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Chris
12-24-2012, 01:47 PM
Perhaps the greatest modern champion of central economic planning was the twentieth-century English economist John Maynard Keynes. Keynes advocated the idea that the government should play a large, active role in the economy. Among the consequences of Keynes’ economic theories, whether intended or unintended, is the fact that Western economies today are characterized by large, central governments, central banks, and massive debts.

Government policies based on Keynesian theories and the institution of central banking form a nexus of central economic planning. Control of the central planning process is a winner-take-all proposition for businesses. In the U.S., the result is an unholy alliance of the U.S. federal government, the Federal Reserve (along with the largest U.S. banks), and the largest U.S. corporations. The logical chain beginning with Keynes’ fundamental idea that government, supported by a central bank, should play a large and active role in the economy sets the stage for a centrally planned economy and ultimately produces a corporate state.

The U.S. economy is locked in a downward spiral of economic decline. By growing in size, and by engaging in ever-larger economic interventions, the U.S. federal government became itself a material cause of the recession that began in 2007. By attempting to grow the economy through monetary expansion, the Federal Reserve destroyed savings and fueled a series of disastrous economic bubbles, culminating in the housing bubble.

Following Keynesian economic theories, the policy response of the U.S. federal government to the recession that began in 2007 and of the financial crisis that began in 2008 was to expand the government further and at a more rapid pace. In other words, some of the root causes of the economic imbalances that led to the recession and financial crisis (the relative size of the government and the resulting economic distortions) were compounded. As a consequence, the so-called “double dip recession” in the U.S. that began in the second half of 2011 will be longer and ultimately more severe than the economic downturn
of 2007–2009.

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In short it is big government that creates the means of crony capitalism.

This is not to say business doesn't take advantage and play a part in the collusion. But man, [url=http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=1662&chapter=36963&layout=html&Itemid=27]according to Franz Oppenheimer (]The Keynesian Abyss[/url), has two means to achieve what he wants, the political and the economic. It's only natural that man will take the easiest means, that being the political means.

We can either try to regulate and re-engineer man into something he is not, or we can limit man's constitutional invention, government.

KC
12-24-2012, 01:59 PM
@ The Keynesian Abyss (http://The Keynesian Abyss)

In short it is big government that creates the means of crony capitalism.

This is not to say business doesn't take advantage and play a part in the collusion. But man, according to Franz Oppenheimer (http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=1662&chapter=36963&layout=html&Itemid=27), has two means to achieve what he wants, the political and the economic. It's only natural that man will take the easiest means, that being the political means.

We can either try to regulate and re-engineer man into something he is not, or we can limit man's constitutional invention, government.

I hate to be so skeptical, but is either possible? I love the idea of constitutionally limited government but I just don't know if it's something we are able to turn back the clock on. I agree with the OP, Keynes is certainly a big part of that since he gave birth to the ideas that have been used ever since to justify big government in the economy, but as for the whole issue of currency, we've had this debate since 1787.

Chris
12-24-2012, 02:06 PM
Sometimes all you can to is stand athwart history, yelling Stop, as Buckley said. And maybe that's all we can do is slow it down.

Certainly it is not a change we can design and manage, for that would be to assume the same fatal conceit Keynes and his followers did.

I do see hope in the irony reported in Goodbye, Government, Under Either Fiscal Plan (http://www.nytimes.com/2012/12/19/business/say-goodbye-to-the-government-under-either-fiscal-plan.html?_r=4&adxnnl=1&adxnnlx=1356190103-59xMHIVx2EQ0xQw03GgAxw&) where despite all their rhetoric both parties are forced to accept cutting the size of government. IOW, the same free market economic forces that allowed man to escape the Malthusian Trap will allow us to escape the Government Trap.

KC
12-24-2012, 02:11 PM
Sometimes all you can to is stand athwart history, yelling Stop, as Buckley said. And maybe that's all we can do is slow it down.

Certainly it is not a change we can design and manage, for that would be to assume the same fatal conceit Keynes and his followers did.

I do see hope in the irony reported in Goodbye, Government, Under Either Fiscal Plan (http://www.nytimes.com/2012/12/19/business/say-goodbye-to-the-government-under-either-fiscal-plan.html?_r=4&adxnnl=1&adxnnlx=1356190103-59xMHIVx2EQ0xQw03GgAxw&) where despite all their rhetoric both parties are forced to accept cutting the size of government. IOW, the same free market economic forces that allowed man to escape the Malthusian Trap will allow us to escape the Government Trap.

As long as they do what is right, I guess that's a good reason for optimism.

Chris
12-24-2012, 02:25 PM
I think it's outside their control. Their desire, most in both parties, is to grown government, but they are forced to shrink it. It's sort of like government operates on a Laffer Curve, which is really just a normal and natural distribution. It grows to a point it becomes a burden unto itself.