Posted by Anti Bernanke on 11/17/09
Last updated 11/19/09

My response to an editorial opinion praising John M. Keynes in the local newspaper.  Thanks to Grateful Ted for pointing it out.

You can view the original editorial here.

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In his recent editorial "There is a reason economist Keynes is a survivor", Allan Powell heaps on accolades for a dead economist who should in fact be blamed for the financial mess we are facing today.  Unfettered spending, easy credit and regressive tax policies are all hallmarks of Keynesian theory in action and is precisely the reason that America continues to wallow in recession, half a step removed from financial collapse.

At the heart of Keynes' theory lies the economic problem of a society that under consumes and saves too much (doesn't sound much like the America I know). These "unused savings" no longer circulate through our economy, so the dollars are literally no longer at work. As production slows and unemployment rises, people tend to spend less and save more, uncertain of what their future holds.  This self-fulfilling downward spiral leads to recession, depression or worse.  Keynes' solution then is for the government to ride to the rescue with massive spending that will create new demand, new jobs and increase consumer confidence, or so the theory goes.

Powell would have the casual reader believe that the government resurrects Keynes' general theory rarely, akin to breaking the glass in the case of a real financial emergency.  The notion that Washington only calls on Keynes occasionally to avert a financial collapse made me laugh out loud.  Keynes' theory has continued to be the dominant economic model for the United States since the Roosevelt administration. When Nixon set the dollar afloat by closing the gold exchange window in 1971 he exclaimed "we are all Keynesians now," reflecting that our country was fully invested in this economic scheme for good or ill.  

Today our federal government fights trillion dollar wars on borrowed funds, bails out auto companies that later go broke, props up banks that payout million dollar bonuses but refuse to lend credit to small business and injects new "stimulus" by allocating $787 unaccounted for billions to fictional congressional districts.  As a nation we should be asking if we're broke yet?  Not in the world according to Keynes.  Even though Medicare & Social Security are known to be unfunded mandates over the next ten years there is no meaningful discussion of how to properly fund these systems.  With complete and utter disregard for the long term implications of such debt creation politicians are now pushing through healthcare legislation that will cost over 1 trillion dollars and convert 16% of our economy into a new government run program.  

Keynesianism has no solution for our current problems and is just dead wrong.  Much like an alcoholic who has been on a binge and wakes up feeling terrible, our country desperately needs to put its financial house in order.  Keynes answer to the hangover is to have a few more drinks when in fact the poison needs to purged from the system.  Over the past 100 years the dollar has lost 96% of its purchasing power through the inflationary monetary policies of Keynes paired with the unstoppable printing press of the Federal Reserve, resulting in a $12,038,000,000,000 debt owed to foreign countries.  We'd be much farther ahead by burying Keynes once and for all, but the politicians by themselves will never kill the golden goose.

There are solutions.  A sound monetary approach would demand that risky ventures, bad businesses and banks with over-extended balance sheets to fail, wiping their mal-investments from the books.  Short term pain would get us on the road to real recovery.  Instead, the current policies of more spending will prolong the recession and unemployment, kicking the can down the road temporarily. The Ludwig von Mises Institute at www.mises.org clearly explains why government intervention and inflationary spending creates moral hazard, mal-investment and unsustainable bubbles, but also offers free market solutions based on human action, the bedrock of economics.

In 1936 John Maynard Keynes closed his General Theory of Employment, Interest and Money with the following statement: "Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist."  How utterly prophetic.

Posted 11/17/09 GratefulTed Hagerstown, MD

Excellent Allen!!! Extremely well done.

Posted 11/19/09 Anti Bernanke Hagerstown, MD

Thanks man. I got a note that the Herald-Mail will run it as a response in this Sunday's paper.

Posted by Anti Bernanke on 07/21/09
Last updated 07/21/09

As Mr. Bernanke sits on the Hill before the Financial Services Committee and "testifies" as to how the FED has narrowly averted yet another financial disaster, we see the FED begin full- fledged defensive maneuvers to head off any opportunity to audit.

