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We're all Keynesians Again?

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    We're all Keynesians Again?

    Government borrowing to stimulate markets, direct government involvement in the ownership and management of financial institutions.

    The death of monetarism? Perhaps Thatcherism will pre-decease Thatcher. Now wouldn't that be a fitting final boot up the arse for her.

    #2
    We're all Keynesians Again?

    In the long run we're all dead anyhoo... that's an exact word-for-word quote

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      #3
      We're all Keynesians Again?

      In practice, maybe, Chippy, but probably not in principle. Nobody's really pitched these bailouts in Keynesian terms as countercyclical deficit spending. It's just been a question of the markets being fucked and governments having to step to avoid a politically unacceptable depression. For instance, Republicans blocked one genuinely Keynesian part of the Senate's bailout bill, an extension of unemployment insurance.

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        #4
        We're all Keynesians Again?

        What GY said.

        I expect to begin to see serious proposals for Keynesian stimulus packages once we've actually experienced the material downturns in retail demand and industrial activity, as well as the increases in unemployment, all of which are unfortunately likely.

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          #5
          We're all Keynesians Again?

          I thought Monetarism had died before the end of Thatcher's first term. Doesn't it have some specific meaning about controlling inflation just by controlling money supply?

          Also, was Keynes in favour of nationalisation? As I understand it, the impetus for that came from the Labour Party Conference in 1945 with a young James Callaghan leading the way against an unenthusiastic Attlee.

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            #6
            We're all Keynesians Again?

            Yeah, this isn't the return of Keynesianism but it's certainly the intellectual defeat of light-regulation Thatcherism, with its always-dishonest mantra of 'markets working best when government leaves them alone'. The 'free market' hasalways been dependent on government, even in 'good times'; it's just that its proponents are no longer able to convincingly argue that the system needs government off its backs. And their spoilt-baby whingey demandingness (again, always a prevailing feature) looks that bit more visibly pathetic.

            A very un-Keynesian public spending squeeze is likely to follow all this.

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              #7
              We're all Keynesians Again?

              To be honest, Keynesianism has been somewhat resurgent for quite a while, at least on this side of the Atlantic. Gordon's golden rule was touted as prudence but was really designed to allow countercyclical spending.

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                #8
                We're all Keynesians Again?

                Wasn't that undermined by the fact that he was running substantial deficits while the economy was at the top of the cycle?

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                  #9
                  We're all Keynesians Again?

                  Obviously. I never said he was consistent about it.

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                    #10
                    We're all Keynesians Again?

                    "Finance nerds" who haven't seen it yet should definitely read John Kemp's "Follow the Money" series on FT Alphaville.

                    I found it extremely interesting, and rather scary.

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                      #11
                      We're all Keynesians Again?

                      Deleted post- bedtime

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