by Don Boudreaux on October 25, 2011

in Myths and Fallacies, State of Macro

My son, Thomas (now 14), has always loved Halloween.  And he doesn’t even eat candy.  (Never has liked any of it (really).)   He insists that Halloween is his favorite holiday: “Even better than Christmas,” says Thomas.   I sometimes think that he’s not joking.  One reason for his affection for this night of pumpkins and ghouls and children practicing for political office by threateningly seeking ‘protection’ payments from neighbors is that Thomas loves to decorate for the hallowed event.

Our house is always the most decorated in the neighborhood for Halloween.  Witches and fog machines and the like start appearing on our front porch and yard in late August.

Several years ago – before the housing bubble frighteningly burst – Thomas, his friend Paddy, and Thomas’s grandfather fashioned some grave stones.  My favorite, and his, is this one:

I’m very proud of my son, as this grave stone was entirely his idea.

If you look carefully you can make out the asterisk just above Keynes’s name, but not the text to which the asterisk refers.  That text reads “hopefully forever.”

Alas, that hope was dashed about three or so years ago.

Chains a-rattlin’, Keynes’s ghost again stalks the land – but this spectre is more a result of people’s uninformed fears about the long-lasting inadequacy of aggregate demand unassisted by goo-gobs of (preferably deficit) spending by the state than it is a source of such fears.  Keynes brilliantly tapped into people’s primitive anxieties about commercial economies – anxieties stirred by each person’s natural focus on his or her role as a producer, and the consequent delusion that as demand for his or her services as a producer goes, so goes the economy – to resurrect fallacies long-ago entombed and doctrines long-ago buried by serious economists, dress up these fallacies and doctrines in impressive (if awfully gaudy) costumes, and send them out hither and yon, trick-or-treating, to spook the natives into believing that ailing economies not only can, but can only, be cured by goblins spending other people’s money madly.


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