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Letters by a modern St. Ferdinand III about cults

Gab@StFerdinandIII -

Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands.  Cults everywhere:  Corona, 'The Science' or Scientism, Islam, the State, the cult of Gender Fascism, Marxism, Darwin and Evolution, Globaloneywarming, Changing Climate, Abortion...

Tempus Fugit Memento Mori - Time Flies Remember Death 

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Tuesday, March 13, 2012

Keynes was indeed a Keynesian

Every nation state is Keynesian now.

by StFerdIII

One of the more diabolical personalities of the 20th century was certainly economist John M. Keynes. His theories on macro and monetary economy, which have more akin to mysticism than physical reality, are still taught as dogma cum truth in university. Keynes' irrational and entirely unfounded set of principles have no place in policy, education or even in abstract theory.

One hears from the 'Left' – which is most of the voting population – that Keynes was 'not a Keynesian'. This is rather banal. Keynes was indeed a virulent Keynesian and extremist. The entire edifice of massive fiat currency debt and attendant monetary devaluation, in train since 1971 [and one could argue before this date]; when the Bretton Woods system and Gold Standard fixed exchange rate were disbanded; is directly attributable to his malevolent influence. We know this from the debate in the UK during the 1920s, when Churchill was Chancellor [1924-28] and Keynes sadly, an adviser to the government.

One can summarize Keynesian macro-economics, developed from 1920 to 1924 during the Gold Standard debate, and then expounded during the 1930s into his seminal works, into the following 3 points:

  1. Aggregate demand is the most important macro-economic 'variable'. The supply side or productive means of society is not the chief concern of government. When the economic cycle is weak, or when wages and purchasing power are declining, government must 'stimulate' the aggregate demand through spending and social works programs. Income redistribution thus becomes an economic goal, buttressing overall demand and easing social tension.

  2. Fiat currencies and flexible exchange rates are better than fixed rates such as the Gold Standard. Keynes reasoned that a fiat currency will allow governments maximum flexibility to use monetary policy to stimulate national aggregate demand. In his seminal 1936 work 'The General Theory', he advocated driving interest rates towards zero. The rationale was that with zero rates, capital would cease to be scarce, and income distribution would become normalized and 'more fair'.

  3. Protectionism of industries and thus of jobs, is more important than trade. Governments must use tariffs and other barriers to preserve wages and jobs in the national market, no matter how obsolete the industry might be.

This is the essence of Keynesianism. It was manifest in Keynes' objection to the British returning to the Gold Standard in 1925. In Keynes' view the Gold Standard was a 'barbaric relic', which impeded the stimulation of demand and the flexibility needed by governments to expand the money supply and smooth out business cycles, especially recessions. He lobbied Churchill on the above 3 points but lost out to the mainstream view of the time, which held that gold was the only real currency and that the value of printed paper had to be tied to a certain quantity of possessed and stored gold. If a government printed money, without increasing the gold supply the currency value would naturally fall, and people would exchange the paper for gold. Real incomes would fall, import prices would increase, exports would likely strengthen. If the government printed too much money, inflation would be manifest. The only way to restore the currency value to its previous level would be to attract or buy gold and hold it in reserve.

Keynes rejected this and the entire thesis of Orthodox economics. In his view of the world, stated in his major works, man was not 'free' to conduct economic exchange. He had to be regulated in that exchange. A government's main task was to have a balanced economy, close to full employment. In this regard gold, fixed exchange rates, free or fair trade, and the lack of deficit financing in periods of economic growth, were inimical to the realization of the social good. Monetary and fiscal powers had to be centralized. Rates of interest must be driven close to zero. Printed money or fiat currency, was mandatory, replacing the old notions of mono-metallic value and linkage.

Keynes did not trust the market, nor the actors in a market system. He convinced himself that a market system could never attain full employment – the crux of Keynesian mysticism. In place of the chaos of a market, governments had a social duty to intervene and use all available monetary and fiscal techniques to redistribute incomes, sustain even poorly run businesses, neuter trade which corrupted local jobs; and manage what he termed 'economic prosperity'. This mandated social engineering. In an oft-quoted letter that Keynes wrote to Austrian economist Friedrich A. Hayek in 1944 he expressed his desire for such centralization:

"I should say that what we want is not no planning, or even less planning, indeed I should say that what we almost certainly want is more. Moderate planning will be safe if those carrying it out are rightly oriented in their own minds and hearts to the moral issue. Dangerous acts can be done safely in a community which thinks and feels rightly, which would be the way to hell if they were executed by those who think and feel wrongly."

Notice the mystical nature of this supposed 'economist'. 'Moderate planning' – what does that mean? Does it mean the number of civil servants or fiscal spend, or moderation in statist thought? What does he entail by 'oriented in their own minds and hearts'? What does this statement of emotionality and opacity mean? Does Keynes or any other central planner know what is in the hearts and minds of everyone at the aggregate level? This is rather unlikely. Is his idea of 'moral' issues the same as everyone else? Does he or some central planning King or Prince get to decide what is moral, right and necessary? What if they are wrong?

Keynes was a Keynesian. And an extremist at that. His ideas of unfettered fiat currency manipulation informs all modern economies. A return to the Gold Standard is politically impossible now and would only happen if the entire political-economy of key nation states crash in a depression. Even then, the Keynesians who control governments would obstruct such a return. Central-statist planning under 'Conservatives' as well as Socialists runs amok throughout the advanced nations. Civil service power is unimpeded, and social engineering is so advanced that there is no real possibility to limit or contract governmental power. State coercion and relevance has increased in a globalizing world, not diminished. Rates are indeed zero today as they have been for most of the last decade plus. Thus all three key issues of Keynes' platform make up our macro-political economy.

Keynesian is the political-economic foundation of the modern world. This is why modern states are in such financial trouble. Keynesian economics is more mysticism than rationality. It is not premised on real world events, or core principles of economics and monetary policy. It is a social experiment, designed to usurp the free-market and impose socialist engineering. Even when it fails its defenders claim that it is not Keynesian theology which is to blame, but some other evil. This is surreal and mistaken. At some point one can only hope that the entire corpus of Keynesian liturgy is jettisoned for economic reality. A gold standard would be a good start. The political obstructions to sound fiscal and monetary policy are however, almost impossible to overcome without a general economic calamity to stimulate needed reform. Such is the legacy of the homosexual, tweed wearing Brit, who tried to wear down Churchill with his effusive propaganda as to the merits of centralization.  

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