Wednesday, October 20, 2010

The New York Times on Keynes and Democrats

The New York Times reports that Democrats are at odds over the relevance of Keynes (HT Kate and waterzooi), despite overwhelming support among what the article calls "liberal economists" (I'm not sure why they think it's just liberal economists). This isn't especially surprising. First, the "Keynesian resurgence" is relatively new anyway. No one should be shocked that the dedication of some was fleeting. But we also have to remember that Keynesianism isn't really all that politically popular:

Politician: "I want to run even larger deficits than Obama has and I could even stand for some public employment programs, and I want to maintain those ::mummblemummble:: tax cuts"

Reporter: "Excuse me sir - I didn't catch that last part"

Politician: "I want to maintain those ::mummbleBushmummble:: tax cuts"

Reporter: "What?"

Politician: "The Bush tax cuts"

Ya - that's a winning electoral strategy. Voters just love budget deficits and George Bush. Think about this - how would the average voter react to that? Some people act like Keynesianism is tailor-made for politicians and winning elections. This is absurd. You know what wins elections?: "Balance the budget! Get Washington off my back! Muslims attacked us!". Come on - of course politicians are retreating from Keynesianism. News flash - this has been going on for two years and the politicians were never entirely on board in the first place. So it's an interesting trend to note, but it's not surprising at all from public choice theory perspective.


  1. Of course this is why it is easier to initiate Keynesianism in a non-democratic, closed society; you have far fewer people to object to its implementation.

    As for the tax cuts, as long as they are "middle class tax cuts," they are easy for a lot of people to swallow. So the Democrats can and do run on the "soak the rich" notion that so many liberal economists buy into.

  2. I would imagine it's easier to initiate most things in a non-democratic society. Isn't that the attraction for would-be-dictators?

  3. If in an open society you cannot initiate the Keynesian wet dream, what is the point of it exactly?

  4. Who said you can't initiate it in an open society?

    And even if you can't institute the ideal, a half measure is probably still better than no measure.

    And even if you can't do it at all, it doesn't change the economics of it.

    Do you think you could really initiate a libertarian "wet dream" in an open society? I seriously doubt it.

  5. Yes, I do. In twenty years the U.S. will be far more libertarian than it is anything else.

  6. Really!

    More libertarian than it is today? I could potentially buy that. Is that what you mean or do you really mean a libertarian plurality?

  7. I suppose it depends on what you mean by that too. I'm always on the centrist/libertarian border in those political quizzes... but I'm guessing that wouldn't satisfy you, and I certainly wouldn't call myself a libertarian.

  8. Yes, really. You're going to see a collapse of federal government entitlement commitments, which means greater choice in areas like retirement funding, etc. You're also going to see a shrinkage of the size of the U.S. military. There will be a decrease in the areas of personal life that the state feels obliged to regulate. This century will be very good for libertarians, particularly since we're the only ones with anything like a workable ideology or a set of appealing ideas.


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