Daily Archives: July 30, 2013

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Bringing John Keynes back from the dead (A rebuttal to Rick Kelo and other confused austarians)

Rick Kelo doesn’t understand economics, and he’s not alone. Most of this criticism I’d normally reserve for comments (more), but we’ve reached the point where denial of Keynesian economics is on the same intellectual level as the birther movement, and reminiscent of the Flat Earth Society and climate science denial. Isolated misunderstandings must be rebutted to prevent them from spreading to the larger public where they can do serious damage when adopted by know-nothing politicians and a simplistic media incapable of understanding these issues any better than Rick does.

A painful misunderstanding of the subject, especially in climate science, is always a common factor in these controversial and always unsupported views:

You may never have heard the name John Maynard Keynes, but he was the architect of Too Big To Fail and all the other government bail outs that have flooded the news for the last 5 years.

The modern idea of too big to fail is that America’s largest banks, where wealth has been concentrated at undesirable levels, have become too entwined with risk-heavy investment firms that their failure would cause the entire economy to collapse. That was the actual justification for bailing out Wall Street in 2008, made by Democrats and Republicans like Paul Ryan alike.

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