Post-Keynesian Problems

In his June 12, 2010 blog entry, UC Berkeley public policy professor Robert Reich touts JM Keynes’ philosophy as an (the?) answer to the current economic situation:

Keynes prescribed two remedies – both of which are now necessary: Government spending to “prime the pump” and get businesses to invest and hire once again. And, as Keynes wrote, “measures for the redistribution of incomes in a way likely to raise the propensity to consume.” Translated: Instead of big tax cuts for corporations and the rich, tax cuts and income supplements for the middle class.

On first mention this sounds reasonable. The top one percent of Americans control the country right now. I have absolutely nothing against people being paid well for hard work, but, using the banking fiasco as a primary example, isn’t it obvious enough isn’t enough any more? Chicanery that passes for hard work is still chicanery, isn’t it?

More questions come. Do most middle class people think of income supplements for themselves when they hear talk of redistribution of income? Don’t they think welfare and lazy people picking up freebies? I’ve read a good many books on how the right took over the mantras of the left, but I’m still unclear on how this sort of wool pulling happened.

More importantly, is this situation fixable by something as basic as taxation? Does it matter if someone were to redistribute by taxing and supplementing as Reich suggests? Where is the consideration of a lapsed manufacturing industry, overpopulation, dwindling resources, possible climate change, and other factors that simply were not there when Keynes came up with his theory? How will this affect the redistribution were it to happen?

Worse yet, is there a chance that our government would possibly act against the wishes of the one percent who own the lobbyists and control the purse?

I wish a recessionary economy were all we had to worry about. I fear we live in a post-Keynesian world.



One Response to “Post-Keynesian Problems”

  1. Links: From flawed regulators to tainted juices « eats shoots 'n leaves Says:

    […] writing a recent post on the implications of the current economic crisis, Cassandra, who blogs at Uncommon Scolds, was thinking along many of the same lines: In his June 12, 2010 blog entry, UC Berkeley public […]

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