MCViewPoint

Gary North  recently explains the difference between Keynesian and Austrian economics in terms simple enough even for me. He then asks the question why we continue down the Keynesian road to oblivion.

The world economic situation is one giant example of un-leashed Keynes. Government intervention in the marketplace, pumping fiat money into the system and generally enlarging that monolith that is government. The system doesn’t work but government’s typical solution is more of the same. The emphasis on MORE. Why indeed do we continue down this dark road?

The first reason is fairly obvious. Big government has to have reason to exist. That purpose is to make life better for us by keeping total control over every aspect of our lives. We can’t criticize the government otherwise we are unpatriotic and racist. Radical extremists can be identified by their political party and the Bob Barr bumper stickers on their cars. We can’t question petty bureaucrats, even when our Constitutional rights are being crushed, without being beaten and arrested. The police are becoming the enemy. Our schools can’t get federal money unless there is unquestioning obedience to what that (failure of an) education department demands. The same federal money that was OUR MONEY TO BEGIN WITH until it was taxed (stolen) from us. The market can’t be free but must be controlled. Keynesian economics fits right in, it is “progressive”, it is all about control.

The second reason is much more subtle but my readings have shed some light. Austrian economics came to be around the beginning of the 20^th century. Its premise in a nutshell is government interference in the marketplace upsets its natural balance, causing large boom and bust cycles. Sound familiar? It was quickly overshadowed by Maynard Keynes in the Hoover and Roosevelt eras and put on the shelf. Keynes has been held as gospel by economics professors for decades. Doctoral thesis and professional careers have been based on his theories. It is difficult to repudiate a system on which your reputation and life’s work is based. How disheartening is it when everything you were taught, been teaching and worshipped as gospel is crashing down around you? The Geitners and Bernankes of this world understand, I think. They have to, it is too obvious. They must not have the intestinal fortitude to stand up and buck the system. The banksters have too much to lose by not keeping the status quo. They are so afraid they will let the country collapse before doing the right thing.

The solution is to get someone in the oval office who has demonstrated the understanding and intestinal fortitude to do the right thing. That man is Ron Paul.