Good book?

[Caruthers]

http://en.wikipedia.org/wiki/The_Econom ... _the_Peace" onclick="window.open(this.href);return false;


Keynes outlined the causes of high inflation and economic stagnation in post-WWI Europe in The Economic Consequences of the Peace.

"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some... Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

Keynes explicitly pointed out the relationship between governments printing money and inflation.

"The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance."

Keynes also pointed out how government price controls discourage production.

"The presumption of a spurious value for the currency, by the force of law expressed in the regulation of prices, contains in itself, however, the seeds of final economic decay, and soon dries up the sources of ultimate supply. If a man is compelled to exchange the fruits of his labors for paper which, as experience soon teaches him, he cannot use to purchase what he requires at a price comparable to that which he has received for his own products, he will keep his produce for himself, dispose of it to his friends and neighbors as a favor, or relax his efforts in producing it. A system of compelling the exchange of commodities at what is not their real relative value not only relaxes production, but leads finally to the waste and inefficiency of barter."

Keynes detailed the relationship between German government deficits and inflation.

"In Germany the total expenditure of the Empire, the Federal States, and the Communes in 1919-20 is estimated at 25 milliards of marks, of which not above 10 milliards are covered by previously existing taxation. This is without allowing anything for the payment of the indemnity. In Russia, Poland, Hungary, or Austria such a thing as a budget cannot be seriously considered to exist at all."

"Thus the menace of inflationism described above is not merely a product of the war, of which peace begins the cure. It is a continuing phenomenon of which the end is not yet in sight."

Keynes ended with this ominous warning.

"But who can say how much is endurable, or in what direction men will seek at last to escape from their misfortunes?"

The economic mess in Germany laid the foundation for the rise of Hitler.

[rgrokelley]

Most western governments went for Keynes theories, and it turned out to be pretty fucked up. I think Hayek summed it up when he said that Keynesian economic policies were a collectivist approach, and that no matter their presumptively utilitarian intentions, it requires centralized planning, which led to totalitarian abuses.

I prefer straight up capitalism. Helped make us the world's economic super power (though recent socialism is degrading that)

[Caruthers]

Man do I agree. Things were great until we.....as a nation, let a private bank: print and own their own money........we just pay for it by taxing our wages; the money that does not belong to us anyway........its a PRIVATE bank and they print money when they want some thing...........for good or ill, they are the ones (by congress and senate OK) that is killing their own dollar..........just like the "great depression"..........money goes tits up..........prices will fall, they gobble up more: land and businesses/industry and then let the economy "contract" and sell it back - at profit again. The whole time collecting their money back with the force of the tax code...........aint that some shit?

[PocketKings]

I don't agree with Keynesian economics at all.

[Caruthers]

I also agree, But it shows how stupid the "Utopian" idea is........but it could and did predict that a free market would take charge if left alone.

[DrD]

Keynesian economic theory holds true only in the extreme short run. Those who use and abuse it, tend to have a short term focus and a willingness to sacrifice long term economic health.

I think the interesting question becomes *why* such decisions are made, and what the true intention is. Perhaps the country is being sent to the edge of the cliff on purpose. Perhaps the long term consequences are known and accepted. Perhaps the goal is different than what we think.

I agree with the posts on this thread... the striking similarities of current events to past events in history (e.g. Germany) are not soothing.

[Reiver]

...and the belief that non-regulated corporations will self-regulate, and work towards the Common good - is a belief; akin to Santa Claus, Tooth Fairy (insert other fairy of choice, where is between the two of ewe), Great Pumpkin, Easter Bunny (and/or Easter itself), ad inifinitum, ad absurdum...

[Caruthers]

...and the belief that non-regulated corporations will self-regulate, and work towards the Common good - is a belief; akin to Santa Claus, Tooth Fairy (insert other fairy of choice, where is between the two of ewe), Great Pumpkin, Easter Bunny (and/or Easter itself), ad inifinitum, ad absurdum...

I believe the victor gets to write the rules..........and the history. It would make a big differece on who writes the "regulations" on corporations...........if they write thier own? bad, if a progressive writes them? they will move overseas, if a moderate writes them? eh,,,,,,,,, ect

[Reiver]

Nation has existed in a "theoretical" aposition between Hamiltonian & Jeffersonian belief's, between citizen & capital. Giggle is that all are post facto constructs, intended to color the world with whatever Crayon you may have in your hand at present.

Would feel better if "Anyone" knew what was going on, BUT having spent most of my life working for the Guv'mnt, know such is not the case. All react to whatever is relevant to them AT THAT MOMENT. Grand-kids can take care of themselves...sorry KiKi, sorry Lisi.

[DrD]

Would feel better if "Anyone" knew what was going on, BUT having spent most of my life working for the Guv'mnt, know such is not the case. All react to whatever is relevant to them AT THAT MOMENT. Grand-kids can take care of themselves...sorry KiKi, sorry Lisi.

Maybe... maybe they don't see where they are taking us.