Même lui veut son bailout !
Je vous souhaite un joyeux noël et une bonne année. Moi, je prend des vacances jusqu’au 5 janvier.
On se revoit en 2009 !
"Keynesianism has been found fatally wanting in both theory and practice, so why is it back?"
Zombie Keynesianism, with its promise of 10,000-volt stimulus, continues to lurch around the political scene, while John Maynard Keynes’ acolytes struggle to gussy up his policy Frankenstein for another prime time appearance.
Chief among Lord Keynes’ public proponents are economist Joseph Stiglitz and his biographer, Robert (Lord) Skidelsky.
Prof. Stiglitz recently wrote in Vanity Fair of the importance of understanding the roots of the present crisis. “The battle for the past will determine the battle for the present,” he wrote, reflecting communications strategy from Nineteen Eighty-Four. “So it’s crucial to get the history straight.”
It is indeed crucial to understand the past, but rather than clarifying Keynesian history, both Messrs. Skidelsky and Stiglitz seem intent on shoving inconvenient truths down the memory hole, and engaging in rhetoric rather than objective analysis. There is an old economic joke: “Sure, it fails in practice but does it work in theory?” The approach of Messrs. Stiglitz and Skidelsky is to bury the evidence of practice, demonize straw-man opposition and not so much establish the theory as simply assert its moral credentials.
No comment has been more eagerly leapt upon by interventionists than Alan Greenspan’s mea culpa about his misplaced faith in markets. In a piece in last Sunday’s New York Times, Lord Skidelsky suggested that since the case for light regulation lies in the market “efficiency” that Mr. Greenspan found wanting, then the free-market capitalism jig is up.
In fact, the case for free markets since Adam Smith has not been that they are perfect, but that they represent an astonishing co-ordinating mechanism that government attempts to improve — beyond the protection of property, and the enforcement of contracts — at everybody’s peril.
If Mr. Skidelsky is interested in mea culpas, meanwhile, a more relevant one is that of former British prime minister James Callaghan, who said, in 1976, “We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour, that that option no longer exists; and that insofar as it ever did exist, it only worked by injecting bigger doses of inflation into the economy followed by higher levels of unemployment as the next step. That is the history of the past 20 years.”
Lord Keynes was concerned about a very real problem in the 1930s: that economies might be “stuck” at a low level of output and a high level of unemployment, which he saw as a failure of classical economic theory. His analysis was contained in his book, The General Theory of Employment, Interest and Money, which was published in 1936. Keynes claimed that such a phenomenon — when individuals were, in their irrational fear, allegedly socking away cash in their mattresses — required government expenditure to keep up “aggregate demand.” It didn’t matter where the government spent — be it roads, pyramids or even wars — such expenditure was needed to jolt the economy back to full employment.
Adam Smith had observed that “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.” Keynes’ version, as economist James Buchanan pointed out, turned this wisdom on its head: “What is folly in the conduct of a private family may be prudence in the conduct of the affairs of a great nation.”
Spend yourself rich!
But how could government inject anything into an economy that it did not take out, either currently via taxes, or by taking on the burden of debt? In fact Keynes said that government deficits should be matched by corresponding surpluses in good times, but Keynesianism inevitably proved a one-way pendulum, as Prof. Buchanan had warned. Meanwhile Friedrich Hayek, who was both Keynes’ friend and rival, had pointed out that there was an even greater danger in any policy system that implied that governments knew best; it was called The Road to Serfdom.
Significantly, both Hayek and Buchanan were stigmatized for their apostasy, not least because Keynesianism — with its stratospheric worldview and its promotion of “macroeconomics” — proved wildly popular with both politicians and policy wonks.
As Milton Friedman, wrote: “Here was one of the most famous and respected economists in the world informing governments that the way to full employment was paved with higher spending and lower taxes. What more attractive advice could politicians wish for?”
Keynes was at least vaguely aware of the potential dangers of his policies, but chose to believe that the politicians to whom he gave advice shared his own sense of noblesse oblige.
In a famous letter congratulating him upon the publication of The Road to Serfdom, Keynes wrote to Hayek: “Dangerous acts can be done safely in a community which thinks and feels rightly, which would be the way to hell if they were executed by those who think and feel wrongly.”
