Monday, October 31, 2011
John Maynard Keynes speaks from beyond the grave
Through the good offices of Dr Krugman, he explains what are weaponized Keynesians and why they make Republicans comfortable spending money.
But why would anyone prefer spending on destruction to spending on construction, prefer building weapons to building bridges?And killing the confidence fairy is worse than killing Tinker Bell. So Republicans are very happy to waste money by the trainload so long as it has no useful purpose and doesn't damage their business fairies. Got it?
John Maynard Keynes himself offered a partial answer 75 years ago, when he noted a curious “preference for wholly ‘wasteful’ forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles.” Indeed. Spend money on some useful goal, like the promotion of new energy sources, and people start screaming, “Solyndra! Waste!” Spend money on a weapons system we don’t need, and those voices are silent, because nobody expects F-22s to be a good business proposition...
But there are also darker motives behind weaponized Keynesianism.
For one thing, to admit that public spending on useful projects can create jobs is to admit that such spending can in fact do good, that sometimes government is the solution, not the problem. Fear that voters might reach the same conclusion is, I’d argue, the main reason the right has always seen Keynesian economics as a leftist doctrine, when it’s actually nothing of the sort. However, spending on useless or, even better, destructive projects doesn’t present conservatives with the same problem.
Beyond that, there’s a point made long ago by the Polish economist Michael Kalecki: to admit that the government can create jobs is to reduce the perceived importance of business confidence.
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