Posts tagged Keynes
By Steve Forbes, reprinted from Forbes.com
There’s one big story this year that won’t garner headlines but will have a profound impact on our future: The edifice of post-Great Depression economics is coming under an ultimately mortal intellectual assault. And a good thing, too. The entire way we measure the economy is fundamentally flawed…. The current methodology has been a critical enabler for the obese growth of Big Government.
Adam Smith taught that economic activity is composed of transactions between two or more parties. For example, I go to a restaurant: They give me food; in return I give them money, which the eatery then uses to pay for such things as salaries, utilities, raw food, etc. So, as Amity asks, how in the world can consumer spending make up 70% of the economy? We’re all consumers, and we’re all suppliers.
Countless other absurdities abound in the way we are taught economics. Take, for instance, the Keynesian notion of “aggregate demand,” the idea that we can measure the total demands of consumers the way we can the number of gallons of gas in an automobile. It’s one thing to count how many iPads or PCs we buy but quite another to think that a single number can truly sum up how an economy does as a whole. Quality goes by the boards.
The old Soviet Union turned out industrial product that was mostly subgrade or pure junk. But all this outdated industrial garbage was given a monetary number by Soviet economists and planners; thus the Soviet economy looked like it was turning in a pretty good performance. GDP numbers couldn’t tell the difference between East Germany’s clunky, junky Trabant and West Germany’s Volkswagen. Thus, from the early 1960s through the mid-1980s, Nobel Prize-winning economist Paul Samuelson could proclaim in his once ubiquitous textbook, Economics: An Introductory Analysis (McGraw-Hill, 1948), that the U.S.S.R.’s economy would surpass that of the U.S.
Because we had faith in the notion that the actions of the 300 million-plus people in this country–or any country–can be tidily summed up in a single number, we accepted an inflated estimate of the communist economies’ strength during the Cold War.
Put more simply, the whole idea of macroeconomics is a fraud.
Austrian: Peter Schiff, May 2002, “People are starting to see that Wall Street is conning them.”
Peeved about the bailouts estimated to be as high as $23 TRILLION?
Angry at Wall Street getting a free pass while your student loans, mortgage and credit card bills stay high?
Furious at the massive bonuses on Wall Street paid out of taxpayer bailout money?
Well then my friend you have a choice: you can decide to get angrier and angrier until you spontaneously combust with rage, or you can educate yourself on the alternatives to this type of economic thinking known as Keynesian Economics and take action.
The following video illustrates that the leadership of The Federal Reserve and other major economic leaders like Paul Krugman and Ben Stein are either totally underserving of our economic respect or intentionally crippling this country’s economy.
Now, considering the The Fed has spent trillions in your tax dollars and has bailed out foreign banks while your debt remains dangerously high what do you think about a private bank (yes, The Federal Reserve is a private business) that is supporting foreign nations with YOUR money?
If you’re wondering about alternatives to this system check this out:
End The Fed, by Dr. Ron Paul
In the attached interview with Lawrence “Larry” Reed we seek to inspire and empower while proving the validity and value of individual rights, personal responsibility and liberty-promoting solutions.
Mr. Reed draws upon his wealth of real-world knowledge with specific and humorous examples that prove it’s never too late for a nation and a people to turn from tyranny and government dependence to peace, prosperity and self-reliant success.
As a freelance journalist for over 20 years, his insights and theories have been forged in the brutal testing ground of the real world not just in college lectures halls–although he does have degrees in economics, history and public administration. In addition to his leadership with FEE, Mr. Reed also serves as President Emeritus of The Mackinac Center for Public Policy.
From living with guerilla fighters during the height of Mozambique’s civil war to being arrested in communist Poland while traveling with illegal resistance groups his knowledge is matched by his courage, character and commitment to liberty.
I hope you enjoy watching the video as much as I did while making it.