I would advise to read the Review, but not the book; this stuff has the ability to confuse, at least me. Keynes was a distracting Voice in the Wilderness after WWI, and Some would claim that has not changed much with the years. I think his critique of the Versailles Treaty was his best work, and slipped a little thereafter. Greg Mankiw might place me in the detractor column for that comment, but he really should not do that. I think John Maynard Keynes did the best he could which the situation he faced, and current economists fail of that consideration in our own Time. Keynes had the guts to build an economic model based on the conditions of his Time, and despite its potential failings, was a guide to policymaking within his own era. Where is the economic genius of our own Time, who would present new theory without claim of precedent? Are We not somewhat cowardly in our insistence on maintaining traditional flow?
Alex Rosenberg gives Insight to his views on functional shape of Chicago Fresh Water v. Sea Water. I always enjoy when economists begin to assume the baggage of Poetry. Rosenberg does not invest in catch words, only in an intellectual argument which has substance, but is betrayed by too much logic. I know, and Most know, that Investors are not ordinary participants within an economy; and individuals who tend to be optimistic. There is potential Gain from Investment, potential Loss from divestment, and lack of desire in realization of Loss. All Conditions incite Investors to be irrational in the actual practice of their investment, yet Chicago still expects a rationality in what is basically Gambling–even if of higher security. The reluctance to actually accept losses will always introduce irrationality, and so much of the Chicago thesis is transposed.
One can do little with the human reactions within the economic spectrum. One can only wish that the prevalent ‘Herd Instinct’ will be moderate under most conditions. Such moderation limits the magnitude of both Booms and Busts, without perjuring recovery methods. It is the Panic attacks which are the real fear of the markets, because of the extreme level of damage incurred. It is only under such conditions that great fortunes are destroyed; fortunes utterly necessary to regenerate moderate recovery. The financial crisis was triggered by immoderate response to the bad leverage position of Investment Banks; government response was equally as immoderate, and now, We have the problem of separating Government and Banking. Do not ask me for Solutions; I might think of Some, and then We would really be in trouble! lgl