The Liberal Who Terrifies the GOP Isn't Who You Think It Is. For Starters, He's Dead.
https://www.thedailybeast.com/the-liberal-who-terrifies-the-gop-isnt-who-you-think-it-is-for-starters-hes-dead?via=newsletter&source=EntertainmentTAX HIKES PAY OFF
Joe Biden may be ushering in a revival of Keynesian economic principles that Republicans have lived in mortal terror of for decades.
[snip]
Ladies and gentlemen, meet the liberal today’s Republicans fear most. It isn’t Biden. It isn’t Sanders or Harris or AOC or Elizabeth Warren. In fact, this person isn’t even alive. He’s been dead for 75 years. It’s John Maynard Keynes. And despite what they say for public consumption, Republicans and right-wing elites live in mortal terror of a revival of Keynesian economic principles.
Republicans have a few basic assertions they make about the economy. One, that tax cuts always stimulate activity and pay for themselves. Two, that we should let the market find solutions to problems, and if problems persist, well, the market has decided in its wisdom that they deserve to persist, hence they’re not even really “problems” but simple facts of economic life (inequality, notably). And three, that government spending will almost always be wasteful and do more bad than good.
All three are lies. First, we’ve seen over and over and over again that tax cuts, especially for the rich, do not pay for themselves. They balloon the deficit. All. The. Time.
[big snip]
And it’s Joe Biden leading the way. That scares Republicans, too; they know that a man who carries essentially zero ideological baggage is exactly the kind of person who can make the new economic case to middle America, especially at a moment when Republicans are taking on more baggage than John Jacob Astor on the Titanic. If Biden succeeds here, the Republicans are headed for an iceberg of their own.
= new reply since forum marked as read
All. The. Time. . .
a man who carries essentially zero ideological baggage is exactly the kind of person who can make the new economic case to middle America.'
speech tournaments in 1970's high school. Keynesian ideas made more sense to me even then. Later I watched the PBS series by Milton Friedman "Free to Choose" in the 80s, a big advocate of the "free market"...still didn't make sense to me, seemed like a scam put forward by the rich (corporations and individuals). The only economic trickle down that happens (imo) is yellow in color...it is, and always has been a BS argument designed to separate the middle and lower socioeconomic classes from any real chance to increase their own wealth and stability (and education by means of inexpensive and sound public education options), giving the bulk of wealth and economic growth to the invisible hand capitalists, dogs that they are....
Last edited Sun Feb 7, 2021, 08:30 PM - Edit history (2)
In 1932, President Franklin Delano Roosevelt originally thought that he could offer Americans a balanced budget, so he promised one during the 1932 campaign. However, after getting elected, he soon realized how flawed that thinking was during The Great Depression. Roosevelt had at least three advisors that were fans of Keynes, and it was because of people like them that FDR adopted Keyne's ideas and America recovered as it did. Roosevelt's New Deal had key components that followed Keynes' thinking:
1. First he stabilized banks. He had enough money printed up to more closely match the amount of funds in banks. This was designed to help stop runs on banks.
2. He eventually had bank deposits guaranteed.
3. He created federal works programs like the CCC and WPA in order to give Americans a job and a paycheck to stimulate demand.
4. He forbid the ownership of gold and bought it back in order to secure the value of paper money. This helped people believe in the value of paper money and it ensured that the wages people earned would maintain value, thus ensuring consumer demand. Gold was also set at $35.00 an ounce in order to ensure that paper money always maintained its value.
5. He created organized labor laws that helped workers raise their wages.
Keynes also proposed ideas like the Bretton Woods system for monetary exchange between nations. Keynesian ideas allowed America to recover from The Great Depression and to become the most dominant superpower in the world. They also allowed the Democrats to win tons of elections. These ideas kept America strong and prosperous until the 1960s. Then American Presidents started to ignore how previous presidents operated.
Roosevelt was extremely reluctant to involve the U.S. in a war, so when Germany attacked England during WWII, Roosevelt initially just sent England supplies in secret--all while he was tripling the U.S. air force--also in secret--just in case.
In the 1960's President Johnson had a different approach. I believe that in order to ensure his election in 1964, and in order to show that he was "tough on Communism", Johnson escalated the border skirmishes in Viet Nam. This probably helped Johnson get elected, but over time, this escalation became a costly, unnecessary, bloody, and stupid war.
LBJ did not raise taxes to pay for the war until his term was almost over in 1968:
https://en.wikipedia.org/wiki/Revenue_and_Expenditure_Control_Act_of_1968#:~:text=The%20United%20States%20'Revenue%20and,pay%20for%20the%20Vietnam%20War.&text=It%20was%20signed%20into%20law,Johnson%20on%20June%2028%2C%201968.
Unfortunately, his increase in taxes did not fully cover the costs of everything the government had to cover, including LBJ's war and LBJ's Great Society. This meant that more dollars had to be printed without economic activity to back up those dollars, which meant that in reality, the actual value of these dollars was sinking. Over time, other nations began grumbling about how the U.S. was just printing money when other countries had to actually do work in order to obtain a U.S. dollar.
