Posted tagged ‘Keynesianism’

Must Reads For The Week 10/23/15

October 24, 2015

A Challenge To The GOP From Bernie Sanders: Put Up Our Shut Up On Capitalism, by Dan Mitchell, at Sanders is correct for wanting reporters to ask Republicans: ‘are you a capitalist’. Socialism is government ownership of the means of production. Sanders and Hillary don’t want socialism. They want government intervention, redistribution and crony socialism. Capitalism is private ownership of the means of production. Republicans candidates think they want capitalism. But what they propose is varying degrees of government intervention, redistribution, and crony capitalism. It’s going to take decades of elections to replace politicians who have this mindset with people who understand free markets and liberty. Inch by inch.

Sanders, Trump, and John Maynard Keynes, by Hunter Lewis, Sanders thinks our current Keynesian crony capitalist system is capitalism. Trump thinks our current Keynesian crony capitalist system is socialism. Their cure is more government intervention in different ways. Sanders wants redistribution of wealth, and Trump wants a mercantilist attitude about trade.

Donald Trump’s Contempt For The Free Market, at Trump wants to stop Ford from building an auto plant in Mexico by putting a tariff on the goods Ford will bring in from Mexico. Government regulations and taxes incentivized Ford to move the plant. So instead of using more Government force to create different incentives, why not get rid of the regulations and taxes that produced the original incentives?

My Letter To The NY Times re: My Advice To The ECB And The Fed, by Patrick Barron, at Excerpt from the article. “If the Fed wishes to prevent financial crises, it only needs to stop initiating them. The Fed’s hubris that it can fathom the proper interest rate for our vast and complex economy must rank among the greatest fallacies of all time. The Fed sees the world through the completely discredited Keynesian lens which posits that aggregate demand–what the rest of us know simply as spending–is the path to prosperity. Anyone who believes this nonsense need ask himself why he has not liquidated his own savings on frivolous consumption…

Global Stocks Soar On Surprise China Rate Cut, by David Gaffen, at Is anyone shocked that global stock markets soared when China’s central bank cut interest rates and the European central bank said they will increase the size of its quantitative easing (electronically printing counterfeit money) program? How strong is the world economy when the central banks of China, Europe, and the U.S. have to lower interest rates and print money to keep it afloat?

The Cronies: Half Of All Export-Import Bank Benefits Go To 10 Companies, at The Exim Bank, backed by your tax dollars, finances transactions so foreign customers can buy from American companies. These are transactions that private banks wouldn’t make because of the commercial and political risks inherent in these deals. It’s easier to be risky when it isn’t your money. By the way, does this seem like a money laundering scheme?

A Tax I Can Support, by Per Byland, at This just might work. Unfortunately politicians would never pass it.

Justin Trudeau Elected Canada’s Prime Minister; Young Liberal Star Compared To Obama, at How could this happen? Were Canadian citizens not aware of what has been going on South of their border over the last seven years? Oh wait! What about this article? Obama Campaign Team Hands Canada Over To Lib-Left, at

Is The New Higher Seattle Minimum Wage Destroying Restaurant Jobs In Seattle? at The answer is yes. Because the law of supply and demand states: Less is demanded at a higher price. This includes labor.

Actors In Los Angeles File Lawsuit Against Actors’ Equity Over Wage Hike, at I guess a minimum wage increase is only cool when it doesn’t affect you.

Michigan Governor Signs Bills Reforming Civil Asset Forfeiture, Some good news for liberty.

Rhonda Rousey Shuts Down Feminist.

There’s a difference between merit and value. You don’t get payed for how hard you work. You get paid for the value you produce. Who works harder; a man with a shovel digging a ditch, or a man on a backhoe digging a ditch? It doesn’t matter. The real question is; who produces the most value?



Central Planners Hate Economics

August 26, 2015

F A Hayek

F.A. HAYEK The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.


Politicians get voted into office because they promise to use the power of government to ‘do something’ to fix fake ‘crises’. They try to blame the unfettered free market for every inequality or unmet need found in society. Politicians blame economics because it is an easy target since most people don’t understand basic principles of economics.

Economic reality puts a limit on the unlimited designs of planners. The first law of economics, scarcity, especially the scarcity of knowledge, sees to it that everything has limits. Economic laws don’t limit the planners plans. Economic laws reveal the reasons the plans won’t work but they don’t create the underlying economic reality.

Ludwig von Mises

LUDWIG VON MISES  – “Economic history is a long record of Government policies that failed because they were designed with a bold disregard for the laws of economics.”

