Okla-homey
6/5/2006, 06:19 AM
June 5, 1883 John Maynard Keynes is born
http://img153.imageshack.us/img153/568/11016512314007mv.jpg (http://imageshack.us)
123 years ago on this day in 1883 John Maynard Keynes was born. The 6'6'' English economist argued for the benefits of full employment and active government involvement in economic matters. Sounds boring I know but keep reading because you need to understand when a politican says he or she believes in Keynesian economic principles.
Born in Cambridge, England, Keynes's early career centered on fiscally minded government work, both at home and in India. Following the close of World War I, Keynes began writing about various economic issues, publishing attacks on the decision to saddle Germany with heavy reparations -- which proved very prophetic since those harsh financial penalties exacted by the Allies on Germany ultimately helped Hitler gain national prominence in the cash-strapped nation.
http://img153.imageshack.us/img153/2527/john20maynard20keynes20by20dun.jpg (http://imageshack.us)
During this same period Keynes also began his increasingly critical investigation into then dominant fiscal policies, including "laissez-faire" economics. IOW, the d00d believed in and wrote persuasively to many that governments could and should exercise significant influence over markets and fiscal policy to bring about prosperity.
By the early 1930s much of the Western world was struggling through dire economic slumps, which only reinforced Keynes' belief that governments, rather than "natural" fiscal forces, should be relied upon to steer national finances. He believed that running deficits during tough times was sort of like economic Viagra and a nation's economy would ultimately be reinvigorated.
http://img91.imageshack.us/img91/4826/keynes1xm.jpg (http://imageshack.us)
Keynes articulated these beliefs in The General Theory of Employment, Interest and Money (1935-1936), a landmark work that informed Roosevelt's interventionist approach to ending the Depression. Its tough sledding to read unless you are an economics geek but suffice to say its considered holy scripture if you favor significant governmental involvment of a nation's economy to remedy bear markets and economic recessions.
Keynes' basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That's because the private sector won't invest enough. As their markets slow, businesses reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption and even less reason for business to invest. The economy may reach perfect balance, but at a cost of high unemployment and social misery. Better for governments to avoid the pain in the first place by taking up the slack.
Keynes had no patience with economic theorists who assumed that everything would work out in the long run. "This long run is a misleading guide to current affairs," he wrote early in his career. "In the long run we are all dead."
http://img153.imageshack.us/img153/3779/mainkeynes6md.jpg (http://imageshack.us)
In 1944, the U.S. government called on Keynes to partake in the Bretton Woods Conference and help draft the blueprint for the post- World War II global fiscal order. Whatever his past success in shaping economic policy, Keynes's voice was largely drowned out by American leaders. Just two years after the conference, Keynes died of a heart attack in Sussex, England.
Keynes Gems:
- Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
- Education: the inculcation of the incomprehensible into the indifferent by the incompetent.
- Ideas shape the course of history.
- If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.
- In truth, the gold standard is already a barbarous relic.
- It is better to be roughly right than precisely wrong.
- Leninism is a combination of two things which Europeans have kept for some centuries in different compartments of their soul— religion and business.
- Successful investing is anticipating the anticipations of others.
- The avoidance of taxes is the only intellectual pursuit that still carries any reward.
- The importance of money flows from it being a link between the present and the future.
- The market can stay irrational longer than you can stay solvent.
- The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future.
- (Reply to an accusation of inconsistency) When the facts change, I change my mind. What do you do, sir?
http://img153.imageshack.us/img153/7240/insane7zo9xr.jpg (http://imageshack.us)
http://img153.imageshack.us/img153/568/11016512314007mv.jpg (http://imageshack.us)
123 years ago on this day in 1883 John Maynard Keynes was born. The 6'6'' English economist argued for the benefits of full employment and active government involvement in economic matters. Sounds boring I know but keep reading because you need to understand when a politican says he or she believes in Keynesian economic principles.
Born in Cambridge, England, Keynes's early career centered on fiscally minded government work, both at home and in India. Following the close of World War I, Keynes began writing about various economic issues, publishing attacks on the decision to saddle Germany with heavy reparations -- which proved very prophetic since those harsh financial penalties exacted by the Allies on Germany ultimately helped Hitler gain national prominence in the cash-strapped nation.
http://img153.imageshack.us/img153/2527/john20maynard20keynes20by20dun.jpg (http://imageshack.us)
During this same period Keynes also began his increasingly critical investigation into then dominant fiscal policies, including "laissez-faire" economics. IOW, the d00d believed in and wrote persuasively to many that governments could and should exercise significant influence over markets and fiscal policy to bring about prosperity.
By the early 1930s much of the Western world was struggling through dire economic slumps, which only reinforced Keynes' belief that governments, rather than "natural" fiscal forces, should be relied upon to steer national finances. He believed that running deficits during tough times was sort of like economic Viagra and a nation's economy would ultimately be reinvigorated.
http://img91.imageshack.us/img91/4826/keynes1xm.jpg (http://imageshack.us)
Keynes articulated these beliefs in The General Theory of Employment, Interest and Money (1935-1936), a landmark work that informed Roosevelt's interventionist approach to ending the Depression. Its tough sledding to read unless you are an economics geek but suffice to say its considered holy scripture if you favor significant governmental involvment of a nation's economy to remedy bear markets and economic recessions.
Keynes' basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That's because the private sector won't invest enough. As their markets slow, businesses reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption and even less reason for business to invest. The economy may reach perfect balance, but at a cost of high unemployment and social misery. Better for governments to avoid the pain in the first place by taking up the slack.
Keynes had no patience with economic theorists who assumed that everything would work out in the long run. "This long run is a misleading guide to current affairs," he wrote early in his career. "In the long run we are all dead."
http://img153.imageshack.us/img153/3779/mainkeynes6md.jpg (http://imageshack.us)
In 1944, the U.S. government called on Keynes to partake in the Bretton Woods Conference and help draft the blueprint for the post- World War II global fiscal order. Whatever his past success in shaping economic policy, Keynes's voice was largely drowned out by American leaders. Just two years after the conference, Keynes died of a heart attack in Sussex, England.
Keynes Gems:
- Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
- Education: the inculcation of the incomprehensible into the indifferent by the incompetent.
- Ideas shape the course of history.
- If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.
- In truth, the gold standard is already a barbarous relic.
- It is better to be roughly right than precisely wrong.
- Leninism is a combination of two things which Europeans have kept for some centuries in different compartments of their soul— religion and business.
- Successful investing is anticipating the anticipations of others.
- The avoidance of taxes is the only intellectual pursuit that still carries any reward.
- The importance of money flows from it being a link between the present and the future.
- The market can stay irrational longer than you can stay solvent.
- The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future.
- (Reply to an accusation of inconsistency) When the facts change, I change my mind. What do you do, sir?
http://img153.imageshack.us/img153/7240/insane7zo9xr.jpg (http://imageshack.us)