Prescription for Keynesian Action

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

"The inability [of an insolvent nation that refuses
  to impose austerity in the face of critical need ]
  to borrow hard currencies, may well be a God-
  sent cure for most debtor economies -- much like
  the inability of drug addicts to get new fixes;  but
  to do effective withdrawal, debtors need to do
  four things:
    1) replace an export strategy with domestic de-
        velopment,
    2) adopt a monetary policy based on the State
        Theory of Money; and impose currency control,
    3) adopt a full employment and rising wage regime
        in the economy through state credits, and
    4) substitute central banking with national banking
        to support the health of the economy rather than
        support the value of money."
                    -- Henry Liu, May 25, 2003

The US dollar's current cheapening started the talk
that brought Henry Liu to repeat his oft-told prescrip-
tion for Keynesian reforms that would correct much
of the fault with the global economy.

While political war between the George Bush Team
(GBT) and the rest of the world proceeds, with GBT way
ahead on points, the economists of the world are now
split wide open:  the neoliberals in Europe, and phony
deficit hawks here, are at odds with neocon political
ideology in support of near-radical individual freedom
who have embraced the deficit dove Keynesian ideas
that are close to mine and Henry Liu's.

        The State Theory of money is where history
        has brought us. The neocons know that it alone
        can pay for their radical dreams.

The problem lies with neocon worship of "winning"
(and to a lesser degree "excellence") that colors GBT
objectives and neocon lack of  necessary "respect" for
the enormous aggregate needs of ordinary people --
of whom God made so many.

Henry and I are able to get our heads around that need
for respect.  In his words, "full employment, rising
wages" are crucial.  The GBT has no love for very high
wages for very ordinary people -- they see it as taking
something away from "winning".

            They are wrong -- and I can only hope they
            will soon see merit in Henry's prescription for
            every debtor nation. The USA is number one
            among them.

Meanwhile, among left-wing scholars some cry "fascism"
as they watch the GBT. Wiser heads know our institutions,
our history and our faith that the center will hold are all
in tact.
            But the center having moved right under
            Clinton now must left under Bush. He has
            defeated the deficit hawks. He must defeat his
            team's lack of enthusiasm for his own promises
            to leave no child behind and no one still looking
            for work when there is so much work to be done.

        John Gelles