News item: Keynesians discover that they were right all along

Amusing.

Why Keynes is the Man of the Year

"It is this flight into cash that makes interest-rate policy such an uncertain agent of recovery. If the managers of banks and companies hold pessimistic views about the future, they will raise the price they charge for “giving up liquidity,” even though the central bank might be flooding the economy with cash. That is why Keynes did not think that cutting the central bank’s interest rate would necessarily — and certainly not quickly — lower the interest rates charged on different types of loans. This was his main argument for the use of government stimulus to fight a depression. There was only one sure way to get an increase in spending in the face of an extreme private-sector reluctance to spend, and that was for the government to spend the money itself. Spend on pyramids, spend on hospitals, but spend it must.

This, in a nutshell, was Keynes’s economics. His purpose, as he saw it, was not to destroy capitalism but to save it from itself. He thought that the work of rescue had to start with economic theory itself. Now that Greenspan’s intellectual edifice has collapsed, the moment has come to build a new structure on the foundations that Keynes laid."

Robert Skildesky has obviously not heard of Adam Smith. Or John Stuart Mill. Or Milton Friedman.

It is so ironic that after more than half a century of Keynesian fiscal and regulatory policies doing a find job of undermining their own intellectual premises with or without independent criticism, thank you very much (Robert has apparently forgotten about the stagflation of the 1970's and the price, wage, and other controls that made it possible), leftists are reveling in the "story" that it was just an elaborate conspiracy by conservatives against the unflinching virtue of progressives in the 20th century.

Sweet story, huh? Good guy liberals save the world from mean, evil, greedy conservatives. Ironic that these guys don't believe in good guys and bad guys, isn't it? Ironic that they believe in progress, at all, given that conservatives are still in our midst unawares, apparently, of the righteousness of the left's march of progress?

Never really occurred to them that perhaps they were wrong.

It will.

Because people get tired of the consequences of bullshit long before they get tired of the bullshit, itself. And there are plenty of consequences that neo-Keynsianism will serve up. Progressives will try to talk themselves out of them.

But that's the beauty of a free and open marketplace of ideas. You can run from the consequences of your poorer ideas. But you can't hide.

And, in economic matters as much as in other matters, the truth will set us free.

Bank on it.