As Prof. Friedman mischievously pointed out, Keynes’ agreement with “virtually the whole” of The Road to Serfdom obviously did not extend to the chapter titled “Why the Worst Get on Top”!
Meanwhile Keynes’ theories had other purely economic flaws, a major one of which was pointed out by Robert Lucas. Prof. Lucas’s theory of “rational expectations” pointed out that the success of Keynesian stimulus depended essentially on fooling all of the people all of the time. In fact, businessmen would tailor their decisions to government policies, thus neutralizing them.
Keynesianism has thus been found fatally wanting in both theory and practice, so why is it back? One reason is sheer political desperation, or as Professor Lucas put it, “I guess everyone is a Keynesian in a foxhole.”
However, the support of Messrs Stiglitz, Skidelsky and other modern liberals, such as Paul Krugman, is also based on a fundamental distaste for free-market capitalism as the rule of greed and materialism (not to mention a system that deprives them of their rightful role as society’s guardians).
Prof. Stiglitz looks at the doughnut and sees only a hole: the economy in his eyes is everywhere plagued by “market failure.” Lord Skidelsky’s moralistic approach is on flagrant display in an article in the current Prospect magazine. He fulminates against materialism and “the corruption of money.” He denigrates “off-shoring.” He bemoans globalization and the “rape of nature.” Above all, he projects a world in which a race of omniscient Keynesian geniuses make markets “well-behaved” and render globalization “efficient and acceptable.”
Lord Skidelsky stresses with approval that Keynes was “a moralist as well as an economist. He believed that material wellbeing is a necessary condition of the good life, but that beyond a certain standard of comfort, its pursuit can produce corruption, both for the individual and for society.”
So a guardian class must decide, presumably, what an acceptable dividing line between “comfort” and “corruption” will be. Otherwise, as Keynes hysterically suggested, “We are capable of shutting off the sun and the stars because they do not pay a dividend.”
Such is the thinking behind the “new” Keynsianism. High moralism. Desperate politics. Terrible economics.
Pas sûr que c’est le changement que le monde attendait…
Un sondage publié cette semaine montre que 77% des Américains considèrent que les médias empirent la situation économique en faisant peur aux gens.
Mais les Américains semblent restés lucides. Malgré la campagne de peur des médias, un autre sondage a montré que 61% d’entre eux sont opposés au sauvetage de l’industrie automobile.
Discussion entre André Arthur et Pierre-Hugues Boisvenu de l’Association des familles de personnes assassinées ou disparues:
Comment ne pas ressentir une profonde colère quand Pierre-Hugues Boisvenu décrit les aberrations du système carcéral ?
Quelques chiffres assez intéressants sur le taux d'endettement aux États-Unis depuis 2002:
Pour le troisième trimestre de l'année 2008, la progression fu taux d'endettement aux États-Unis a été de -0,8%. Ce taux négatif signifie que les Américains, au lieu d'augmenter la taille de leur dette, ont plutôt remboursé cette dernière. C'est la première fois depuis 50 ans que ce phénomène est observable. Le taux d'épargne, qui était de 0,2% au début de l'année 2008, est passé à 1,1% au troisième trimestre.
Du côté des entreprises:
Le taux n'est pas négatif, mais il est en nette diminution depuis le début de l'année 2008.
Bref, le marché s'ajuste: la crise financière a fait réaliser aux gens et aux entreprises qu'ils vivaient au-dessus de leur moyen et que le temps était venu de se débarrasser de cette mauvaise habitude. Une réaction normale et pleine de gros bon sens.
Pendant ce temps, le gouvernement américain sombre dans la démence keynésienne:
Si les ménages et les entreprises américaines ont eu assez de bon sens pour se rendre compte que vivre à crédit, c'était peut-être une mauvaise chose, le gouvernement semble incapable de faire un constat aussi élémentaire. Pire encore, ce gaspillage d'argent keynésien vise à décourager l'épargne.
