A dastardly unkind Sprite asked several vitriolic Questions about my poetic elegance of yesterday’s Post. I will give several Examples of errant Wrong:
1) How can Keynesian policy avoid excessive Government Spending when the real levels of natural Consumer Spending cannot be found? Here he asking How such can be determined, when Hundreds of good economists find depressing poor Results at measurements over the general field. I told the Dolt that One does not need to discover the natural level of Consumer Spending; simply utilize the principles of Minima and Maxima. The Grasshopper would not learn, and asked How such could be utilized. I replied that all Government Spending should be centered around payment of Minimum Wage for Government projects, employing as much unemployed labor as possible. The poor unlearned Soul thought for a moment, then asked How any Projects could be completed using Minimum Wage labor, when modern practices required specialized labor to operate mechanized construction and production. The Claim was that no one would work Minimum Wage labor when highly technological advances had been made. I responded as best I could, saying that the Army Engineers (note I did not say Corps of Engineers) could operate the complicated machinery, as they were already being paid by the Government, and did not have much else to do anyway! My Critic sought to expand upon his diatribe, but I cut him off; some threats of Hell and Damnation!
2) A second imprecise Reader of my lofty words essayed as How One could determine a failure in the economic signal system which they questioned that the Austrians even advocated as infallible. I easily broke such Protest, saying that any higher proportion going to Base Resources and Mining than normal for a certain level of Production fulfilled by Consumer Demand was distortion in the signaling system of the economy. Austrians estimate that there is an automatic leveler in the Interest rates charged, and this does do it, but only after there is much Unemployment across the entire reach of the economy. Someone asked Why there would be such a lag in the signaling system. I replied that Interest rates are not actually set by markets. They are determined by corporate schedules designed to attain the greatest Return for their institution–in this case Lenders. I grew expansive at this point, and stated that certain economic studies produced sometime, somewhere (my imagination or in the 1970s) that found that Corporate Pricing was 8% stickier than were Wages through the Periods studied.
Further Questions were asked, but they became so complex that I would wait until later to find a relevant Answer defending my position; myself confident in my eternal rectitude. I sent them all packing, and swung open my medicine cabinet door. lgl
(only Some of Us consider that this happend in reality)