Mario Rizzo of NYU provides a clear and important explanation of J.M. Keynes's nuanced ideas. I am among those who have sometimes been careless in describing Keynes's theory and policy prescriptions.
Mario also blogs at ThinkMarkets.
Rizzo on Keynes
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RIP John Maynard Kenes.
Now let us move to the business of today, that is, what to do with the banks. I copy what I wrote as a comment to one of T. Cowen's posts on big banks:
"We all know that Robert Rubin must know much more than anyone else about Citigroup and Citibank. Although it is not clear, apparently he is now an advisor to BHO (or at least he's close to BHO and L. Summers). Since Rubin was part, a big part, of the problem, let us give him the opportunity of being a big part of the solution. Let BHO set the objectives of any solution to Citigroup and Citibank and then ask Rubin to design and implement a plan to achieve them. The only conditions: first BHO should make public the objectives and justify them, second BHO should publicly justify his approval of Rubin's plan, and finally Rubin should report publicly at least once a week on the progress of implementing his plan. I don't care how much money Rubin is paid to do it; actually I think he should be paid a lot to do it in a very short period of time.
Tyler, you may start a discussion of what objectives BHO should set for solving the Citigroup/Citibank problem. My proposal is to eliminate big companies that cannot fail, so: (1) if Citigroup does not repay all government loans in a very short period of time, the government will force its liquidation, and (2) break down Citibank in as many banks as possible to be sold as soon as possible. Rubin's plan has to define how short that time should be and how to liquidate Citigroup, and how to divide and sell Citibank.
Please don't tell me that Rubin would be a traitor to Citigroup/Citibank executives and staff. As I see the situation, right now he's a traitor to the Dems that have given him the opportunity to earn so much money in Citigroup. Years ago in another country, something similar happened; and it worked."
Interesting how much standard economic theory disregards the human nature of politicians and their supporters.
Let me recommend David Laidler's _Fabricating the Keynesian Revolution_ to everyone.
Laidler does a good job explaining how much of what people take to be "Keynesian economics" was developed by people who were not John Maynard Keynes — and "textbook Keynesian economics" is more this other stuff, and less what you'll actually find in Keynes.
And we should tell the truth — many textbook authors are largely ignorant of the history of economic thought they couldn't tell you what Keynes wrote, and what was invented by others as "Keynesian economics".
Things get worse when the textbooks begin writing about "classical economics" …
What I'm reading is a recount of how one bad idea can generate a thousand bad ideas — it's not really a defense of Keynes.
Politicians have all of the traits of a drug addict, and will rationalize anything — as long as they get their fix. Keynes provided the framework that said they could get their fix, keep their fix, and avoid the pains of withdrawal. Other addicts simply modified the plan.
Junkies hide their needles, alcoholics hide their bottles, and politicians hide their debt.
So Sheetwise are Keynesians done for when they use the 'that isn't what Keynes would have really done'?
"So Sheetwise are Keynesians done for when they use the 'that isn't what Keynes would have really done'?"
They're not "done", they're exposed. The foundation of Keynes is shifting sands.
Maybe a better way to say it is that there's nothing as revealing as a retreating tide to tell you where the rocks are.
Dumbass Muirgeo hasn't made any asinine comments in this thread yet? I bet he doesn't know even one iota of Keynesian claptrap.
It's time to bring in registration so we can keep out muirduck for good.