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Forum Post: Keynesian Economics Goes Out of Style for Americans

Posted 2 years ago on March 7, 2012, 12:01 a.m. EST by Jflynn1964 (-206)
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Now we know, OWS is supporting and defending the wealthy people

From US News & World Report

By LAUREN FOX February 29, 2012 In 1970, former President Richard Nixon famously declared "We are all Keynesians now," citing the depression-era belief that a government-managed economy performs better than it's free-market counterpart. [Sorry Mitt Romney, Good Businessmen Rarely Make Good Presidents.]

Forty years later, a new poll calls his bluff.

The Rasmussen Report survey, which came out Wednesday, shows only 27 percent of Americans believe government management stimulates the economy. Half of Americans take the opposite view and say government intervention does more harm than good. Six percent say it has no impact and 17 percent polled said they were unsure. [Stock Market Predicts 90 Percent of Presidential Elections.]

In the era of auto bailouts, debt ceilings and Dodd-Frank reform, government intervention appears to be the Obama administration's solution of choice, opening a deep, partisan gap between those who support intervention and those who do not.

For example, Democrats are more likely than Republicans to favor government solutions to economic problems with 46 percent supporting them. Nearly 70 percent of Republicans and 60 percent of independents have the opposite view.

There was also a bitter divide between classes. Wealthy Americans polled said government management of the economy helps, while middle-class voters surveyed said government regulation damages the economy.

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8 Comments


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[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 2 years ago

"Keynes contended that a general glut would occur when aggregate demand for goods was insufficient, leading to an economic downturn resulting in losses of potential output due to unnecessarily high unemployment, which results from the defensive (or reactive) decisions of the producers. In such a situation, government policies could be used to increase aggregate demand, thus increasing economic activity and reducing unemployment and deflation. Most Keynesians advocate an activist stabilization policy to reduce the amplitude of the business cycle, which they rank among the most serious of economic problems. For example, when the unemployment rate is very high, a government can use a dose of expansionary monetary policy."


The stimulus was handed to the banks, how is that going to spur demand per the Keynesian model? The Keynesian model states that the purpose of any such stimulus would go to creating demand. The money was not given in a way that would create demand, therefore none was created. We have yet to see Keynesian economics.

[-] 1 points by nikko (62) 2 years ago

The money given to the banks was not "stimulus" in any form as the term was meant by Keynes, or even any modern definition of Economic stimulus. I read an article by a conservative group (I think the Heritage Foundation) that considered the bank bailout part of the stimulus. They used that thinking to make the Obama stimulus net gains look much worse. Actually doing that made them look desperate and silly more than anything.

[-] 2 points by GirlFriday (17435) 2 years ago

You mean that after several years of vilifying and distorting Keynes a poll demonstrates the effects of propaganda.

Come on.

[-] 2 points by francismjenkins (3713) 2 years ago

Have you ever read Keynes?

[-] 1 points by alexrai (851) 2 years ago

That's interesting, but I think the answer is both camps are wrong. Intelligent government action can help a lot, as well as intelligent government restraint.

Problem is that there is neither going on because of the current level of idiocy plaguing the system.

Or maybe its intentional, but its certainly not directed at long term sustainability, its directed at extreme short term gains for a small percentage of already wealthy individuals... while simultaneously placating the deteriorating middle class with social programs that can't be paid for.

[-] 1 points by nikko (62) 2 years ago

Poll after poll shows that Americans do not understand Economic theory. Down with big government and don't touch my Medicare. How many republicans - including politicians - have been attacking Ben Bernanke? They don't realize that he is a died in the wool republican and is in fact acting on the advice the republican God Milton Friedman. If you look at all the opinions on what people think of Economic theory, what you will really find is that people are less informed than anytime in the last 150 years . In the late 1800's, even the farmers (who were at the time put down for their supposed lack of knowledge) understood very well how the banking cartel, the railroad cartel, and oppressive gold standard destroyed their livelihoods and created a sharply divided economic society. Using public opinion to determine what strategy will solve a problem will not work if public opinion is uninformed.

[-] 1 points by notaneoliberal (2269) 2 years ago

The problem is, reality is not determined by opinion polls. If Keynesian principals had been followed, we would not have a massive trade deficit. The Keynesian term for that is "leakage". Stimulus is ineffective with free trade policies in place. Try doing a survey of people who actually have a basic understanding of Keynes.

[-] 0 points by BlackSun (275) from Agua León, BC 2 years ago

Anyone here know that Keynes was a frequent correspondent and advisor to Sir Oswald Mosely?