The Keynesian School of Economics Leads to Violence

By Jeff Carter, Columnist for Townhall

John Maynard Keynes Русский: Джон Мейнард Кейн...
John Maynard Keynes

We are seeing the end game played out over and over in different cultures all over the world. There is one thread of similarity. All of them have practiced Keynesian economics for decades. The belief that more government spending and bigger government to solve society ills has degenerated into a stagnant economy with no growth and in many parts of the world it’s unsafe to walk down the street.

Riots have taken place in “civilized” first world countries. Spain, Italy, Greece, even France and England. Unemployment in some of them is over 20%, and for younger people that have never been hired it can be significantly higher. Even in America, we have seen mini-riots with the Occupy Wall Street crowd and in places like Wisconsin and Ohio that have tried to undo years of bad economic policy. The Arab spring was caused more by economics than it was anything else. An educated populace had no place to work, and no underlying economy to create jobs.

If you don’t understand the technical differences between the Keynesians and the Classical economic principles, you surely have heard iconic words and seen them practiced. You just didn’t realize it. “Prime the pump”, “government stimulus”, “government investment” are typical phrases used to easily translate Keynesian policies. This is just government allocating its resources to different projects. Governments cannot invest. They are not bound by the same constraints as private business.

Classical economics principles rely on the private sector to jumpstart and drive economic growth. Instead of spending money to prime the pump, they adjust tax policy and regulatory policy to change the incentives in the broader economy. Businesses, and people respond to those incentives. Because classical economists see most government spending as relatively useless, they are called “heartless”. The fresh water economists would slash government spending. Since most government spending is on social welfare, the politicians and bureaucracies that benefit from that spending go on a vicious attack.

The problem is that eventually the socialist/Keynesian school runs out of other people’s money to spend. They can’t raise taxes high enough, and the market forces them to pay ever higher interest rates to access public markets. When governments increase spending, businesses cut back. The net present value tables always catch up to them.

At this point in the cycle, they generally have created a situation where there are haves and have nots. Forced to cut spending on the people that receive a government check, those people riot. In Rome, Italy the streets are becoming unsafe.

The killings were “an offence to the Eternal City” and risked turning the Italian capital into “an immense favela where shoot-outs happen as they did in the Wild West,” said La Stampa, one of the country’s most respected daily newspapers. “In one year, Rome seems to have spun out of control.” The violence has spread from the graffiti-clad sink estates on the outskirts of the city to the tourist-friendly piazzas and cobbled streets of the centre. Last year there were two murders and seven kneecappings in Prati, one of the city’s most upmarket areas, lying not far from the Vatican.

Many of the killings have been well organised hits carried out in broad daylight, with few of the culprits caught, spreading fear and trepidation among the city’s nearly four million inhabitants

There doesn’t seem to be a transitional period for this base human behavior to occur. One day things are fine, the next you fear for your life.

When Keynesian economics are practiced, poverty and lower standards of living take hold. I have spoken with college students that spent time in Spain. Every evening people would be scouring city dumpsters looking for morsels to eat. When Oprah visited middle class people in BelgiumDenmark she asked, “Where’s all your stuff?”. The answer is they don’t have any stuff. They can’t afford it.

When governments ramp up their debt loads and ramp up the amount they spend on government programs, there is only one outcome. Eventually the merry go round stops. People get off and look at each other. Some have enjoyed the ride. They either built a business and got rich, or they used crony capitalism to insulate themselves and are well off. The rest of the poor saps are stuck with nothing. They have to survive, so basic human survival instincts take over.

That is the danger of accumulating so much debt. We are starting to see it played out in various economies throughout the world. Unless America changes it’s ways, or we get a huge upsurge in economic growth that will placate the debt for the short run, we are on the same miserable trail to nowhere.



Jeff  Carter

Jeff  Carter

Jeffrey Carter is an independent speculator. He has been trading since 1988. His blog site, Points and Figures was named by Minyanville as one of The 20 Most Influential Blogs in Financial Media.

My name is @BoschFawstin and I’m a recovering Muslim

via Creeping Sharia

My name is Bosch and I’m a recovering Muslim.

That is, if Muslims don’t kill me for leaving Islam, which it requires them to do. That’s just one of the reasons I’ve been writing and drawing against Islam and its Jihad for a number of years now. But fortunately for us, Islam hasn’t been able to make every Muslim its slave, just as Nazism wasn’t able to turn every German into a Nazi. So there is Islam and there are Muslims. Muslims who take Islam seriously are at war with us and Muslims who don’t aren’t.

But that doesn’t mean we should consider these reluctant Muslims allies against Jihad. I’ve been around Muslims my entire life and most of them truly don’t care about Islam. The problem I have with many of these essentially non-Muslim Muslims, especially in the middle of this war being waged on us by their more consistent co-religionists, is that they give the enemy cover. They force us to play a game of Muslim Roulette since we can’t tell which Muslim is going to blow himself up until he does. And their indifference about the evil being committed in the name of their religion is a big reason why their reputation is where it is.

So while I understand that most Muslims are not at war with us, they’ve proven in their silence and inaction against jihad that they’re not on our side either, and there’s nothing we can say or do to change that. We just have to finally accept it and stop expecting them to come around, while doing our best to kill those who are trying to kill us.

Another problem with Muslims who aren’t very Muslim is that they lead some among us to conclude that they must be practicing a more enlightened form of Islam. They’re not. They’re “practicing” life in non-Muslim countries, where they are free to live as they choose. But their “Islam” is not the Islam. There’s no separate ideology apart from Islam that’s being practiced by these Muslims in name only, there’s no such thing as “Western Islam”.

Non-observant Muslims are not our problem, but neither are they the solution to our problem. Our problem is Islam and its most consistent practitioners. There is nothing in Islam that stays the hand of Muslims who want to kill non-Muslims. If an individual Muslim is personally peaceful, it’s not because of Islam, it’s because of his individual choice, which is why I often say that your average Muslim is morally superior to Mohammad, to their own religion. The very rare Muslim who helps us against Jihad is acting against his religion, but that doesn’t stop some among us from thinking that his existence somehow means that he represents more than himself.

The only reason we’re talking about Islam is because it doesn’t mean peace. Islam wasn’t hijacked by a “small minority of extremists” on 9/11, it was hijacked by a very small minority of moderates whose embarrassment in being associated with such an immoderate religion leads them to engage in moderate truth telling about it, proving their irrelevance as allies.

In addition to these politically active moderates, when you see well-assimilated Muslims in the West, you’re not seeing Islam in action, you’re seeing individuals living up to the old adage, when in Rome, do as the Romans do. They’re essentially post-Islamic Muslims who have rejected Islamic values and have embraced Western ones. But since the process of their assimilation was implicit – as it happened naturally by their exposure to Western, i.e., pro-life, values – both Muslims and non-Muslims alike prefer to generously give Islam some credit for it. But a good Muslim, by our standards is a bad Muslim by Islamic standards. Objectively good human beings, who identify themselves as Muslim, give Islam a good face, one far better then it deserves. This only gives us a false impression about what it is we’re facing, with just another excuse not to face it. And this leads to our acceptance into our culture of stealth jihadists who have figured out how to say what we want to hear, while they scheme behind the scenes to further Islamize the West.