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[–] novictim [S] 0 points 1 point (+1|-0) ago 

Why do we study economics and what is the function of an economy? Who should the economy serve?

The answer to that in a democracy is that the economy is meant to serve the voters and we measure that service by looking at per capita GDP. When that goes up, the wealth of the citizenry as a whole goes up. That is what we strive for.

Supply side economics argued that reducing the taxes on the producers and actually paying benefits to the producers at times would drive up per capita GDP growth. But the facts are that that is not what has happened. INstead, the GDP growth has stalled and, just as bad, wealth inequality has increased. That is a lose lose for the system but not for the lucky few that benefited.

Keynesian economics, contrary to Kenyes-bashers who universally either don't understand what Keynes recommended or who have an ulterior motive driving them from being truthful and honest, is not one thing. It is an approach. It is not a "tax the rich" scheme. It not a socialist takeover of capitalism.

Monetary policy as we see being used now in the absence of FISCAL POLICY is NOT Keynesian economics. Increasing taxes and raising interest rates in a booming economy and paying down debt is part of a Keynesian approach. Tell me, when was the last time you saw that in action??

Running negative trade deficits rather than positive ones meaning that you sell more abroad than you buy...when did you see that last? Seriously, if you are thinking that Zero Hedge has any clue as to what Keynesian economics is then you are mistaken. I have personally argued with williambanzai7, the cartoonist who bashes Keynes, on this and he even admits that this is a meme, not a real attack on Keynesian economics! Ben Bernankeand and Alan Greenspan are NOT Keynesian and they cannot influence Fiscal Policy!

The one fundamental principle of Keynesian approach is that demand should drive supply. Demand side economics is what grew the country and created the middleclass. Youcan deny this but be honest about it. This is not religion.

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[–] alalzia 0 points 1 point (+1|-0) ago  (edited ago)

Keynesian economics worked well when USA was the only industrialized nation not ruined by war , today everyone and his mother has industries that can cover demand multiple times. I would be the last person to defend neoliberalism yet we all see how producing goods does not generate any profit and the interest has shifted to hot air selling financial markets. Global GDP is like 10% of the derivatives market and this says a lot.

Booming economies today are products of creative accounting , here in Europe all banks are bust (with UK's ones in the worst condition) the ECB is QEing sink-holes and every morning we wake up wondering which new financial institution we have bought .

The problem is political rather than economic, capitalism can not work in controlled/rigged markets (LIBOR ?) in the same way you cannot have communism without the dissolution of the state (fucking Engels) and since the state is the mechanism that drives protectionism and corruption neither capitalism benefits from its existence . So here is the question : do we keep the state around and move into completely new economics or do we dissolve it and let communities do as they like ?

...and about the zero hedge HAHA .

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[–] novictim [S] ago  (edited ago)

Keynesian economics worked well when USA was the only industrialized nation not ruined by war

This is the "special case" argument. I hope you see that. Sweden (not destroyed) and Germany (destroyed) have both done well pursuing the Keynesian approach. You have basically fallen for a sophisticated lie that you, yourself, have all the tools needed to unravel.

yet we all see how producing goods does not generate any profit

I rebutted that notion with these facts. -> https://voat.co/v/news/comments/964009 Producing your own goods has the benefit of closing the loop on wealth re-circulation as does using your own natural resources. They may be bought for less cost outside of the system but the leakage of wealth by chasing the penny costs the whole system a pound.

here in Europe all banks are bust

Europe is barely producing except in Germany and Sweden and even that is limited. That is the core problem.

Let me ask this. Why do gulf countries and other oil states face ruin when the price of oil collapses? Lack of production as a means of wealth generation is part of the answer. The other part is a lack of domestic consumers/middleclass. If they instituted tariffs and brought a lot more of production back, made labour relatively scarce so as to drive up wages, then things would inevitably turn around. You need to get money into peoples pockets through work and then that jump starts a virtuous cycle. The more activity then the more wealth is generated.

problem is political rather than economic,

Correct. What we are facing is, therefore, a political crisis of a few wealthy interests holding back the prosperity of the majority. The notion of globalization has simply led to the consolidation of wealth and the devaluing of labour and thus the constraining of consumer demand. Politics is creating a economic crisis where a ideology of efficiency = cheap labour has undermined what we should all recognize as a consumer-worker driven economy. It does not need to happen this way.

capitalism can not work in controlled/rigged markets

Wait! You had it right when you said this was a POLITICAL PROBLEM. Don't back away from that. This is about politics and an ideology that is driving politics. And we should know that collusion is inevitable, right? Free markets are just an ideal and we should not pretend they are magical or create things by will of a creator or what not. That would be naive.

There is nothing wrong with capitalism and capitalism is not a political system. Capitalism is just what happens when people have ownership and participate in a market. Capitalism does not say anything about NOT regulating the market or NOT regulating how capital is incentivized to move. We just need the right politics to get things back on track. If we stop strangling the Golden Goose of Worker-Consumerism through busting down wages via globalized labour then we can re-pump up the economy.

I hope you read that Matt Tiaibi article: https://voat.co/v/politics/comments/966972 Collusion is automatic.