Both of the two errors of pessimism which make so much noise in the world will be proved wrong in our time [they were]--the pessimism of the revolutionaries [Marxists--not many of these left today] who think that things are so bad that nothing can save us but violent change, and the pessimism of our reactionaries [Republicans--some of these are still around, I understand] who consider the balance of our economic and social life so precarious that we must risk no experiments. [emphases and addenda mine]
How's that for a jolly-good bit of a time warp! His "experiments" are of course no longer experimental. They were proved in the laboratory of the Great Depression. In a nutshell (for more go to #94-5), Keynesian Economics is Government Spending--pumping money into the economy when it's down. Recovery took longer in the 1930's because FDR was contending with a hardcore free-market Weltanschauung where economic safety-nets like unemployment benefits, Social Security, FDIC, etc. were still unthinkable. We have those things now, and the severity of our Crash is thereby lessened. Somehow the "reactionaries" in the now tiny third-tier party (numerically behind Indies and Democrats) called Republicans are willfully blind to the fact that many aspects of the American economy have been "socialized" for many, many years. And, c'mon, they'll never acknowledge the Corporate Welfare State, as I call it: government contracts (usually inflated--think Halliburton), tax breaks, incentives, loopholes, and other stuff I'm sure you can think of. And think about this while your at it: has the Republican party since Nixon stood for anything else but the politics of War and Greed?
Well, I'm a Libertarian (thus Independent, thus in the largest "party"), and the Obama-Keynesian Solution compromises those principles NOT in the slightest. First, let's be practical: Keynes WORKS in extremis; forget abstract dogma. Second, all of this stimulus money is just that: an investment of taxpayer contributions that will bring returns when the economy is finally "over-stimulated," and we can put the child to bed. Most of this money is in the form of loans, anyway, and what we have literally bought, like GM stock, has buy-back options for later on. And much of the money will go to paying wages for honest work in fixing up our infrastructure, and other such public projects. This too, along with the rest, would be TEMPORARY, let's not forget. Obama, to his credit, has resisted outright nationalization. Can wingnut GOP'ers seriously compare what's going on to Mussolini's Italy or Stalinist Russia? They have.
I want Free Enterprise Capitalism back as soon as possible--but fiercely regulated, even more so, in other words, than before the periods of Republican de-regulation madness. Look, even Alan "Chicago-school" Greenspan had to confess, after the damage was done, that a completely free market in fiduciary areas like mortgages, loans, investments, insurance, and so on, finally just didn't work. Problems? Hello: Greed and Fraud. But as I pointed out in those earlier posts, I was led into the Dismal Science early on by Adam Smith's "Invisible Hand," which was slapped rather hard only later in college by J.M. Keynes and the activist London School. I'm convinced both can work. We're just in a necessarily Keynesian cycle right now. And once we're back closer to the laissez faire ideal, there's nothing wrong with watchdog regulation, either--not even from a Libertarian point of view. We pay the government to protect us from Force and Fraud. And, fueled by greed, Fraud was what our financial institutions were guilty of.
Finally, I find Keynes's last words portentous. He challenges those "who consider the balance of our economic and social life so precarious that we may risk no experiments." The UK at the time had the great asset of stable government, second only to the USA, then as now. (Poor Iran is rioting in the streets over an election as I type.) Stable Government + Lots of People. Keynes-Schmeynes--THAT'S the real bedrock formula for recovery. Big China's gonna make it through just fine. In fact, we owe them some money. We've got 300 million (generally) law-abiding and peace-loving Americans who ARE the economy. It's self-generating. We gotta buy groceries ... sleep with a roof over our heads ... walk on paved sidewalks ... play on the Internet ... you get the picture. People will be working, and people will pay them for it, howsomever. Recovery is inevitable. How's that for some optimism.