You can’t “spend” your way or “borrow” your way out of public debt crises, but you cannot cut or save your way out of them, either. You have to INVEST your way out of them. That’s how real capitalism is supposed to work. If you can’t borrow your way to prosperity, how did most of the now-thriving businesses in the world first get started?
Austrian/libertarian/laissez-faire/Tea-Party economics is wrong. Ron Paul is wrong. But the Koch brothers hope you buy the deregulation, government is baad (ok?), every-man-for-himslef part of the story.
What progressives want to do is invest in new industries and enterprises that will create millions of good jobs and get revenue flowing into households first and then into the public treasury. The old, vested-interest money doesn’t want competition from green energy, local organic food, credit unions, housing coops, or any of that stuff, and that’s why they bankroll the libertarian/TP laissez-fairyland movements.
I think, I hope, that many in those movements just haven’t thought it all the way through. Some TP’ers only seem to think in terms of bumper-sticker slogans and sound-bite sized ideas. Others are extremely smart but may have arrested personality development (i.e. they are sub-clinical sociopaths). A lot of young people seem to fall into that category. Self-absorbed and with chips on their shoulders to start with, they want nothing from the busy-bossy, self-absorbed establishment. Some have conflicts between their financial interests and the better angels of their nature. Some are just decent, ordinary people who have been sold a huge load of crap. They are mad, but may not know who they should really be maddest at.
On the other hand, it doesn’t take a rocket scientist to see that we went from a budget surplus at the end of the Clinton administration to where we are now entirely under GOP leadership. . .
Note: If you hold some of the Laissez-Fairyland beliefs but don’t think you fit any of those categories above, please let me know. I am open to finding common ground.
Related PRA 2010 posts:
At Other Blogs:
A great web site with the following topics and much more:
- A general introduction to discussion with libertarians, with an extensive discussion of arguments commonly used by libertarian evangelists. This is the original FAQ, little changed from when it originated in 1994.
- What Is Libertarianism?
- Twenty views of the big picture of libertarianism.
- Notorious Failures of Libertarianism
- Claims widely adopted by libertarians that are spectacularly wrong.
October 9, 2011, 3:14 pm
A number of readers, both at this blog and other places, have been asking for an explanation of what IS-LM is all about. Fair enough – this blogosphere conversation has been an exchange among insiders, and probably a bit baffling to normal human beings (which is why I have been labeling my posts “wonkish”).
[Update: IS-LM stands for investment-savings, liquidity-money — which will make a lot of sense if you keep reading here]
The following web site has some examples of how the super-rich pay for phoney academic opinions and propaganda to support their fraudulent financial schemes. (Entire universities are becoming little more than hired PR firms.) ~PR
There is a huge demand for rebuttals to Keynesian arguments about how to fix the economy. Anti-government right-wingers and libertarians oppose Keynesian interventions, and they have vast wads of money to throw at such issues.
Now, it is well known that no economics model is perfect, and it is easy to assemble a list of problems and a list of people describing those problems. But the fallacy is to use this list to denounce an imperfect model in favor of worse models or none. Voltaire wrote “the perfect is the enemy of the good”, meaning that we should not discard effective solutions for pie-in-the-sky perfectionism.
It is interesting to note Cowan’s typical strategy, which like most public relations strategies is not aimed at “proof” but at convincing onlookers with incessant repetition of ideas such as “problems with IS-LM”. Cowan throws a bombshell, and then echos supporters without answering any questions about his own position at any point. A ploy to attempt to retain academic credibility in the midst of vigorous dog-whistling. He wishes to use his academic authority without being responsible to the academic community.
It looks to me as if Cowen has won. He has achieved his goal of repeating his memes numerous times and showing that there are other academic supporters of his criticisms. Basically, this is a variant of the tarbaby strategy from Uncle Remus. Trick your opponent into a fight with a tarbaby. The opponent may get in all the good licks and totally destroy the tarbaby, but afterwards you are exhausted, helpless, coated with goo, but the rabbit that set up the tarbaby is untouched and laughing.
(this web page has many links for the technically inclined)