Tuesday, October 20, 2009

Keynes and Trade deficit

I've been bringing up the trade deficit as the main cause of the bad economy. It has taken money(preinterest/preinflation money) out of the supply and out of circulation .

Keynes said much about interest rates, but nothing on taxes during a time of deficits- or a "shortage of money"; which can't be adequately replaced by credit.


See Pg. 196-217.

Underneath the Old School English lies Keynes' stratgies, one involving a combined currency to fix the problem-which didn't fly over well with today's economists.

I'm bringing this up because too many Keynesian hypsters (who never read his writings) parrot the phrase too conveniently erroneously as if the Laffer strategy was the entire scope of Keynesian economics.

I like Keynes, I like his style. I have a problem with the way his methods are taught in univerities.

They teach Keynesians as an absolute way of thinking, not as the strategy that it is. The University professors teach only small parts of Keynesian as a major topic without mentioning that Keynes is an entire complex set of strategies built generally around Adam Smith's Model of the Invisible Hand.

This is the way I was taught, and it's probably cause for the masses in the business world to not question the media and their politicians on why a strategy is being used to "stimulate the economy".

Like mentioned before, Keynes himself gravely addressed the issue of trade deficit. Never did he say "tax the people" during this time of wealth depletion from the middle class as Bartlett may lead you to believe. CNN is not a trustworthy site for journalism unless you can calm your stomach during intense vertigo. The context contains way too much spin it's pointless for the articles to exist in the first place.

Keynes never said "create inflation and an unsecured credit market as the new currency- and ignore the trade deficit". The Obama Dream Team should take notes.

If for anything, not to treat us out here as if we were born yesterday. Americans are not "dumb". We're terribly misinformed.

Stick with fundamental education before you read the news. And never be intimidated or afraid to question your sources. FUD=fear uncertainty and doubt is a too common tactic to cause oppostion/competition to question the legitimacy of their statements.
It's only a tactic, the average person may prove to be smarter than they're made to feel about themselves.

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