Re: Keynes, corrupted, cannot work.

["Schulte-baeuminghaus" <schulte.baeuminghaus@xxxxxxxxx>]

Dear Ed,

As early as 1971 (publication date of The Indigent Rich),  I myself wrote
about the Golden Quarter Century and how it had been corrupted.
With much of what you say, I can agree.
The great Keynesian supports of the Bush Administration - and indeed the
Clinton Administration - were and are law enforcement (including the war on
drugs), farm support and defence/security.
The annual cost of defence and security is easily the biggest in world
history by any calculation that I can think of and is heading to a figure
almost equal to the total GNP of Australia - and of course far beyond the
total GNP of the vast majority of countries members of the United Nations.
That expenditure supports a huge defence/industrial complex which lies
outside what I might call the "free trade jurisdiction." It also results in
a huge arms export industry which has meant that virtually all countries
around the world are armed to the teeth - with sophisticated weapons - to an
extent we have never known before. The United States is not alone in this
massive arms export but it is the number one player.
The Keynesian farm supports, especially with their export subsidies, have
crippled agriculture in many of the developed countries as well as in some
of the rich countries such as Australia.  Again, the United States is not
alone in this. Farm supports in the form of the Common Agricultural Policy,
have been a major element in keeping the old EEC and the present EU afloat.
It is difficult to say which of the dedicated "free traders", the US or the
EU, is more guilty of violating its free trade policies in persisting with
its farm supports; but what we can say is that both are guilty and have
distorted agricultural trade to the disadvantage of poorer countries for
almost four decades. (Japan, as the world's second economy, is in the same
farm-support league as the US and EU though not in terms of exports and
export subsidies.)
The third Keynesian group of supports also have nothing to do with "free
trade." The drug war is as unwinnable as Viet Nam and everyone knows it.
However, there are now a rich variety of vested interests that never want it
to stop. The obvious solution to the drugs problem is the solution adopted
belatedly to the Prohibition problem; but no one wants it because the drug
war is of so much advantage to so many.
A large part of the war against drugs is law enforcement which provides
another huge Keynesian support. I think there are now 2 to 3 million in
United States gaols. Some say it costs about $50,000 a year to keep each of
these prisoners in gaol. Some say that's an exaggeration. Just pick your
figure and multiply it by 2 to 3 million and you have a major
law-enforcement industry in the incarceration program itself. Add in the
police forces, the drug and customs officers with all their equipment and
it's really big-time - and none of it subject to competition across the
national frontiers.
These are the big consumers of the taxpayers' dollars. Expenditures on
social benefits have been kept under careful restraint and of course tax
rates on higher-income individuals have been cut fairly constantly for a
couple of decades. If you earn a million dollars these days you pretty much
get to keep it. If you earn $50,000, you lose a fair slice keeping the
defence forces in shape, the battlers against drugs well-paid and
well-equipped, new gaols built and the prisoners well-fed and the mostly
wealthy farmers guaranteed incomes year after year.
The Keynesian supports are mainly for the rich. Their tax burden has been
cut relatively to the poorer sections of the community who benefit less from
public expenditures.
It's a sweet system, but of course the United States is not alone in
embracing it.
Most countries do the same thing although most countries are not able to
reap the benefits to the same extent as the United States.
What do we do about it?
Sooner or later something's got to give. That's about all we can say.
There's a lot of concern and unhappiness around the world which has been
expressed but not clearly articulated.
Sooner or later it will be. Terrorism - never justified - is one form of
articulation. We can only hope that more rational forms of expressing
disquiet will emerge and that governments and international agencies will
pay attention.
That is what the Democratic Initiative for Victory Over Want is all about.


James Cumes
http://VictoryOverWant.org
http://www.PetitionOnline.com/flatfoot/petition.html

----- Original Message -----
From: "Ed Goertzen" <egoert@xxxxxxxxxxxx>
To: "Schulte-baeuminghaus" <schulte.baeuminghaus@xxxxxxxxx>
Cc: "g kohler" <gko15@xxxxxxxxxxx>; <bgnway@xxxxxxxxxx>; <adunk@xxxxxxxx>;
<ccw@xxxxxxxxxxxxxxxxxx>; <egoert@xxxxxxxxxxxx>; "John Gelles"
<johng@xxxxxxxxxx>; "Victory Over Want" <VOW@xxxxxxxxxx>
Sent: Tuesday, May 14, 2002 6:08 PM
Subject: Keynes, corrupted, cannot work.


> Hi All:
> Re: Re: Demand sufficient to buy supply at a profit: The VOW Petition
>
> John Writes the response to Gernot below (Both are tooo modest!) and I
> concur. The essential problem of Keynes is that his original, implimented
> proposals, that gave the free world what historan E. Hobsbawm calls the
> "Golden Quarter Century" from 1945 - 1970, were corrupted both on the
> national level by removing safeguards and similarly on the international
> exchange level.
>
> Certainly, by corrupting Keynes, his proposals could not work. Ellemental
NO?
> Regards
> Ed G
> PS
> Regrettably, I don't "do WWW".  The information obtained is, for me,
> overload, and searching, for me, not a productive use of time.
>
> PPS
> The Bush admin Keynesian pumping of money into the anti terrorist
campaign,
> and the new farm subsidy bill are pure Keynesian. I susspect the current
> nat. & internat. monetary system is in its final stages before a massive
> implosion. Manipulations will become increasingly massive and
unpredictable.
>
> =================================
> >     Thanks to Gernot Kohler for his ideas on demand and
> >     supply.
> >
> >     Gernot is well known for his suggestions that Global
> >     Keynesian practice would help solve the problem of
> >     inadequate hard-money aggregate demand.at prices
> >     to sustain business and society.
> >
> >     I am a follower of Gernot in this respect. He implies
> >     that governments and combinations of governments
> >     must subsidize demand in a way to sustain labor,
> >     environmetal, democratic and business viablilty
> >     standards -- and that there may be many ways to
> >     accomplish this objective.
> >
> >     In addition to the above implications, I would add
> >     that governments would do well to discourage
> >     private spending to make room for greater public
> >     purchasing of publicly required assets -- such as
> >     schools, hospitals, infrastrucure, etc., and
> >     especially, of full employment anti-poverty
> >     projects and programs, etc.
> >
> >     I would also add the tax-free potential for gov't
> >     spending that replaces private spending.
> >
> >     It is hard to say at this date what Keynes would
> >     write today. In my view he would see the harm to
> >     the middle class and government that overly complex
> >     taxes have done. He might follow Lerner's dictum
> >     that taxes are unnecessary -- except to prevent
> >     hyperinflaion -- and that there are many better
> >     ways to do that.
> >
> >     John
> > ====================================
>
>
>