Which thinker is more relevant right now, Lord Keynes or Naomi Klein?
We’ve hit hard times. The Keynesian advice is to spend a lot of taxpayer money to make up for the lack of private spending, thereby jump-starting the injured market order.
Naomi Klein, on the other hand, is best known for her book “The Shock Doctrine,” in which she charged that free-marketers were conspiring to use social and economic crises as excuses to “take over” and remake the world in their favor.
Let’s look at the evidence, shall we? We’ve hit a crisis. The government has done the Keynesian thing. Unemployment went up, but … who has made the biggest gains?
USA Today reports that federal workers are enjoying a boom in both employment and salaries. “Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months” — and that’s not counting overtime and bonuses!
It’s not markets being stimulated, here, but government.
Not only is this Keynesianism on its head, but Naomi-Kleinism, too. Those who have taken advantage of the crisis are the ultimate insiders. As a Washington Examiner editorial puts it, “bad times for the rest of us are good times for the federal establishment.”
We could wish Naomi Klein were right.
But things aren’t getting better because she’s wrong.
This is Common Sense. I’m Paul Jacob.
2 replies on “Head Over Heals for Stimulus”
As I remember from Business School, Lord Keynes said government spending should be counter-cyclical to the business cycle. When the economy is booming, governments should spend less and build up a rainy-day fund. Then, when the economy is in a slump, governments should increase spending from the surplus fund. In this way, government can get the most bang for the buck! Prices are high and unemployment is low in boom times and prices are low in slack times!
The problem is that politicians have forgotten or ignore the saving half of Lord Keynes’ advice and just honor the spending half!
I am one of the many doubters of the Keynesian theory. Personally, I think Mr. Laffler has a more acute understanding of economic events.
Still, I also think there’s a lot more to this mess than meets the eye. And since we no longer have objective investigative journalists there is no way we will ever discover what I really suspect has happened.
Many will simply write me off as paranoid. However, history is replete w/ examples of the wealthy manipulating economies. There are many examples of the wealthy making much mischief. Some have even put entire national currencies in doubt. (Think Great Britain or France in the 90’s where monetary manipulations almost destroyed those national currencies & almost drove those nations into total bankruptcy)
I suspect we have been had by some who have specific ideological preferences, which ultimately make them wealthier & also make those persons, significantly more powerful politically.
Add to this a United Nations that is pushing a theory many suspect is ‘full of hot air,’ and one which the UN finally came right out & admitted meant, they & they alone would manage world economies & perhaps even world government.
It all sounds like wild conspiracy theory. But then with examples we have, and with events of today to back us up (events which many warned would do us serious harm, but were ignored or politically marginalized by power broker friends of some very wealthy people) & what we have is a real opportunity for some unscrupulous characters to do their level best to create an economic & political system which ‘they’ would control.
Maybe a forensic investigation by some whose purpose would be to extract truth, rather than a political answer, might just reveal facts to us which would reveal the truth. Maybe its all bunk, but then again, maybe its all too true!