Planners have charged their central banks to do away with scarcity by using electronically printed counterfeit money. It sounds plausible on the surface if you look at ‘that which is seen’. But we all know from reading Bastiat that ‘that which is not seen’ is more important. The unintended consequences of Central Bankers policies, of money printing and zero percent interest rates, are playing out right now for all to see. Wasted resources and capital consumption are two of these results.

F. A. Hayek – “It has already been suggested that it is not necessary for the working of this system (free market capitalism) that anybody should understand it. But people are not likely to let it work if they do not understand it.

Central planners condemn free market capitalism because it doesn’t produce perfect results, (which means it doesn’t produce their desired result). Free market capitalism is the best system for allowing individuals the freedom to pursue their desires. This individual freedom has lifted the masses of people to a higher standard of living. Is it perfect? Nothing that man does is perfect. It is the responsibility of each voter to understand basic economic principles in order to protect the free market from the planners who want to destroy it. Start now because your individual freedom to pursue your interests in a free market is under siege.


LUDWIG VON MISES  – “Many think that governments are free to achieve all they aim at without being restrained by an inexorable regularity in the sequence of economic phenomena….they maintain that the state is God.”

These quotes by Hayek and Mises came to mind as I was reading an article titled, Economics Is Dead, And It Is Being Killed Again, by Per Bylund, at here are some excerpts from the article.

“You have to applaud the anti-economics left for this rhetorical masterpiece. They have struggled for decades to sink the ship of economics, the generally acclaimed science that has firmly stood in the way of their anti-market and egalitarian policies, hindered the growth of big government, and raised obstacles to enact everything else that is beautiful to the anti-economics left. The financial crisis is exactly the excuse the Left has been waiting for. It is a slam dunk: government grows, Keynesianism is revived, and economics is made the culprit for all our troubles.”

“If this weren’t so serious, it would be amusing that the failure of Keynesian macro-economics (whether it is formally Keynes’s theory or post-Keynesian, new Keynesian, neo-Keynesian, monetarist, etc.) is taken as an excuse to do away with sound micro-economic theory to be replaced with Keynesian and other anti-market ideas. But it is not amusing. If most of the discussions heard are to be believed, the failures of central planning is a reason for central planning, just like socialism is a reason for socialism. The success of the market, on the other hand, is not a reason for the market.”

“…. the Left hates all that is economics. Because it points out that creating a better world through central planning, money-printing, and political manipulation is indeed impossible. The market is neither perfect nor efficient, but it is better than any available alternative. In fact, the unhampered market is the only positive-sum means available for human society. The market is indeed the only way of progress; all else is a step backward.

Related ArticleCapital Consumption aka. Eating Our Seed Corn, at

Related ArticleWe’re All Born In The Middle Of The Story, at

Related ArticlePolitician’s “Affordable” Ideas Must Obey Economic Forces, at


Must Reads For The Week 6/13/15

June 12, 2015
The pen is mightier than the sword...

 The pen is mightier than the sword… (Photo credit: mbshane)

Government Subsidies Helped Elon Musk Attain $13.3 Billion Net Worth, at Crony capitalist Elon Musk says his companies would still be in business without government assistance. Why doesn’t he try it without our tax dollars, just to see if he is right.

Obamacare Is Working Even Better Than President Obama Expected, by Peter Sunderman, at The president either had low expectations, or he expected healthcare premiums to “necessarily sky-rocket”.

Department Of Justice Uses Grand Jury Subpoena To Identify Anonymous Commenters On A Silk Road Post at Reason.Com, at A quote by George Washington comes to mind. “Government is not reason, it is not eloquence, it is force, like fire it is a dangerous servant, and a fearful master.

Lake Wobegon On Steroids, Where All The Students Are Valedictorians, by Mark J. Perry, at Carpe Diem blog. From the article, “Roughly 20% of all graduating seniors at Dublin Ohio’s three high schools were awarded valedictorian status”.  With 222 recipients, there really is no status in being awarded valedictorian status.

Jail For Missed Days At School? The Madness Of Truancy Laws, by Walter Olson, at From the article. “Washington Post columnist Petula Dvorak has reported on a 13-year-old straight-A piano prodigy charged with truancy in D.C. for taking ten days off to play on international concert stages.” Remember the above quote by George Washington, “Government is not reason, it is not eloquence, it is force, like fire it is a dangerous servant, and a fearful master.

