One needs a diatribe occasionally, lest one gets complacent in their attitude; in economics, this means getting shelved into a School of Thought. This Post takes on ‘vulgar Keynesianism’. Robert Higgs questions the value of Keynesian Thought, which depends upon particularly artificial aggregate values and definitions. Higgs favors von Mises and Hayek, as I do; I simply disdain Those who propound the ideas of these men–an observable use of a Cleaver instead of a sharpened Carving knife. Keynesians, on the other hand, utilize an artificial aggregation, ignoring both Time Sensitivity and Speculate reactions. Mal-investment is sort of like having Chicken for Evening meal, after having butchered a Hog that afternoon (there are always certain Parts of every animal which must be eaten ‘Fresh’ to maximize genuine Taste). Von Mises and Hayek fail in that they ignore their own set of variables (Money velocity constraints, the need for expansion of funds under these constraints, and the huge Cost of Information gathering at the decentralized market level–a bell-shaped Curve where as Many are going to lose as Gain without actual increase of economic performance). I will not even enter into criticism of Monetarists beyond saying they are the Number One cause of Inflation. Read, Study, and reach your own Conclusions, though I sometimes believe that Economics has not advanced in real terms since Adam Smith.
Steve Horwitz is an alright guy, though his criticism of Brad Delong may be a bit much. Brad endures an excessive amount of Commentary on his blog, and he obviously has to truncate these Comments simply to express his own Opinion–it is his blog you know. I post almost all my Commentary–except for the blatant Advertising–simply because my Readership does not bother to blog; they either have never heard of me, or enjoy my style of life. Brad suffers from the unbearable pressures of being an eminent Economist of a prestigious school, and battles the Time constraints which afflict Us all. I think it may be a bit much to declare Brad academically dishonest.
I listened to Dr. Stiglitz on CNBC the other day, and now find him in print (seriously, The Guatemala Times?–Mark Thoma has to get out more!). Joe says that the Stimulus Package is not big enough, and One-Third of it goes to Tax Cuts. I think this is an egregious Statement even for a Keynesian. Debt Repayment can only be made with the current Plan with the utilization of high Inflation, and expansion of the Stimulus could place real pressure on the Dollar. We need a simplified Plan, which translates into real Work projects; not inane Proposals which will only save the Dollar investments of a very limited percentage of Americans. Should WE drive 300 million Americans to the Poorhouse, simply to save 30 million Americans about half of their net Wealth? I don’t think so, but I lack the Voice to shout Others down. lgl