Thursday, February 10, 2011

Principles of Pure (Uncorrupted) Keynesian Policy

I decided to arouse the ire of economists and business leadership today, basically because the economic student needs an alternate explanation of What is going Right, and What is going Wrong with the current economy, and some suggestions as to Why these effects are in force. I made this weighty decision, then decided of course to go off Topic. I leave to my Readers to wonder Why this be the Case, and its importance to the issues at hand. Here resides my Concept of genuine Keynesian policy, and Why almost All policymakers would disagree with me:

1) Pure Keynesian policy will never allow disruption of Consumer Demand. This seems simple in statement, but vastly complicated in actuality. Keynesian policy is in direct contradiction to Monetary policy on this Issue, thinking that screwing with the Interest rates suppresses the natural purchase pattern of the older generations, while artificially inflating the Pricing of alternate forms of Investment other than traditional Savings in Banks. The Elderly curtail their purchases by as much as 40%; Investment instrument markets are skewed, with elevated Profits and Losses occurring simultaneously with not real increase in hard capital investment; and Banks find themselves short of Cash and fearful of extending Credit in the normal outlets traditional to Banking.

2) Pure Keynesian policy should know better than to protect or promote business Profits at any juncture. Loss of business Profits remains the real driving force behind business management improvement and technological innovation. Protecting and supporting business Profits only means that continued poor management and production practice will still be with Us. It is also a Truism that Business will not invest to greater degree within their own sector, if current Consumer Demand for their Product is being met with sufficient Product. This leads Business leadership to turn to already inflated Investment instrument markets to produce Profits, and inciting an paper investment bubble; this bubble will burst to huge losses if hard capital investment does not match the funds coming into the paper markets.

3) Government fiscal policy is extremely important to pure Keynesianism. It is here that Keynesian policy splits off from business leadership. The later would desire increased heavily capitalized Government projects employing their specialized expertise and Profits ratios; able to pay for their highly-skilled labor. Pure Keynesian policy knows that What is needed consists of mass labor employment at Minimum Wages levels of a vast segment of the labor force. This means there will be continuous search for better Jobs, high increase in Consumer Demand per Dollar spent on Stimulus Hiring, and an upgrade in actual Job Skills for Those employed by teaching organizational and Production management skills. There are any numbers of potential mass labor endeavors to chose: I like military reserve training, but One could chose brush clearing in Fire areas, planting of Trees, Clean-up efforts ranging from suburban and urban clearing of garbage and trash to refurbishment to homes for the Elderly.

I could possibly pick out other elements which prove current policy is deficient in actual economic stimulus, but I have named the essential Three. They will need to be worked upon before We witness improvement in our economic fortunes. lgl

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