It’s my birthday, and I thought it appropriate to use the occasion for an ode to my dad, the economist. And particularly so given that dad was old-school, flipping terms from a bygone era, terms like macro- and micro-economics. Terms like Keynes, and that great man’s theory of money, theory of interest and theory of employment.
For it was just yesterday that I watched our president-elect stand at the podium and outline to the nation his vision of what it would take to pull us out of this deepening malaise. And what he said I hadn’t heard said since my dad passed on, nearly three decades ago.
What the president-elect said was: Keynesianism. The simple notion that we humans are not tragically tied to an economic fate beyond our control. A notion that had somehow been discredited and forgotten by the emergent ideology of laissez-faire -- a bankrupt right-wing ideology that has now brought our great nation to the knee of a Greater Depression, surfing a seismic wave with the Chicago school at its epicenter, riding a board named Reagonomics, and crashing about a reef known on the charts only as runaway greed meets the ideology of the cancer cell.
"A crude awakening has settled over our nation, an awakening that those who told us it was all in our best interests may have actually been lying to us."
A crude awakening has settled over our nation, an awakening that those who told us it was all in our best interests may have actually been lying to us. Lying to us as they signed over our paychecks to their derivative accounts, their off-shore tax shelters, and their hedge funds, all while telling us the rising tide would soon lift us, too -- despite the fact that our legs were anchored to the sea floor.
And now, among the wreckage, and even though our new president has brought about a Keynes redux, there are those who still cling stubbornly to that failed and selfish ideology.
Such as our state’s Governor who proposes, counter to reason, and counter to pragmatism, that the solution to our going down is to increase the speed at which the ship of state is broached.
Perhaps Mr. Daniels needs to listen to Mr. Greenspan’s mea culpa. Would that it could make a difference.
For while at the individual level it may make sense to cut costs in a time of economic retraction, for the whole to do so -- meaning government and our institutions, such as Indiana University -- it only shrinks demand. Meaning it tightens the gyre and, like a ballerina tucking in her legs, accelerates the drain to collapse.
I can put that in English: government cutting spending during times of economic contraction only increases the rate of contraction and flirts with disaster. That was the lesson Keynes taught us near on a century ago, a lesson forgotten by some who insist, like children, that the market offers free lunches. But a lesson nonetheless.
Here’s to you, Pops. I’m thinking of you.
Gregory Travis can be reached at firstname.lastname@example.org.