Vulgar Keynesianism

There's an excellent article at Mises.org called, "Six Fundamental Errors of the Current Orthodoxy." The author, Robert Higgs dissects what he calls the "vulgar Keynesianism" that dominates current economic analysis. Here's a couple of excerpts.

Most of the people who purport to possess expertise about the economy rely on a common set of presuppositions and modes of thinking. I call this pseudointellectual mishmash "vulgar Keynesianism." It's the same claptrap that has passed for economic wisdom in this country for more than 50 years and seems to have originated in the first edition of Paul Samuelson's Economics (1948), the best-selling economics textbook of all time and the one from which a plurality of several generations of college students acquired whatever they knew about economic analysis. Long ago, this view seeped into educated discourse, the news media, and politics, and established itself as an orthodoxy.

AND

people who think along such lines are currently working to continue a policy that contributed greatly to producing the unsustainable boom of 2002–2006, namely, subsidized lending to would-be homeowners who cannot meet normal commercial qualifications for receiving such loans. It does not occur to the vulgar Keynesians that too many resources have been directed into house and condo construction and that lending to homeowners who cannot afford to purchase homes unless they are subsidized to do so signals an uneconomic use of resources at the expense of the taxpayers who directly or indirectly finance these subsidies.

The whole thing is well-worth reading.

Demonizing the Rich

The pseudo-Marxist demonization of the rich has long been a staple of Democratic Party political tactics, as we've seen in the latest wrangling over extending the Bush tax cuts. Even Republicans engage in it from time to time. Why? Because it resonates with many people. Almost everyone has at least one stereotypical rich person they despise, whether it be someone who makes millions and is famous for being famous, an incompetent CEO who runs his company into the ground and walks away with a golden parachute, an overpaid under-performing athlete, a greedy corrupt politician, or whoever. The list goes on. Envy is a natural human emotion. People tend to be jealous of those who have far more, especially if they feel that the wealth is somehow undeserved. But the latest round has gone even further than usual, with Democrats defining anyone making over $250,000 a year as wealthy, and the repeated use of the term "working Americans" for those who make less -- as if they are the only ones working hard.

In reality, most people making more than $250,000 a year got that way through a combination of hard work and smarts. Most of them work harder than the poor -- that's why they aren't poor. And if they don't have to work hard now, it's because they spent years working and saving, and now have investments that alleviate the need to work. I've seen this from personal experience. I've dealt with small business owners who also work a full-time job, plus have several rental properties. They make 250k+ but they work all the time, shuttling between business interests. Owner-operators of small businesses work like slaves, especially if they actually want to make any money. I've personally worked many low-end jobs, and from what I've observed, much of the so-called working class doesn't work nearly as hard. The idea that the lower classes are hard-working and the wealthy are not is mostly backwards. It's painful for people to hear and admit that they are where they are because of their own failings and poor decisions, and that the wealthy are rich because they were smarter. It's much easier to demonize them. It's something to think about the next time some politician refers to "working Americans" and implies that only people making less than a certain figure qualify.

The Pope: Bad Ideas from Both Sides

The Vatican just released a document containing papal commentary on the world economy. Unlike what you might expect from someone who is usually seen as a hardline conservative, the Pope's positions are nothing more than simplistic, utopian, leftist tripe.

Benedict sketches out a new vision of a world economy radically different from the current model and one where access to food and water is a universal right, wealthy nations share their wealth with poorer ones, and where profit is not the ultimate goal of commerce. He advocated the creation of a "world political authority" to manage the global economy.

The rest of his comments that are quoted in the article are equally laughable nonsense.

For me Pope Benedict XVI combines the worst of right & left. He's an extremist social conservative on issues such as abortion, contraception & gay marriage, while at the same time being an economic illiterate who embraces vague utopian socialist ideals.

Economic Quiz

Here's another quiz, this one a fairly detailed economic one at the Ludwig Von Mises Institute, called, "Are You an Austrian?" Most of the answers fall into one of four categories: Austrian school, Chicago school, Keynesian/Neoclassical, and Socialist. My score: 74/100. The result measures how close you are to the Austrian school.

The Irrational Left & the New Deal

I like to browse thru some left-wing sites just to keep up on what's going on with the other side.  Today I was over at Open Left and came across a post entitled, "New Deal Denialism--Conservative Liars On The Rampage." This post is a clear example of how some on the left are so utterly clueless & irrational, that is impossible to even talk with them. The author starts out with the assertion that:

conservative economics collapses disastrously under the weight of its many, many lies

He's not trying to be funny, he actually believes what he's writing.  What "conservative economics" is he talking about?  Who knows.  He goes on to argue that any deviation from the Keynesian view of the New Deal and its effects following the Great Depression is "New Deal Denialism." Anyone who disagrees with his canon truth is not just wrong, they are lying.   The author is apparently oblivious to the fact that almost every aspect of the Great Depression & the economic history that followed it is highly debated by historians and economists.  He puts up a chart illustrating that he doesn't understand that correlation does not imply causation, and again dismisses everyone who disagrees with his views as a bunch of liars.  Again, they don't just have a different interpretation -- they are lying.

This attitude is typical of a certain breed of leftists, and of fanatics of any stripe.  They know the TRUTH, and anyone who disagrees is not just wrong but acting out of evil motives.  How could anyone possibly disagree with the TRUTH?