Keynes - Clashing With Reality bit Still Standing...

polifrog




Peter Ferrara

The now once again thoroughly discredited, failed Keynesian economics survives intellectually only because it provides cover to the politicians, and to their leftist media cheerleaders, to do what they want to do, which is spend like spoiled children, and not pay for it. But it is long past time for the rest of us to recognize Keynesian doctrine for the now outright intellectual corruption it is, and to hold the Keynesians personally accountable for it.

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Worst of all are the most ardent, hysterical and blind media advocates of Keynesianism, like Paul Krugman, who after Obama and his runaway all time government spending spree has taken America to the brink of fiscal insolvency, like a drunken back seat driver belches us on to accelerate even faster on our current course into the inevitable crash and burn.

That needs to be recognized as a form of personal lunacy, for which the only real solution appears to be the restoration of the laws providing for involuntary commitment.

In other words we traded real debt for no lasting gain. Keynes failed, FDR failed. The nation suffered.
We saw it again with the conclusion of WWII which was followed not by boom but by bust in the recession of 1945.

And in the most glaring example there is Japan which continuous the feel good Keynesian stimulus that has resulted not in boom, but a full generation of economic stagnancy. In Japan we see firsthand the real loss that was transferred to the unborn when Japanese leaders chose Keynesian solutions.

Those unborn are now young adults enduring the fiscal abuse metered out by elders who asked themselves:

Why not leave our children and grandchildren with debt? Why do they get to be the special generation with no debt?

and chose poorly.








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We are not Just in a Depression, We are in a Keynesian Depression...

polifrog


Depressions are created by Keynesian interventions as such interventions interfere with the market finding equilibrium.  Bubbles are unable to deflate and prices become dependent on government pumping.  The market stalls.

It happened in 1937 after six years of Keynes.  It has happened in Japan,  No ir is happening again in the US.

Now there is ObamaTax....
 
Rep. Henry Waxman (D-CA):

“The economy has not recovered… I think it’s a depression.”

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Is There No Place to Hide From a Deflating Credit Bubble?

polifrog


During the market crash in late 2008 and the ensuing government measures I wondered: Inflation or Deflation? The actions seemed inflationary at the time. This clearly has not been the case... If the deflationary pressures are great enough, can the Federal Reserve actually win a deflationary battle and more importantly can the Fed win a war of attrition with deflation.

Via SafeHaven .com:

The CRB quantifies the fact that ill-conceived money printing and socialization of "too big to fail" investment losses generated almost zero economic traction, and that the "coordinated" monetary effort can only be characterized as a failure of historic proportions.

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Why did this central bank effort fail so spectacularly? Why not one hint of hyperinflation? Simple. The credit bubble was imploding (and continues to implode) and credit losses sustained worldwide faster than the sum total of all additional artificial money created.

The normal economic stabilizers have been firing full throttle for nearly two years, and some of the propping up of home prices through purchasing incentives and Fed induced low interest rates through Quantitative Easing are coming to an end. The gains have been minimal and the fact that the fuel behind the stabilizers is running low has to make one wonder...what next?

Real estate's own relief rally has been built on historically low interest rates, massive government subsidy including socialization of mortgage losses, socialized refinance giveaways and buyer tax incentives, the banking industry's wink-nod holding off on foreclosures ("extend and pretend"), and the corporate media's daily hypnotic suggestion ("you're getting sleeeepy") that the bottom is in. But take a moment to ponder this: What if mortgage interest rates stood at even 8 or 9%, Federal and state real estate tax incentives never existed, the Fed and Treasury left mortgage debt issues to the market to contend with and foreclosures were brought to market without delay? The answer is that values would probably have sustained another 50% haircut right off the top. But governments can only prop up markets temporarily; in the end, it's all about gravity. Finding a true free-market bottom will be a slow and painful process, and history will show that everything the government and policymakers attempted to do to keep the bubbles afloat ended up making everything that much worse.

The Great Depression had a second leg down......





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