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Tom Toles
Posted at 07:30 AM ET, 10/06/2011

The supply of demand

Read that coherent demolition of Keynesian economics? Then send it along, I still haven’t seen a persuasive one. What I have seen is: A classic financial-sector driven economic tailspin. And a situation that Keynesian-oriented economists have been describing, and predicting, more accurately than anyone else. And everybody around the world trying to budget-cut their way out of the crisis, when that only makes the collective situation worse.

It apparently is deemed sufficient to say Keynes’ name with a sneer to be considered a thoughtful rebuttal. If it is said at all. Businessmen say we should get a businessman to run the government. Get in there and cut some more fat out. But you should no more expect a businessman to understand macro-economic theory than you should expect a politician to understand a production line. Businessmen do not seem to understand Keynes any better than a layman.

Of course you might ask: do I? Probably not! Another layman here! I THINK I see a global economy collapsing from lack of consumer demand, and everybody everywhere doing their utmost to cut that demand further. We sure had a lot of talk about the “supply side” of the equation over the last few decades. Did the “demand side” disappear out of the economy altogether? Oh, wait. The rich are still demanding more tax relief!

By  |  07:30 AM ET, 10/06/2011

 
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