Texas Police Officers Shutdown Girls Lemonade Stand Because They Didn’t Get Health Permit, at These two young entrepreneurs learned a great lesson about what the greatest impediment to their success will be, government intervention. The good news is they did what we all do when it comes to government regulation, they found a way around it. The cop said this, We just have to enforce ’em, we don’t write ’em.” This is the problem. There laws regulating everything. Police Chief Clyde Carter stated this gem, “It’s illegal to sell lemonade without a permit. But we didn’t tell them to shut down, we just asked them to get a permit.” I have a question for Chief Carter. If they wouldn’t have gotten a permit, would you have shut them down or let them continue. I think verbal sleight of hand artist Chief Carter has a bright future in politics. “Government is not reason, it is not eloquence, it is force, like fire it is a dangerous servant…...”

House Approves New NSA Reform Measure, at Representative Thomas Massie got his amendment concerning collusion between the National Institute of Standards and Technology, the NSA, and the CIA concerning encryption standards. I know it’s hard to believe but these agencies were weakening encryption on consumer telecom services, so they could put back doors into the software for the purpose of spying on you without a warrant. “Government is not reason, it is not eloquence, it is force……”

U.S. Tech industry Appeals To Obama To Keep Hands Off Encryption, at Does this have anything to do with the above article? “Government is not reason, it is not eloquence…..”

Channel Stuffing The Economy: There Has Never Been More Cars “On The Sidelines“, at Cars are counted as sold when manufactures sell them to dealerships. So even though consumers haven’t purchased the cars they are still counted as sold. You can show increasing sales by stuffing your cars onto dealers lots.

20 Years Later, Bill Clinton’s Home Ownership For America Is Dead, at Lowering lending standards created demand for borrowed money to purchase housing. The Federal Reserve supplied this demand with electronically printed counterfeit money. This brought future consumption into the present. What will replace this future consumption when its time comes? If you look at the chart in the article, you can see the government induced boom and corresponding bust. This boom and bust shows how real future consumption was moved forward in time, followed by less demand as the future became the present. A lot of future demand for goods and services was and is being used up by mortgage payments. Fed counterfeiting and Keynesian government spending distorts markets, enriches those who receive the counterfeit money first, and wastes scarce resources.

The Simplest Way To Describe Keynesianism In One Photo, at Keynesian government spending takes water out of the deep end of the pool and dumps it into the shallow end.

Cartoons From The Burning Platform.

Political Cartoons by Chip Bok

Political Cartoons by Dana Summers





Minimum Wage Laws Create Unemployment.

February 25, 2013
Economic theory suggests an excessive minimum ...

Economic theory suggests an excessive minimum wage may raise unemployment as it fixes a price above demand for labour, although a reasonable minimum wage enhances growth because when poorer workers have more to spend it stimulates effective aggregate demand for goods and services. (Photo credit: Wikipedia) Read about what is in bold print below.


In the State of the Union address, the President called for the minimum wage to be raised to $9 an hour. Politicians who propose minimum wage laws are trying to gain the moral high ground on the “morally inferior” people who oppose these laws, they are not trying to help low wage low skill workers. These politicians think that making a law mandating employers pay their employees higher wages, will fool the public into thinking they are morally superior to their opponents. They prey on the emotion of the public and hope the public will not analyse what happens when wages are set higher than they would be under unhampered market conditions. Unfortunately the consequences of the legislation turn out to be different from the utopian promises that the public, and the media, so desperately want to believe can be delivered.


Labor is supplied on the market like any other good, but the public has been brainwashed by Marxist propaganda to believe that an individuals labor is special, and should not be subject to the morally neutral forces of supply and demand. (more…)

Ben Swann Fox 19 Reality Check. What is QE3?

October 2, 2012

You will not find any reporter speak the truth like Ben Swann does in his reality check segments on Cincinnati Fox 19 News. We’ve talked about quantitative easing in previous posts, and this video is an outstanding explanation which will add to our understanding about economics and what happens when Government intervenes.

Ben Swann has enough respect for his viewers to tell them the truth.

Keynesianism vs. The Austrian School.

September 19, 2012

F. A. Hayek — “The coordination of men’s activities through central planning and through voluntary cooperation are roads going in very different directions: the first to serfdom and poverty the second to freedom and plenty”.

This quote by Hayek sums up the ideological battle being waged around the globe today, but especially here in America. This is not a new fight. The Revolutionary War was fought over freedom of the individual to order his life as he sees fit, versus the power of a King to take those decisions from him and make him a subject. Library shelves can be filled with the volumes of books that deal with this ideological battle, summed up so brilliantly in one sentence by Hayek.

This Keynes vs. Hayek rap video deals with Keynesian intervention, vs. the Austrian Business Cycle Theory.

The rest of the above quote by Hayek is —  “The battle for freedom must be won over and over again, the socialists of all parties must be persuaded or defeated if they and we are to remain free men.”

The Fight of the Century Keynes vs. Hayek Round Two is better. Click on it when it pops up after the first video finishes playing.