Forum

 
  Back to OzPolitic.com   Welcome, Guest. Please Login or Register
  Forum Home Album HelpSearch Recent Rules LoginRegister  
 

Page Index Toggle Pages: 1
Send Topic Print
Is Keynesianism dead? (Read 1033 times)
bogarde73
Gold Member
*****
Offline


Anti-Global & Contra Mundum

Posts: 18443
Gender: male
Is Keynesianism dead?
Oct 22nd, 2016 at 3:32pm
 
I've never believed so. In dealing with slumps I still believe, as I was taught many years ago, that it provides the answer.
The essence of it is deficit financing in times of recession or worse to fund projects of long term value as a means of stimulating aggregate demand in the economy.

And there's the rub - "to fund projects of long term value". It doesn't mean shovelling money out the door for any purpose at all. Keynes did say once that digging holes in the ground and filling them in would be viable, but he was joking at the time. It has since become an urban myth that he advocated it seriously.

In 2008 we had a lot of unrewarded spending entered into without due consideration. Without making this a political argument, sending everybody a cheque for X dollars doesn't satisfy the test of a continuing fiscal multiplier. Nor does spending on projects that later require a lot of money to rectify.

Some countries now are establishing or looking at Independent Infrastructure Commissions, whose purpose is to investigate & cost-benefit projects that can be shovel ready at appropriate times in the business cycle. And obviously these off the shelf projects would need to be kept in a state of readiness in terms of planning & analysis. Some of these would be embarked on in the normal course of public works programs and have to be replaced on the shelf by others.

These would be projects however that are of long term value, that keep on giving in terms of value and economic stimulus. We could do worse than look at such a Commission for ourselves. Projects of long-term value have long lead times in planning but can be brought to a state of readiness in anticipation. Of course, some things these days are not so employment-producing as they were in the past, but some are. Public housing for example.

I think Keynesian economics belongs in its rightful place in govt policy. Monetary policy has failed. Austerity for its own sake has failed.
You have to spend a buck to make a buck and that's as true of govt spending as it is of business spending.

We have been bushwhacked since the 1970s-80s by a number of economic theorists who wanted to make a name for themselves ang get a Nobel prize for coming up with something new.
Something new isn't necessary as fit for purpose as something old.
Back to top
 

Know the enemies of a civil society by their public behaviour, by their fraudulent claim to be liberal-progressive, by their propensity to lie and, above all, by their attachment to authoritarianism.
 
IP Logged
 
Ajax
Gold Member
*****
Offline


CO2 has never controlled
temperature on Earth

Posts: 10952
Australia
Gender: male
Re: Is Keynesianism dead?
Reply #1 - Oct 23rd, 2016 at 9:58am
 
Quote:
Is Keynesianism dead?


Sure is.

Neoliberalism was the vehicle that placed the oligarchy above governments and nations.

Now it doesn't much matter what the system is.

As Amschel tells us below.............!!??

Quote:
"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild


Back to top
 

1. There has never been a more serious assault on our standard of living than Anthropogenic Global Warming..Ajax
2. "One hour of freedom is worth more than 40 years of slavery &  prison" Regas Feraeos
 
IP Logged
 
The_Barnacle
Gold Member
*****
Offline


Australian Politics

Posts: 6205
Melbourne
Gender: male
Re: Is Keynesianism dead?
Reply #2 - Oct 23rd, 2016 at 10:20am
 
bogarde73 wrote on Oct 22nd, 2016 at 3:32pm:
sending everybody a cheque for X dollars doesn't satisfy the test of a continuing fiscal multiplier. Nor does spending on projects that later require a lot of money to rectify.



That was a reaction to a unique set of circumstances. The GFC sent a lot of countries to the wall. Australia didn't even have a recession.

My main criticism would be for the Howard/Costello years. The surpluses were frittered away on middle class welfare and now we have a infrastructure deficit.

