Monday, September 05, 2011

A cool rap - updated

A cool rap that tries to cover the difference between Keynseian intervention and Hayek's faith in markets.

The pity is that while it neatly outlines some of the differences it doesn't really get to the real point; this isn't either/or, they are both right.

The Keynseian approach fell apart in practice because Governments got addicted to intervention, there was too much perpetual pump priming. The free market fell apart from an artificial goal of keeping interest rates too low, creating Hayek's (and Minsky's) debt problem.

Update: Many thanks to reader Tim for alerting me to this piece from The Guardian that makes much the same point about the error in configuring the issues as a dichotomy between Keynesian and non-Keynesian views.

Interesting to note the emphasis on the "international" solutions. That is the case but there are a few European countries that haven't got a clue how to save themselves from their aging population and pension problems. Just how much we have to be thankful to the Hawke-Keating Government is really not realised. In this case it is what was achieved for national saving through compulsory superannuation.

Novae Meridianae Demetae Dexter delenda est

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