http://www.youtube.com/watch?v=_9DH07MBG_w

http://www.youtube.com/watch?v=_9DH07MBG_w

The weather influences how much work is worth. Until we can predict the weather, we cannot know the terms of full employment.

First, he recognized that the market, as the singular democratic process, is superior to central planning by individuals and groups with limited knowledge and perspective.

Second, he recognized that some enterprises were naturally and effectively predisposed to, at minimum, central coordination. This is entirely in line with the wisdom of America’s founders.

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

The key to constraining the establishment of a de facto authoritarian monopoly is the phrase “general Welfare”. The founders recognized that involuntary exploitation, whether for reason of redistribution or retribution, is a principal cause of progressive corruption of individuals and society.

In “The General Theory of Employment, Interest and Money”, he identified at least one example of where central authority is desirable and strictly within the purview of the authority granted to civil servants. The notable example is the promotion of policies which promote full employment of the eligible population.

Third, apparently, he advocated for “stimulus” in the form of government spending with previous surplus revenue (e.g. “rainy day fund”). He did not, again from a limited review, advocate for the creation of a virtual economy (e.g. premeditated creation of false demand signals through the accumulation of debt).

The process and means followed by the current administration which are, ostensibly, contingent upon recommendation by his advisers, would therefore be considered incompatible with Keynes’ advice.

Dreams of physical, material, and ego instant gratification will not be denied.

A Democrat House, filibuster proof Democrat Senate and a Democrat President passed a nearly $1 trillion Keynesian stimulus bill. The result? About half the money went to state and local governments. That prevented the state and local governments from “right-sizing” to the new economic reality they faced. They avoided laying off state employees, so that the union bosses could keep collecting union dues which would then be funnelled to Democrat campaigns in the 2010 elections. (Fortunately, the Tea Party recognized this vile corruption and rose up).

Other Democrat constituencies were also favored with much of he remaining stimulus. I read that only about 5% of the total stimulus went to fund “infrastructure”, which is what Keynes himself recommended.

The other way to do fiscal stimulus is the much maligned Bush tax cuts. Contrary to popular Democratic demagoguery, EVERYBODY who drew a paycheck at the time the tax cuts were enacted got a tax cut, not just the rich as we heard endlessly for 8 years. Even the staunchest of Democrats, like George Soros, got a tax cut. The person who received the tax cut then gets to decide based on his unique circumstances how best to spend, save, or invest the extra money he took home each pay period. Which is more fair, letting the people who earn the money decide how to save, spend or invest it, or let politicians borrow money on your behalf and decide how they want to spend it – and stick you and your kids with the bill.

The answer seems obvious to me.

Exactly. The argument from a politician’s point of view (especially a left-leaning one) practically writes itself:

– When we’re in an economic downturn people need help so we have to spend more.
– When we’re in an economic boom we have a chance to fix every problem known to man so we really should spend more.

Of course, since needs are essentially infinite when you think you’re spending someone else’s money, there is no surplus in the boom times because it all gets spent. After all, there’s plenty of money, right?

“That suggests to me that Keynes failed to understand human nature.”

Bingo. As did Karl Marx.

Afer that, its not needed at all

In fact krugman should answer one question
In the absence of economy what usefulness is he?

Without a free press (or somewhat free) what need is there for a person that advocates its end and gives bad advice?

Tday he serves the point of a false cogent alternative, in a planned economy what use is there for an economist? Administration sans economy and servitude need nothing he can provide!

Could he explain politburo actions. And plans to people who have no choice or influence? Could he even speak his (wrong) mind? Who would listen? What if he then told the truth? What if he changed his mind?

What if the pragmatic thing would be to remove the burden of his existence for the good of the thankless many?

His three points do not verify Keynes, they verify that we headed into a deep depression.

Governments are broke. Only “new wealth” will be able to pay off such massive debt, and communists/socialists/Keynesians do not know how to create new wealth, only how to tax old wealth.

I didn’t address your earlier comment, where Keynes advocated running a deficit during economic downturns, and a surplus during boom times. Of course, politicians prefer to spend more than they take in all the time. That suggests to me that Keynes failed to understand human nature.