On July 9, Vice Chairman Donald Kohn warned that any "substantial erosion" of the FED's " independence" may fuel investor fears of inflation and provoke higher long-term borrowing costs.  Now how exactly would fearful investors "provoke" higher borrowing costs? A rise in interest rates maybe?

On Monday, July 20, Ms. Linda Robertson, a former Treasury official and Enron lobbyist, started working for the FED to improve relations with Congress.  According to the WSJ, Mr. Bernanke has held 25, 1-on-1 meetings and 9 group sessions with Congressional lawmakers over the past 6 months.

Financial Services Committee chair Barney Fwank says "an audit is probably a good idea", but in the same breath adds that he won't allow anything that would "endanger the integrity of monetary policy."

Bernanke recently commented that he would consider a full GAO audit of the FED "a takeover of monetary policy by Congress which threatens the stability of the financial system, the dollar & our national economic situation." 

Now while all these efforts will begin working together to scare the hell out of Congress, investors and any members of public who are casually passing by, this last comment by Bernanke is really audacious.  Excuse me Mr. Chairman, but our Constitution gives Congress oversight of monetary policy in Article 1 Section 8.  Although The Federal Reserve Act could be considered treason, section 2A does not fully cede monetary policy to the FED (it does outline four objectives that the FED is failing miserably on at present).

By law, Congress ultimately has the responsibility and oversight of the Federal Reserve and our economic policy.  If I were a Congressman, I wouldn't want to be blamed right now for having taxpayers on the hook for trillions of dollars. No wonder Ben's starting to feel uptight. Passing HR1207/S604 is our best chance at getting to the awful truth. We should all contact our senators to demand that they support this legislation!

Posted by Anti Bernanke on 10/19/09
Last updated 11/12/09

We must make make every effort to loudly voice our opposition to yet another government boondogle; a steroid enhanced system of government imposed "healthcare." 

Absolutely nothing should come between decisions made between you and your physician, otherwise we are reduced to a form of "veterinary" medicine.  That is, the owner directs the caretaker as to what services you will and will not receive. Murray Rothbard established that there are only three possibilities for life: 1. self ownership where no one owns anyone, 2. everyone owns everyone else or 3. partial ownership of one group by another.  Currently, our system of healthcare largely falls under #3 where by about 50% of all healthcare services are funded by tax dollars under Medicaid or Medicare. Congress is out to drive it to 100% with a government imposed, universal public "option" which will really mean having no option at all.  When you take your pet to the veterinarian what factors helps the owner decide what level of care will be paid for and what will not?  Limited resources.  And ultimately when the costs of treatment outweigh the useful life of Fido we all know what happens.   Why would we expect government healthcare to be any different?

The entire issue of "healthcare" is being debated on the premise that healthcare is a fundamental "human right."  But healthcare is not a right.  Expert treament by a good physician is a comodity that has value and is subject to market forces.  The best physicians practicing at the best hospitals are sought out the world over. Depending on the means at our disposal we will make choices of what treatment we will receive, where to receive treatment, by whom and when.  Our true rights are natural, inalienable, endowed to us by our Creator.  We have a fundamental right to self ownership and to make decisions about our life. We do not have a right to unlimited treatment interventions no matter what our illness or cost.  Framing healthcare as a "right" implies that it should be provided regardless of the cost.  The current road that congress is traveling down will ensure that all costs associated with healthcare will be driven up.  Price fixing, rationing care and unequal competition with private insurers means that more and more of our personal resources will be taken by the governement to support such a system over time.  The means for self ownership will be eliminated as a possibility.  Government imposed healthcare will trample our most intimate, individual liberties in ways that are yet unimaginable.  

Yes reform of the current system IS NEEDED, and the best way to reform "the system" is to abolish it. In other words, remove the government imposed barriers and regulations that prevent physicians and hospitals to care for people in an efficient, caring way. Costs would fall and markets would thrive. 

Call to OPPOSE this scam being called "reform" before congress sees to it that government has invaded one of your last private matters; your health! 

CALL TODAY! MD District 6:

Representative Roscoe Bartlett  202-225-2
721           &n
bsp;        

Senator Barbara Mikulski  202-224-4654

Senator Ben Cardin  202-224-4524