In a recent review of a book by David Stockman, Laurence Siegel, the uber-respected director of research at the Research Foundation of CFA [Certified Financial Analysts] Institute in Charlottesville, Va, had this to say about the Keynesian policies that currently guide world governments:
“It is hard to overstate the extent to which the following Keynesian views are simply assumed by people to be correct:
In Congressional testimony last week, Fed Chairman Ben Bernanke slipped something in that no one much noticed. He said that the Fed might eventually choose to exit from its current monetary expansion binge, not by selling US government securities, but by letting them mature.
As the world’s central banks keeping merrily “printing” new currency, it is hard to know how much the money supply is growing. It is especially hard to keep up with it because you have to know how to define the money supply, much less estimate changes to it.
President Obama’s proposal to raise the federal minimum wage from $7.25 to $9.00 will play well to his union supporters. But consider the background.
Chrysler wrote a letter during the fall presidential election denying plans to make jeeps in China. The Romney ad that claimed as much was then branded a lie.
For a quarter century now the Japanese government has been printing new money and borrowing and spending in true Keynesian style, in a so far futile effort to reboot the economy following the burst bubble of the 1980′s. This hasn’t been pure Keynesianism because the government has also been raising taxes sharply along the way in every way it can.
“Basel Becomes Babel as Conflicting Rules Undermine Safety” says a Bloomberg headline. This refers to international banking rules being worked out in Basel, Switzerland.
A new Bloomberg View (editorial) tells us that lack of fiscal stimulus (more government borrowing to spend) “is plainly holding back growth in the US, the European Union and Japan.”
