Why the left is messing up its ‘big opportunity’…

Gerard O’Neill was on fire yesterday… His thesis? The Left is just girl who can’t say No!

…most Leftwing parties such as Labour in the UK (and Fianna Fáil during its “we’re all socialists too” phase), happily rode the waves of neoliberal, global financial capitalism during the boom, simply plucking a few feathers by way of taxes to fund their favourite boondoggles. But now that the hyper-leveraged ponzi scheme that hijacked the global financial sector has collapsed, the Left are dusting off their copies of Keyne’s General Theory in order to figure out how to maintain their favourite boondoggles even as the goose has started to hiss loudly.

The problem is that they should have been reading their Keynes (and better still, their Hayek) during the boom. Keynes would not have approved of the grossly pro-cyclical bloating of the public sector during the boom years that we witnessed in Ireland and elsewhere. But now the finance ministers and chancellors are quoting Keynes in their defence in order to assuage the anxiety of the international bond markets they so depend on.

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  • Mack

    I agree great post – he’s riffing off Steve Horowitz another Austrian influenced economist.

    That strikes me as one of the central tenets of Austrian Economics. Henry Hazlitt’s book “Economics in One Lesson” (with the classic examination of why breaking windows to fix them is bad economics) hones in on the difference between what he describes as good and bad economics. Bad economics focuses only on what can be seen – it’s easy to see the result of a government spending, but not the private investment that did not occur as a result. Thus government’s a prone to helping the special interest groups that scream the loudest, without realising their ‘aid’ may be damaging society at large. It takes a huge leap of faith to take a step back and hope / expect/ believe that others left in control of the wealth they generated will invest that wealth in a manner that will benefit society as a whole. The book is available free online here – http://jim.com/econ/contents.html . It’s well worth a read, particularly for died in the wool lefties 😉

    (That said, there are areas where I think it’s desirable that public spending crowd out private investment. Given the choice of a good public transport system or large numbers of private vehicles – I’d take the former all the time).

    Gerard’s conclusion was chilling too…

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