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el_punkoid_nouveau BS: Last Days of Tony B. Liar? (22) RE: BS: Last Days of Tony B. Liar? 16 Jul 06


Richard Bridge says "Gordon Brown has virtues but as for fiscal rectitude he appears not to have read Keynes."

Having been a student of economics and (more pertinently) economic history for thirty odd years, I have long believed that there are only two believable economic theories that actually work in the light of empirical evidence.

1.   Keynesianism as propounded by the great man himself. The basic theory propounded by JMK was exactly that - basic. It has been taken up, bastardised, turned around, respelled and finally diced by politicians and economists since, as for example in "Full Employment" (the maximum employment an economy can sustain at a given point in time - unless I am mistaken, which is always a possibility). But the raw basic Keynesian theory that the economy constitutes three parts, one of which is Government spending which can be used to boost or shrink the economy very crudely is borne out be the evidence. Again, as an example, there were still one million men unemployed in the British economy in the spring of 1940; at which point there was a massive increase in Government spending - the Second World War, and the unemployment problem promptly disappeared.

However, using it to try and fine tune the economy doesn't work - it takes too long for tax changes and other initiatives to have any impact, by which time other factors have come into play.

2.   Schumpeter's cyclical theory - three cycles, long, medium and short term, all of which periodically hit either a high or a low together, and have the same impact as an economic Krakatoa. If you look at economic development over the last three hundred or so years, there has been a major depression every fifty years or so. Which frequently gets sorted out by a bloody great big war - and back to Keynes.

Which suggests to me that our Gordon's claim to have ended boom and bust is basically a load of bollocks. And he knows this, which is why he keeps changing the date of the start of the cycle.

And, of course, dear Reader, you are entitled to think this a load of fetid dingoes kidneys. Personally, I do not give a damn whether the next Prime Minister is from North, South, East or West of any particular border (although it is high time that we had one from God's Own County), just so long as it is neither a sycophantic warmonger or a smugly self-satisfied walking disaster.

Rant over!

epn


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