Rising poverty and modern economic theory

This is the beginning of a story from the Associated Press which is also discussed here:

Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor and loss of good-paying manufacturing jobs as reasons for the trend.

These are not “reasons” for the trend, they are evidence of the trend. The reasons for the trend are the galloping socialism of the United States, and indeed of the entire previously free market oriented economies of the West. The continuous undermining of the independent, growth oriented entrepreneurial managed economies that have been the cause of our prosperity in the name of equality and no end of other junk social concerns have created a wreckage that will be very hard to reverse.

And amongst the many reasons it will be hard to reverse is that a large part of the problem is the Keynesian theory that is supposed to be the reason that we are able to withstand economic contraction and maintain strong rates of growth. The more economies are driven by public spending with the supposed intend of keeping them strong and unemployment low the worse the economies will behave and the higher that unemployment will be. Almost as a finger to the eye of common sense, the second of the articles cited ends with this:

This past week, Obama pledged anew to help manufacturers bring jobs back to America and to create jobs in the energy sectors of wind, solar and natural gas.

Well there’s the answer to their problems if ever there was one. Does he pursue these ends because he really believes it or is he intentionally malevolent with the express purpose of doing down the US while pretending he is trying to do it good? And I can only think he is pursuing jobs in “natural” gas because he is unaware that it is a form of carbon-based energy and not a green technology at all.

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