Keynes is dead. Long live Keynes!

quilandink1President Barak Hussein Obama, and his fellow travellers Nancy Pelosi and Harry Reid have adopted the tried and false methods of a long-dead British economist to save our country.  He notably quoted and aped Abraham Lincoln and John Fitzgerald Kennedy during his inauguration.  However, he is now more closely imitating Franklin Delano Roosevelt, Lyndon Baines Johnson, and James Earl Carter.  As we now know, this man has not one original idea in his Blackberry.  Therefore, we must find out which charlatans and ne’erdowells he will try to recreate.  While he wishes to evoke the image of JFK and gain the stature of The Great Emancipator, his aspirations most closely resemble those of FDR and LBJ.  Of course, this carries the tired old baggage of the oppressive economic theories of Keynes.

John Maynard Keynes, the English economist, dominated economic theory and governmental budget discussion in America during the mid 20th century.  Keynes was hailed as a genius, the single most important intellect of the era which followed the stock market crash of 1929 and the economic malaise of the next two decades.   JM Keynes, most notably in his magnum opus, “The General Theory of Employment, Interest and Money”, believed that spending, especially by consumers, was the only way out of an economic slowdown.  He supported government intervention into the market system as a way of stimulating economic growth.  The concepts of creating government programs to put people to work, and the policy of creating a larger pool of money in the system to promote liquidity were ideas pushed by Keynesians.

Franklin Delano Roosevelt followed a Keynesian game plan for most of his many years in the White House.  FDR famously created the CCC, the TVA, and less known, but relevant to our present administration, programs like Volunteers in Service to America (VISTA).  These programs cost millions and millions of dollars to create thousands of new GOVERNMENT positions.  The FDR administration was successful in increasing the scope and power of the federal government, but did nothing to regenerate the private sector.  In fact, unemployment in America remained above 15% until the onset of the Second World War. While a few useful projects were completed, most important being dams for hydroelectric power in the south, most were simple transfers of money from taxpayers to new government employees who created nothing, or more infamously, who built sidewalks to nowhere.  Spending by the government, as a percentage of the Gross Domestic Product (GDP), DOUBLED during the massive consolidation of governmental power under FDR.  But, the hope of these stimulus programs was never realized, with the exception of many more thousands sucking on the government teat.  Those new dependents were supported by additional drains on hard-working entrepreneurs and businessmen who should and could have brought America’s economy back.

As Roosevelt meddled with packing the Supreme Court and stomping on the Constitution and the ideals of limited government, the American people suffered, the American economy stumbled, and liberty waned. Only after World War II, with the return of millions of American men to the workforce coinciding with the recession of government spending on the war and massive domestic government programs did our economy revive.  The fiction that FDR is a saintly figure who single-handedly saved our country is a creation of the liberal nature of the media and the public school system.  Illustrative of the philosophy of Roosevelt and the failure of his Keynesian spells, is a quote from his own Treasury Secretary, Henry Morgenthau, in May 1939, seven years after FDR took office:
“We have tried spending money. We are spending more than we have ever spent before, and it does not work… I say after eight years of this administration, we have just as much unemployment as when we started — and an enormous debt to boot.”
Those monies are but a drop in the bucket compared to the pork packages recently passed by the House of Representatives, with the promise of more coming in future annual budgets.  Will our present executive officials be as open about failure two or three years from now, much less SEVEN YEARS from now?  On January 28th, the United States House of Representatives passed a bloated and misnamed “stimulus” package with a misleading price tag of $800,000,000,000.00 (800 billion dollars), which will actually cost America somewhere between one and two TRILLION dollars.  Even a bumbling sycophantic media has discovered the fact that only a very small percentage of this monster will be injected into the economy in the near future.  The rest of the bill entails massive governmental spending on all sorts of public projects over the next several years.  It is quite obvious that lawmakers supporting Obama have no understanding of free market processes, and it is equally clear that they are taking advantage of the uncertain economic future to lay the groundwork for the federal takeover of America’s means of production.  This is nothing less than the latest and greatest power grab by socialist activists.

Even though Keynes fell out of favor in Washington, and everywhere else, during the final decades of the last century, executives and legislators have continued to employ Keynesian methods (increased governmental activism to counter economic slowdowns) to accomplish limited short-term political goals.  Even Milton Friedman, the most famous advocate of monetarism and the Chicago School of Economics (and the most commonly quoted economist among GOP supporters) famously stated in 1965 (paraphrased by President Richard Nixon when he took America off the gold standard in 1971) that “we are all Keynesians now”.  This was a statement of fact, similar to Irving Kristol’s (the poster boy for neo-conservatism) statement that, “The welfare state is with us, for better or worse, and…conservatives should try to make it better rather than worse.”  Neither of these statements is congruent with conservatism or libertarianism of any sort.  They are simply capitulations to the predominance of socialist ideology in our country.
We have a debt of around $10,000,0000,000,000.00 (10 TRILLION DOLLARS).  That number will grow alarmingly fast during the Obama administration.  Encroachment by government into private affairs, both personal and financial, has been stamped into the Democratic Party’s roadmap to recovery.  While it may be possible to recover from the future damage of the growth of leviathan, and while it may be possible to throw off some of the new shackles which will be clasped around our liberty, we will find it very difficult to recover fully.  Socialism, especially in the guise of the Keynesian recipe for economic recovery, is very akin to an anaconda.  We were squeezed in the FDR years and recovered.  But we were never as free from government as we were before that time.  We were squeezed again during the Great Society of LBJ. We recovered, but were not even as free during the ensuing years as we were during the days of FDR.  Now, we are set, and have even requested, another constriction of liberty in the name of economic stimulus, possibly the greatest yet.  How much can the Republic take?  It is difficult to imagine that we strenuously fought off the ideas of a German socialist for decades, to emerge victorious, only to be laid low by the disturbingly more palatable ideas of a discredited English economist.