Keynesian strategies brought us out of economic troubles Six Times!
To the editor,
The first thing that struck me in Marc Abear's "Loss of freedom is implicit with carrying too much debt" was his statement "in the long run, the market is absolutely rational". To me that is like saying "in the long run humans are absolutely rational. Neither are guaranteed. This belief is an article of faith in the religion of so-called free market. There is no such thing as a completely free market that is rational because of human nature. Keynes criticized the Hayek/Mises economic model because it ignored the elephant in the room he called "Animal Spirits". IT IS US! Because of human irrationality, manic speculation, mood swings, emotional instabilities, and zealous avarice, there can never be a free market without regulations of the "animal spirits". Just as we humans need rules and regulations in a free society, so does the market which we operate with our wills. Its never "free".
Free market solutions have never brought us out of deep recessions or depressions in a timely fashion. In the last century, the chosen method has been the Keynesian method, whether it be conservative or liberal versions of such. Furthermore, economic turmoil has usually been caused by these "animal spirits". Industrial leaders, moneychangers and politicians sequester the nation's wealth through corporate political methods. This is how the gulf between the rich and the poor increases. The most insidious is the corruption resulting from corporate buyouts of politicians. This truly destructive alliance creates laws and the lack of them whereby there is a massive redistribution of wealth upward to a corporate monarchy.
In the last 30 years, wages for working class families have been almost flat. while the income of the top 1-percent has grown almost 300-percent. Back in the 1970s a CEO made about 70 times as much as his workers. Now he makes several hundred times as much. If one looks at a typical chart of the last 30-50 years you will see middle class wages are fairly stagnant but the line designating top earner's pay looks like a steep mountain climb! If the trickled-down supply sider model worked you would see in charts a corresponding rise in the wealth of the middle class. Its absent. The reason why the wealth of the nation is being heavily redistributed to the very top is that they own the politicians who make the laws. Chart after chart provides powerful evidence that supply-side corporatism is a road to serfdom; a world where we all work for lower wages. The richest job creators are setting the agenda of their servants in Congress and you are paying for it in every one of your paychecks.
Let me ask a simple question. Have you become a slacker? Do you produce less and less each year? Of course not. And have the top earner's work ethics and productivity gone into cosmic overdrive? Of course not. Its the corporatist sleazery that has exploded. Nothing has changed in how we all work. The reason why the data show such a discrepancy in income rise that refutes the trickle down model is that politicians are in the pay of powerful lobbyists and their corporations. This is not a free market; its a rigged market fashioned by corporatists who consider themselves America's Monarchy. We are all Walmart employees to the Koch Brothers! When income is adjusted for the cost of living, some of you are making LESS than you made 20 years ago. Not so for the folks who have bought the politicians and set their agendas. While the job-creator's wealth has exploded, they seem to have forgotten to create jobs.
Contrary to Mr Abear's claim that Keynes was constricted, the years 1945-1975 were called "The Age of Keynes". Keynesian strategies brought us out of the economic troubles of 1945, 1948-1949, 1952-1953, 1958, and the early 1960s. The recession of 1990-1992 is another example of successful Keynesian applications. Demand-side tax cuts, benefit extensions and jobs programs worked in every case just they did in the mid-1930s. Cuts never help in hard times which leads me to this: Mr Abear wants us to employ failed strategies; he not once brings up raising revenues to lower the debt when it is the most practical method when joined with prudent cuts. As long as GOP prohibits raising revenues, rebuilding America, and other jobs programs, we will move out of these hard times at a snail's pace — which was their plan all along. Ending the Bush tax cuts for top earners would pump a minimum of ten trillion dollars into the economy in a decade. They were supposed to expire so let 'em!
"BUT NO!" say the politicians, "we must babysit and protect the rich at all costs because they own us! They are the job creators!" I say then, where are the jobs?
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