Government Intervention

Saturday 24 September 2011 - Filed under Uncategorized

Donald J Boudreaux, economist at George Mason University, on Keynesian economics:

But the differences between the Academic and the Vulgar versions of Keynesianism are minor. Academic Keynesianism is rooted in the same Vulgar Keynesian notion that the key to an economy’s success is total spending, and that private parties — consumers and investors — cannot be relied upon consistently to spend enough to keep workers fully employed. Government must help.

Perhaps ironically, one of the most powerful challenges to any Keynesian diagnosis of economic ailments also focuses on inadequate investment spending, but from a wholly different perspective. That challenge is today most closely associated with the economist Robert Higgs.

Higgs’ careful look at the data on the Great Depression and World War II convinced him that (1) a U.S. economy producing genuine prosperity wasn’t restored until 1946, and (2) investors hunkered down, especially from 1935-40, because New Deal regulations — along with President Franklin Roosevelt’s increasingly vocal hostility to enterprise and successful risk-takers — created too much uncertainty about how government would treat profits and wealth accumulation.

The “regime uncertainty” — described by Higgs as “a pervasive uncertainty among investors about the security of their property rights in their capital and its prospective returns” — unleashed by actual and threatened New Deal interventions made private innovation and entrepreneurial effort simply too unattractive. So private investment spending largely ground to a halt during FDR’s reign.

The “Great” was thus put into the Great Depression.

Thanks government! It’s nice to know that the government has chosen to disciple an economic theory which necessitates government involvement, and then creates the circumstances which perpetuate government involvement.

Also, government fucktards, can you just move the government OUT OF THE FUCKING WAY? Please?

2011-09-24  »  madlibertarianguy