Blogging is for people who are sick of shouting at the TV set. Not much more satisfaction but at least you get to share it with others. I went back and looked at the first three posts I put up and I can see a certain kind of stability in my frustrations that trigger a post. The first one was titled, Cranks and crazies everywhere about government spending:
Here in Australia the Government pretends that it has some kind of strategy for getting the budget back into surplus of which two things may be said. The first is that – although in its words alone and not be its actions – by making the commitments they have made Gillard and Swan have at least recognised getting the budget into surplus is actually something that ought to be done. If there are therefore any cranks and crazies around in the US, it is the people who have been complicit in allowing the level of debt to rise to $US16 trillion with not a strategy in sight to bring it back down or, indeed, even to reverse its upwards course. What do our PM and Treasurer think of an Obama administration that has not presented a budget to Congress in three years? For Republicans to try to get some kind of fiscal action out of a Democrat Senate is just what anyone with sense would want them to do. If there are cranks and crazies around in the US, they are almost entirely found on the Democrat side of the aisle.
But the second matter shown by our leadership team is to see just how badly these people have mangled the one economy that has been in their charge. Handed not just a deficit free economy but an economy entirely free of debt, handed on a plate a mining boom designed to feed into a Chinese boom, they have managed in just five years to create massive debt and are about to oversee this forecast fall in living standards which is anyway evident in the shrinking of the private sector at the present time.
The second oldest post was about the American election, which have fascinated me all my life. My policy consistency is remarkable to myself, since from Kennedy to Reagan to Trump I have sought the same thing. This one was on Romney had already written about the 47% in his book published in 2010.
There has been quite a bit of focus on Mitt Romney’s having mentioned that 47% of the American population do not pay income taxes. And much of the commentary has been that he made the comment behind closed doors and out of hearing of most of the population. But the fact is that Romney had made the same comment and had made the same point in his book, No Apology, which was published in 2010.
Not that it mattered to anyone, least of all his fellow Republicans who were quite content, even then, to be a pretend opposition. Trump has exposed it all but most people in politics aren’t actually interested in policy. And the third of those early posts I will bring back is about Keynesian theory versus the classics, an old theme. Interesting, though, that this was a revelation to me even as recent as five years ago, put under the heading: Saving and Investment.
The deficits and debts we see around us everywhere are a consequence of a Keynesian model which has been fashioned on the belief that there is some means to conjure goods and services into existence merely by spending money to buy them. It is such a hopelessly false idea, but since something like 95% of the world’s economists believe this stuff, or at least have never stopped to think about it, on they go, advising governments to take actions to create demand for 105% of everything available for sale.
And because governments get first dibs at what’s available since they get to print the money they are buying things with, they don’t notice that there are no savings to back up the demands they make. It is the private sector that finds itself unable to grow and employ since the inputs they would normally have put to use have been already taken up by governments. But since economic theory tells governments this is the right thing to do even when common sense should tell them that it’s not, on they go, creating a wreck of any economy where this Keynesian stuff is being tried.
I’m afraid there is no helping it. We are going to have to abandon this demand side Keynesian view of things and return to the classics.
Anyway, progress does get made. Trump is president and Keynesian theory is rotting on the vine.
But this is still in large part a blog for me to communicate with family: Hi Joshi. And hi to the rest of you as well.