John Mauldin's Outside the Box: Keynesian Confusion - by Michael E. Lewitt
Keynesian policies are inflicting untold damage on the U.S. and global economies today. Things did not have to be this way; Keynes did not have to be misread. His antidote for slow economic growth and high unemployment – massive doses of government spending – was appropriate in midst of the 2007-8 financial crisis, just as it was sensible during the 1930s global depression that Keynes was experiencing while he was writing The General Theory. In end of world scenarios, government spending is the last resort. But once the economy stabilizes – even at a diminished rate of growth - Keynesian medicine will cripple the patient if it is not withdrawn and replaced with a healthy fiscal regimen. Unfortunately, policymakers – in particular the current and past Chairmen of the Federal Reserve – have shown themselves to be either unwilling or incapable of making the transition from crisis management to post-crisis management of monetary policy. As a result, today’s Federal Reserve is missing the second great lesson of Keynes’ work, the “paradox of thrift.”
- Links
Bruce Greenwald: An Alternative Explanation of the Great Recession (video) [H/T ValueWalk] (LINK) ["What I'm going to start talking about, because this is a Minsky conference, is something that Hyman Minsky identified that's been largely overlooked...
- Hussman Weekly Market Comment: Out On A Limb - An Investor's Guide To X-treme Monetary And Fiscal Conditions
Government intervention in the U.S. economy is approaching the point where probable long-term costs exceed short-term benefits – straining to maintain the pace of extraordinary fiscal and monetary measures that have repeatedly nudged the U.S. economy...
- Keynes: One Mean Money Manager - By Jason Zweig
No one is a Keynesian now—at least not among money managers. And that is a shame. A new analysis of the investment performance of John Maynard Keynes proves that the famous economist also was one of the greatest investors of the past century. By understanding...
- Hoisington Q2 Letter
The three competing theories for economic contractions are: 1) the Keynesian, 2) the Friedmanite, and 3) the Fisherian. The Keynesian view is that normal economic contractions are caused by an insufficiency of aggregate demand (or total spending). This...
- Welcome To The Keynesian Nightmare - Annaly Capital Management
British economist John Maynard Keynes was an advisor to the American government in the 1930s when it was struggling to restart the domestic economy. The Depression was tragic but, to put it in historical context, Keynes and his client were dealing with...