The Drum on the GFC

In The Drum David Barnett discusses our financial woes: 

Prolonging the GFC 

Governments around the world, led by the United States, and with Australia following closely, have in the opinion of a large body of current academic opinion been going about combating the global economic crisis the wrong way. They are prolonging it.

They have resorted to Keynesian stimulus, whose virtues are all political.

The Melbourne academic Steven Kates, long a champion of micro-economic reform, says governments can be thrown out by new ones that denounce their predecessor’s policies. But Keynesian theory is an infection that has burrowed deep into an entire discipline. How can that discipline be made to recognise that at its core is a theory of such devastating error that any policy judgement built from it is almost certain to be wrong, Kates writes in Quadrant.

A process of reassessment is happening. The newly elected Tory government of David Cameron in Britain is cutting back drastically on the level of government expenditure it inherited from Gordon Brown’s Labour government.

Quadrant ran a series of articles arguing that the economic profession in government service would appear to have been hijacked by interventionist Keynesian economists. That’s an understatement.

Source: The Drum


See Quadrant articles:

Peter Smith “Time to Topple Keynesian Economics” here…

Steven Kates “Say’s Law and the GFC” here…

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