It makes sense to borrow for infrastructure projects that will in the long term pay for themselves, especially now that interest rates are at all time lows. Unfortunately, thanks to scare campaigns from Tony Abbott and his ilk, "borrow" and "deficit" have become politically poisonous.
Back to top
 

The Right Wing only believe in free speech when they agree with what is being said.
 
IP Logged
 
Ajax
Gold Member
*****
Offline


CO2 has never controlled
temperature on Earth

Posts: 10952
Australia
Gender: male
Re: Is Keynesianism dead?
Reply #3 - Oct 23rd, 2016 at 10:45am
 
The_Barnacle wrote on Oct 23rd, 2016 at 10:20am:
bogarde73 wrote on Oct 22nd, 2016 at 3:32pm:
sending everybody a cheque for X dollars doesn't satisfy the test of a continuing fiscal multiplier. Nor does spending on projects that later require a lot of money to rectify.



That was a reaction to a unique set of circumstances. The GFC sent a lot of countries to the wall. Australia didn't even have a recession.

My main criticism would be for the Howard/Costello years. The surpluses were frittered away on middle class welfare and now we have a infrastructure deficit.

It makes sense to borrow for infrastructure projects that will in the long term pay for themselves, especially now that interest rates are at all time lows. Unfortunately, thanks to scare campaigns from Tony Abbott and his ilk, "borrow" and "deficit" have become politically poisonous.


We may not have felt it but today we owe $650 billion because of it.

You need governments to have welfare systems or you would be too scared to go down the local shops, work or go out for a good time. No welfare and it becomes a jungle of who can eat who.

I don't mind if we borrow and build it our selves, but these days we (government) borrow and hand over the cash to private industry and then they (industry) turn and slap a life time of tolls on the users.

It just doesn't add up..... Cheesy
Back to top
 

1. There has never been a more serious assault on our standard of living than Anthropogenic Global Warming..Ajax
2. "One hour of freedom is worth more than 40 years of slavery &  prison" Regas Feraeos
 
IP Logged
 
perceptions_now
Gold Member
*****
Offline


Australian Politics

Posts: 11694
Perth  WA
Gender: male
Re: Is Keynesianism dead?
Reply #4 - Oct 23rd, 2016 at 12:15pm
 
So, which Economic Theory, is going satisfactorily deal with -
1) Political ineptitude from most Politicians?
2) Greed from many, if not most, But PARTICULARLY THE POLITICIANS & THOSE IN THE TOP 10%?
3) The halving of the Global Population, over a 50-60 year period?
4) The expiration of many, in not most, Energy Sources, over the same period?

And, the answer is - NONE OF THEM!
Back to top
 
 
IP Logged
 
freediver
Gold Member
*****
Offline


www.ozpolitic.com

Posts: 47066
At my desk.
Re: Is Keynesianism dead?
Reply #5 - Oct 24th, 2016 at 12:23pm
 
The biggest legacy of Keynes is the reserve bank. It isn't going anywhere. The GFC would have been twice as bad without it.
Back to top
 

I identify as Mail because all I do is SendIT!
WWW  
IP Logged
 
perceptions_now
Gold Member
*****
Offline


Australian Politics

Posts: 11694
Perth  WA
Gender: male
Re: Is Keynesianism dead?
Reply #6 - Oct 24th, 2016 at 5:49pm
 
freediver wrote on Oct 24th, 2016 at 12:23pm:
The biggest legacy of Keynes is the reserve bank. It isn't going anywhere. The GFC would have been twice as bad without it.


And, just how will the Reserve Banks deal with -
perceptions_now wrote on Oct 23rd, 2016 at 12:15pm:
So, which Economic Theory, is going satisfactorily deal with -
1) Political ineptitude from most Politicians?
2) Greed from many, if not most, But PARTICULARLY THE POLITICIANS & THOSE IN THE TOP 10%?
3) The halving of the Global Population, over a 50-60 year period?
4) The expiration of many, in not most, Energy Sources, over the same period?

And, the answer is - NONE OF THEM!


