After hundreds of thousands of conservatives gathered for a rally in Washington, DC in August 2010, there was a ‘counter rally’ for liberals a few days later. A reporter was on scene holding up his own sign “OBAMA = KEYNESIAN?” so that attending libs would approach him. No doubt he was hoping for some good video clips. This one is absolutely classic, with excerpts highlighting these low information voters. It’s under two minutes and worth watching. (Look for the Hitler costumes and animal masks – hilarious.)
Although the IQs exhibited in the video are either naturally low or impaired by pharmaceuticals, we need to be fair on one point. A lot of fiscal conservatives didn’t know what a Keynesian is, or still may not know. Some of us “woke up” in the second Bush administration instinctually knowing that something was wrong, and a lot of us have been doing our best to educate ourselves about the history and the issues that were omitted in the progressive educations of our youth.
So what is a Keynesian anyway? I know that none of you thought the term referred to someone who was born in Kenya, but still might know what one is. John Maynard Keynes was a British economist of some note and founded a school of economic thought called Keynesian economics. Those who believe in his economic principles are known as “Keynesians”. Keynes’ book “The Means to Prosperity” was published in 1933 during the Great Depression, and mentioned the multiplier effect of government spending. The general idea is that the government will spend money on projects, workers will get wages they spend, causing wages to more workers.
Sounds great, doesn’t it? Nancy Pelosi believes it and has said that unemployment compensation and the food stamp program greatly benefit the economy. But Nancy and the other DC Keynesians seem to forget one basic fact: the federal government has only two ways to get the funds for these ‘stimulus’ programs or projects: it can either take money from the people (taxes) or incur debt (which is now about the same thing as printing money, but I’ll leave that for another article). When the feds confiscate one individual’s wealth to transfer it to another, the one taxed must reduce his spending, even if the recipient increases his.
This is what Joe got Obama to admit on camera during his first presidential campaign: “When you spread the wealth around it’s better for everybody”. Keynesian economic principles are ALL about wealth redistribution. Savings is bad, consumer spending is good, and a wealthy man might save. Hence, take it from the wealthy man and give it to the poorer man. Saving is reduced and consumer spending is increased. Poof! The economy improves.
It amazes me how many people still believe this drivel. Did the Keynesian stimulus programs of FDR end the Great Depression? Absolutely not. Read Burton Fulsom’s book “New Deal or Raw Deal”. Did the spending of the Japanese government fix that economy? Nope. Read about Japan’s lost decade (really two decades now) here. There are countless examples (e.g. how is Greece doing now)?
The excessive taxes promoted by Keynesians result in LESS investment by job creators, thereby harming employment, not helping it. Individuals still have free choice (at least for now), so would one allow the US government to confiscate the earnings from a US investment if other investment choices are available? Duh. The math is simple. Russia new has a flat tax rate of 13% on all individuals (including its newest citizen, Gerard Depardieu, the actor who fled France’s new 75% tax on high earners). The world is officially now upside down
And, yes, Virginia, Obama is indeed a Keynesian.