When Nixon came to power, he inherited all of the expenses that LBJ left him as well as the inadequate tax base to pay these expenses. He also inherited the disgust that other nations had for the way the U.S. was at times just printing money instead of actually creating wealth. Per Wikipedia:
https://en.wikipedia.org/wiki/Exorbitant_privilege
In the Bretton Woods system put in place in 1944, U.S. dollars were convertible to gold. In France, it was called "America's exorbitant privilege"[2] as it resulted in an "asymmetric financial system" where foreigners "see themselves supporting American living standards and subsidizing American multinationals". As American economist Barry Eichengreen summarized: "It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one."[2] In February 1965 President Charles de Gaulle announced his intention to exchange its U.S. dollar reserves for gold at the official exchange rate. He sent the French Navy across the Atlantic to pick up the French reserve of gold and was followed by several countries. As it resulted in considerably reducing U.S. gold stock and U.S. economic influence, it led U.S. President Richard Nixon to end unilaterally the convertibility of the dollar to gold on August 15, 1971 (the "Nixon Shock". This was meant to be a temporary measure but the dollar became permanently a floating fiat money and in October 1976, the U.S. government officially changed the definition of the dollar; references to gold were removed from statutes.[3][4]
Because the U.S. had started to print more and more money to pay for all of it's spending, foreign nations were ending up with more and more American dollars, but those dollars were being values less and less (the law of supply and demand). Eventually Germany had had enough and withdrew from Bretton Woods. Soon after, German money gained in value.
The following sums up what happened:
https://en.wikipedia.org/wiki/Nixon_shock#Background
However, from 1950 to 1969, as Germany and Japan recovered, the US share of the world's economic output dropped significantly, from 35% to 27%. Furthermore, a negative balance of payments, growing public debt incurred by the Vietnam War, and monetary inflation by the Federal Reserve caused the dollar to become increasingly overvalued in the 1960s.[4]
In France, the Bretton Woods system was called "America's exorbitant privilege"[5] as it resulted in an "asymmetric financial system" where non-US citizens "see themselves supporting American living standards and subsidizing American multinationals". As American economist Barry Eichengreen summarized: "It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one".[5] In February 1965 President Charles de Gaulle announced his intention to exchange its U.S. dollar reserves for gold at the official exchange rate.[6]
By 1966, non-US central banks held $14 billion, while the United States had only $13.2 billion in gold reserve. Of those reserves, only $3.2 billion was able to cover foreign holdings as the rest was covering domestic holdings.[7]
By 1971, the money supply had increased by 10%.[8] In May 1971, West Germany left the Bretton Woods system, unwilling to revalue the Deutsche Mark.[9] In the following three months, this move strengthened its economy. Simultaneously, the dollar dropped 7.5% against the Deutsche Mark.[9] Other nations began to demand redemption of their dollars for gold. Switzerland redeemed $50 million in July.[9] France acquired $191 million in gold.[9] On August 5, 1971, the United States Congress released a report recommending devaluation of the dollar, in an effort to protect the dollar against "foreign price-gougers".[9] On August 9, 1971, as the dollar dropped in value against European currencies, Switzerland left the Bretton Woods system.[9] The pressure began to intensify on the United States to leave Bretton Woods.
Instead of raising taxes to pay for all of the U.S. spending, or cutting spending, or doing both, Nixon took the U.S. off the gold standard. This allowed the U.S. dollar to sink in value, especially when compared to gold or other currencies. Suddenly, the U.S. dollars that oil companies were getting were worth less and less. In opposition to U.S. policies in the Middle East, as well as the sinking value of the U.S. dollar, OPEC, a cartel of oil producing nations, began deliberately reducing the amount of oil that they produced in order to increase the value of the oil that they were still producing (the law of supply and demand). The following chart shows how gold was relatively cheap when compared to the U.S. Dollar at the beginning of 1971, and how the price of gold versus the U.S. dollar skyrocketed during Nixon's term. This shows the dollar was worth less and less when compared to Gold.
https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
Nixon claimed he believed in Keynes, yet he did things that massively undid the good things that had happened because of Keynes. Nixon removed the gold standard put in place by FDR. Nixon created the situation by which Bretton Woods was destroyed because he did not raise taxes, did not cut spending, and he also worked to sabotage the Viet Nam peace talks before the 1968 election because he figure it would help him get elected.
Nixon also pressured the Federal Reserve to keep interest rates low because Nixon feared that the economy would slow if interest rates rose. This further created inflation. All of this inflation meant that workers were actually receiving less value in their paycheck. This lowered the purchasing power of workers. Increasing oil prices meant that workers had less money to spend on things besides gasoline. During the 1970s, America experienced stagflation--a stagnant economy along with inflation--because Nixon--step by step--undid what FDR had done with Lord John Maynard Keynes's guidance.
After all of the damage Nixon did, who did conservatives blame? Of course, they blamed Keynes. Conservatives said things like "Keynes said that spending money would lower unemployment, and look at the disaster that was created". Keynes never said to spend money like a drunken sailor. After World War I, when Allied Nations were seeking to impose stiff penalties upon Germany, Keynes warned about the economic disaster that would happen to Germany and left the meetings that were happening between nations in disgust. Later, he watched as the German Weimar Republic, desperate to pay off the debts imposed by allied nations, even after France seized some of Germany's industrial base, printed money to pay off the debts and created so much hyper inflation that it took a wheelbarrow of money to buy a loaf of bread.
If anyone knew the dangers of just printing money instead of stimulating economic activity, it was Keynes. Because the world saw what happened in Germany, both Keynes and FDR knew that FDR had to raise taxes and not simply print money. Nixon paid no attention to what the world had learned from the disastrous Weimar Republic.
Nixon undid a lot of the good that FDR and Keynes did, and then Republicans blamed Keynes when Nixon undid the work that FDR did that was inspired by Keynes.
“But there’s a bigger historical point here. If the Democrats pass a one-point-whatever-trillion dollar stimulus package, the Republicans will freak. They’ll scream about the waste. They’ll scream about the deficit.
They’ll scream about everything except what they’re really, truly afraid of: that it will work.”
Let Donald's cult stay busy fighting amongst one another while we go about repairing our beautiful nation, and winning more seats - both in DC, and locally.
It's just brain-mush, and it's the result of constant pounding by the Faux Noise and Rush Limpballs hate-radio.
but since he instituted a bunch of Keynesian based programs and principles, going right to the source works for me.
