Having looked at how out to lunch The Economist is I picked up The AFR over lunch and found this: OECD blasts reform fatigue, downgrades growth and calls for more rate cuts. They called for more than that, and this being the OECD, is the collective economic wisdom of the West. It is no wonder we are heading so deeply into recession.

Warning that global growth is faltering so fast there now needs to be a fresh wave of budget spending and interest rate cuts, the OECD demanded governments spend more money on investments and infrastructure, and get serious about productivity-boosting reform.

Officials at the Paris-based organisation also described the risk of another financial mishap on global markets as “substantial”. . . .

In the absence of fresh economic reform momentum, the OECD acknowledged there was now an urgent need to raising government spending on investments such as infrastructure, which they said would generate a strong growth dividend.

“Quality infrastructure projects would help to support future growth, making up for the shortfall in investment following the cuts imposed across advanced countries in recent years.

“A commitment to raising public investment collectively would boost demand while remaining on a fiscally sustainable path, the OECD said, pointing out that governments in many countries can borrow for long periods at very low interest rates.

“Many countries have room for fiscal expansion to strengthen demand.” . . .

“A recovery in private sector investment and wage growth is needed for global economic activity to accelerate.”

Anyone educated in economic theory before 1936 would think such advice was insane. Today it is mainstream and almost unquestioned anywhere in policy circles. And if this were still 2009, there might be some reason to experiment with a Keynesian stimulus. But now, after what we have seen, how can they keep pushing economic policies that have unmistakably failed! It’s the supply side, and only the supply side, that will bring recovery, which means recovery must be private-sector driven with no handouts to business of any kind by governments.

MR RUSTY AND HIS LIBERTY LINE OF APPAREL: The things you find when you go into the comments! The image is part of a T-shirt made with just the right sentiments for our stressed economic times. No one should be without one. Here is where you can order:

Which comes with the text:

Author of the second worst economics textbook of all time and Chief wrongologist John Maynard Keynes has sadly influenced many Treasurers, economists and politicians who have adopted Keynesian economics in the mistaken belief it will grow economies.

And might I say, I can only hope this becomes a prime example of how supply [which must always come first] is able to create demand [which then follows someone’s putting some good or service up for sale].