L’économiste Russ Roberts au sujet de l’héritage économique de Bush:
« As we prepare to partially nationalize the American automobile industry, it is a good time to remember that George Bush is not a free market ideologue and that he did not pursue free market policies. Please remember that in his last year in office he initiated and condoned measures that helped destroy the natural feedback loops that allow markets to recover from the inevitable mistakes that human beings make. And tell your children. I know. It seems obvious. But twenty and thirty years from now, there will be people writing about how George Bush’s free market ideology caused the mess we’re in. »
Quelques chiffres intéressants sur la récession aux États-Unis:
Depuis le début officiel de la récession aux États-Unis, 1,9 million d'emplois ont été perdus chez les hommes contre seulement 0,4 million chez les femmes. L'écart entre le taux de chômage des hommes et des femmes s'est accru pour atteindre 1,2%.
Citation de la semaine
"These guys should he wearing fedoras with those big, striped suits, you know? Like in gangster movies. You know, Joe Balogna could play one of these guys."
—- MSNBC's Chris Matthews on the more unsavory elements of Blaqo-gate.
Poids média de l'actualité américaine (8-14 décembre) selon le Pew Research Center:
Blago-gate Dominates the Week’s News
It takes an extraordinary story to burst into the news cycle in a week when the Senate rejected a lifeline to the American auto industry, companies from Sony to Bank of America announced stunning layoffs, and Barack Obama tapped his choice to tackle health care reform.
And with the sunrise arrest of Illinois Governor Rod Blagojevich on Dec. 9, that’s exactly what we had. It was a saga of cinematic dimensions—part Sopranos/part All the King’s Men. The governor of the fifth-biggest state was on tape allegedly and profanely talking about selling Barack Obama’s now empty Senate seat, and expressing a desire to use his office to peddle a lot of other things for personal gain as well.
“Blago-gate,” as it was instantly dubbed, filled more than a quarter of the newshole from Dec. 8-14, as measured by the News Coverage Index from the Pew Research Center’s Project for Excellence in Journalism. For all of 2008, it was the biggest weekly story not related to the election or economy. And it seemed to siphon media attention away from the week’s other big stories.
As a topic, coverage of the economy edged out Blagojevich when stories such as the auto industry, financial meltdown and holiday shopping are all combined. But last week’s economic coverage dropped noticeably from the week before. And coverage of the new Obama Administration, the next-biggest Dec. 8-14 storyline, plunged to less than half the previous week’s total. In a sign of its far-reaching tentacles, the media framed the Blagojevich bust as the Obama team’s first test of crisis management.
J’ignore si Michel Kelly-Gagnon est intéressé par la direction de l’ADQ, mais si tel est le cas, il a mon appui !
Voici M. Kelly-Gagnon (avec Martin Masse) débattant avec Amir Khadir et Gabriel Sainte-Marie au sujet de la gauche québécoise:
Voilà ce dont la droite a besoin au Québec: un politicien de conviction qui sera capable de s’adresser aux gens en faisant appel à leur raison plutôt qu’à leurs émotions.
Peux ceux qui on un compte facebook, vous pouvez vous inscrire au groupe d’appui à la candidature de Michel Kelly-Gagnon comme chef de l’ADQ.
La semaine dernière, les États-Unis ont manigancé un autre plan de sauvetage: 15 milliards pour l'industrie automobile.
Pendant ce temps, la Chine a annoncé qu'elle préférait plutôt relancer l'économie en coupant les impôts des corporations et des particuliers.
Lequel de ces pays est communiste ? Lequel de ces pays est capitaliste ? Qui aurait cru qu'un jour les politiques économiques de la Chine deviendraient un exemple à suivre pour les Américains…
De passage à Bagdad pour une conférence de presse, George Bush a été "attaqué" par un journaliste irakien qui lui a lancé ses souliers au visage. Richard Hétu et sa clique semblent avoir trouvé l'incident assez amusant.
Je me demande combien de journalistes ont pu lancer leurs chaussures au visage de Saddam Hussein et vivre assez longtemps pour raconter l'histoire.
Le geste de ce journaliste prouve une chose: la liberté en Irak est telle qu'on peut désormais lancer ses chaussures au visage d'un politicien sans risquer sa vie. Merci pour cette démonstration !