Controlling the economy

The debate over Keynesian economics rages on. The political class, buttressed by their “rented economists,”  argues that Keynesian intervention is necessary. When promised outcomes do not develop, it is claimed that the remedial dosages were too small. More spending will correct matters.

Increasingly, the efficacy of Keynesian Economics is doubted. Common sense, rather than sophisticated formulas and models, is all that is required to see through the false claims and reasoning. Mish provides his view of Keynesianism and “stagflation:”

Stagflation is one of those muddled terms that people debate over. The definition I prefer is inflation and recession at the same time. Using that definition, Brazil and parts of Asia are in stagflation now.

Recall that Keynesian theory stated recession and inflation at the same time were impossible. The 1970′s proved that theory to be rubbish.

Keynesianism should have died in the 70′s, totally discredited, but somehow it survived in academia where its nonsensical ideas still haunt us to this day.

Mish’s observations are correct, but the last one begs for explanation. Why would something so obviously wrong be maintained and expanded?

Quite simply, Keynesianism benefits the ruling class. It does not matter whether Keynesianism works. It is the basis for government controlling the economy and your life.  Keynesianism is the source of government growth and power. It provides the motivation and impetus to disregard the Constitution. Keynesianism has made every perceived fault or inequality in life a reason for political action. Keynesianism is an elitist’s dream.

Keynesian economics is wrong in theory and has no empirical support.  It slowly impoverishes nations by transferring wealth to the political class from the productive class. It increases the power of government at the expense of citizens. It is evil disguised as necessity and “science.”

Keynesianism, not campaign contributions, is the mother’s milk of politics. Its acceptance was “bought” via an elaborate government bribe system. Grants, the tenure system and Washington employment are all tools used to corrupt young economists. Rewards go to those economists who advocate active and interventionist government. Keynesianism is the tool of Statists.

Reduction is government’s size and power cannot be achieved without an outright rejection of Keynesian economics. That is why the political class defend it so strongly.