PS - I'll give you a hint, LOOK AT JAPAN, SINCE 1990!
Back to top
 
 
IP Logged
 
freediver
Gold Member
*****
Offline


www.ozpolitic.com

Posts: 47066
At my desk.
Re: Is Keynesianism dead?
Reply #7 - Oct 24th, 2016 at 8:19pm
 
The reserve bank isn't going to tie your shoelaces either Perce. That doesn't mean it is a bad idea.
Back to top
 

I identify as Mail because all I do is SendIT!
WWW  
IP Logged
 
perceptions_now
Gold Member
*****
Offline


Australian Politics

Posts: 11694
Perth  WA
Gender: male
Re: Is Keynesianism dead?
Reply #8 - Oct 26th, 2016 at 5:04pm
 
freediver wrote on Oct 24th, 2016 at 8:19pm:
The reserve bank isn't going to tie your shoelaces either Perce. That doesn't mean it is a bad idea.


1) On most occasions last century, Central Banks would &/or could have, had substantial & quite possibly, positive impacts on outcomes in the local & Global Economy!

2) Given the current set of circumstances, which are impacting the Local & Global Economy, the impact of Central Banks is now substantially reduced.
In fact, CB's are now at the point where they are no longer able to manage satisfactory outcomes, either on a Local OR Global scale!

3) An unbiased review of of Japan post 1990 &/or Europe/USA post GFC will confirm the above!

In short, the time of CB's & much of what Global Politicians have been able to rely on, has now passed into history!
Back to top
 
 
IP Logged
 
freediver
Gold Member
*****
Offline


www.ozpolitic.com

Posts: 47066
At my desk.
Re: Is Keynesianism dead?
Reply #9 - Oct 27th, 2016 at 12:59pm
 
Prior to the GFC hitting, reserve banks were pushing the interest rate up towards 10%. Since then they have been closer to zero. Apart from all the media hype, most people have not even noticed the 'crisis'.
Back to top
 

I identify as Mail because all I do is SendIT!
WWW  
IP Logged
 
Bias_2012
Gold Member
*****
Offline


Australian Politics

Posts: 10171
Gender: male
Re: Is Keynesianism dead?
Reply #10 - Oct 27th, 2016 at 6:10pm
 
freediver wrote on Oct 27th, 2016 at 12:59pm:
Apart from all the media hype, most people have not even noticed the 'crisis'.




Because they don't bother peeking at their super statements
Back to top
 

Our Lives Are Governed By The Feast & Famine Variable
 
IP Logged
 
perceptions_now
Gold Member
*****
Offline


Australian Politics

Posts: 11694
Perth  WA
Gender: male
Re: Is Keynesianism dead?
Reply #11 - Oct 27th, 2016 at 7:14pm
 
freediver wrote on Oct 27th, 2016 at 12:59pm:
Prior to the GFC hitting, reserve banks were pushing the interest rate up towards 10%. Since then they have been closer to zero.
Apart from all the media hype, most people have not even noticed the 'crisis'
.


Lowering of interest rates, has been one from the standard CB "Playbook" and during much of the last half of the 1900's, it generally contributed toward a Real Economic recovery.
On this occasion, following the Japanese decline from 1990 & the subsequent GFC it has had "little to no Real impact or Economic recovery and that is because of the reasons I have discussed previously!


Oh, I think you may not fully understand what is now "beginning" to be recognised!?

Back to top
 
 
IP Logged
 
freediver
Gold Member
*****
Offline


www.ozpolitic.com

Posts: 47066
At my desk.
Re: Is Keynesianism dead?
Reply #12 - Oct 31st, 2016 at 10:27pm
 
Tell me Perce, how do you think paying 3% on your home loan rather than 9% affects your ability to recover from the GFC? Are you seriously trying to tell us it makes no difference? Or are you still waiting for the reserve bank to tie your shoelaces?
Back to top
 

I identify as Mail because all I do is SendIT!
WWW  
IP Logged
 
Page Index Toggle Pages: 1
Send Topic Print