Exhuming Keynes is not enough

My last post on Slugger, which mapped three decades of slowing growth in the US was met with the response that I must be a Keynsian. I’m not. Actually I’m not an ‘anyone-ian’ but my views are more complicated than I have previously outlined on Slugger.

Many of the things people believe about markets are actually not true. For example, 90 per cent of investment expenditures are drawn from operating profits, not stock. As a result of takeovers and buybacks in recent years, more stock has been retired than issued, resulting in the cold, hard fact that net new stock offerings were minus eleven per cent of capital expenditure between 1980 and 1997, making the stock market a negative source of funds.

The political left, meanwhile, trades in sentimental and economically illiterate caricatures that don’t bear up to scrutiny.

Now that I’ve alienated everyone where does that leave me? Mostly laughing at the idea that the recession is over. However, unlike the catastrophists of both left and right, I don’t think recessions have any progressive qualities whatsoever. People can complain about the ‘greed’ of the Celtic Tiger or the UK’s decadent boom in second-hand houses but both were better than what we are now faced with. What’s the real question in politics? It’s the stupid economy.

  • Mark McGregor

    I thought everyone knew by now you are a libertarian/anarchist but so trying to hide it? (badly)

  • Jason Walsh

    Heh, I’m just some guy.

  • Mack


    Ireland’s ‘exit’ from recession has been driven largely by a temporary rise consumer spending

    I think it’s more the collapse in Sterling reducing the cost of imports (thus increasing net exports – even as exports fell). Consumer spending down 7.5%..

  • Gréagoir O Frainclín

    Hurray! Huzzah! …the recession in the South is over….
    So…1, 2 3, c’mon everyone raise your glasses and join in….”We’re in the money (again) , we’re in the money (again), we’re in the money (again)…..

    “My only regret in life is that I did not drink enough champagne”

    John Meynard Keynes!

  • aquifer

    Keynesianism may suggest that all expenditure is equally good in a recession, but the truth must be than some expenditures are better than others if they lead to less imports, more efficient production, and less long term damage to the environment or to people.

    It is pitiable that it takes a recession to ‘discover’ ideas like the ‘Green New Deal’.

    It’s as if rising asset prices had people intoxicated, hoping that a rising economic tide would ‘lift all ships’, providing am ever bigger surplus to redistribute to all.

    Maybe the lesson is than leaky ships with crap captains will sink sooner or later.