal , ancient and biblical struggle between Good and Evil – and the good guys are supposed to win . If the bad guys win it would be wise not to make derogatory comments that may inflame their evil propensities and invoke an unhealthy consequence . Warfare is an amplification of human competition made inadvertently possible by the necessary governmental mechanisms for assimilating , accumulating and distributing real world power required to sustain , expand and extend life support technologies . Warfare is imperfect as is any human endeavor but the tragic costs of it pale to insignificance the costs that would be associated with the lost opportunities of an anarchy to sustain , expand and extend human life ; and any totalitarianism could not cancel a possibility for warfare . This current worldwide economic/financial debacle is very much a competition problem of political power distribution and financial wealth distribution
    ; and the intractable Good vs Evil struggle .
    Libertarian extremism is not only irrational , it is incredulous .
    Live free or die ( praise the Lord and may the good guys win ).

    • Ron,

      I don’t know how long you sat and thought that piece up, but that was a total waste of time. Let me simplify it for you. The US in and other developed Nations are experiencing a period in which trillions of poorly invested dollars are unsuccessfully trying to exit the economy. The US Government is intervening and has greatly slowed this process by allowing banks to mark their assets based on “Never Never Land” accounting methods. They are also prolonging the inevitable residential home foreclosure processes. The Fed. has also successfully convinced the banks not to value a business loan to its current value as long as the loan can be serviced. This is enabling many banking institutions to operate even though they are technically insolvent. It is the nature of being insolvent that discourages a bank from loaning money.

      This America is resulting in our Government essentially choking the middle class to death. Why? Because it is the Middle Class who often times services these companies and individuals who made all of these investments that have gone bad. It is also this same Middle Class that will charge in, if given the chance, and take advantage of these poor investment decisions by buying the distressed asset. This is a natural occurrence within the law of business.