Tuesday open thread: The return of John Maynard Keynes

Yesterday, Joe Biden had a conference call with reporters, where he outlined his economic plan for the country once he wins election. Jennifer Rubin of the Washington Post, who was on the call, wrote about it. Do read it, as JRubes continues to astound, with the scales falling from her eyes.

But what I want to write about is this: 

Ranging over his economic vision, Biden made clear he thinks there is an “understanding there’s only certain things big things that government can do that the private sector by itself can’t do.” Eisenhower’s interstate highway project, for example, today would be labeled “industrial policy.” Biden obviously understands we have neglected our public sector. He emphasized “We’re not talking about winners and losers. We’re talking about creating strong stable sources of growth and the power of a new generation of innovators. . . . We’ve always been able to solve big problems,” He added, “I don’t think anybody thinks we can stand by and assume the private sector is going to take care of global warming."

Well, good and dear friends, this is nothing other than the return of Keynesian economics.

For the tl;dr crowd, these are the quick takeaways from John Maynard Keynes's ideas:

• Keynesian Economics focuses on using active government policy to manage aggregate demand in order to address or prevent economic recessions.
• Keynes developed his theories in response to the Great Depression, and was highly critical of classical economic arguments that natural economic forces and incentives would be sufficient to help the economy recover.
• Activist fiscal and monetary policy are the primary tools recommended by Keynesian economists to manage the economy and fight unemployment.

Keynes's ideas were the dominant economic theory until the unraveling of the Western liberal economic order beginning with the oil shock of the 1970s. Once supply-siders influenced by the Chicago School gained power under Ronald Reagan in the US and Margaret Thatcher in the UK, Keynesian economics were shunted to the side in the West. However, if you look at China, Keynes, not Marx or Mao, is their guiding guru, as the Chinese government invested heavily in remaking an agrarian society into the second largest economy in the world.

Rather than allowing the pure market to work—which, as we've seen, is a lie even under Milton Friedman's ideas, with corporate bailouts—Keynesian economics sees a major and necessary role for an activist government. Capitalism, left unchecked, will destroy its host. Franklin D. Roosevelt saved capitalism from a socialist revolution by taming it, and making it an engine of what would become the greatest prosperity seen in human history. More can be done, as too many of our communities, of all races and ethnicities, are left behind. But depending on the tender mercies of our oligarchic overlords has proven a chimera. Vice President Biden is now committed to returning to what made the United States an economic powerhouse. While the loony Left brays about socialism, and the loony Right talks about "muh freedom", those of us from the moderate left to the moderate right will focus on creating an economy which works for everyone. And that, perforce, means an activist government.

Joe is right: We're at an inflection point, and this moment presents too good an opportunity to pass up and remake the very fabric of our economy. The people of this country clamor for investments which have been put off for far too long because guns were favored over butter. The crux of Keynes's ideas is that investing in butter creates even more wealth. Couple that with environmentally sound spending, and the US may just be able to again shunt China to the side, retaking the leadership so callously squandered by the current occupant of the White House.

As a former vice president once told his boss: This is a big fucking deal.

Fund drive

Well, since this is a feel-good post, it's time for another fund drive! If you feel so inclined, Trevor and I would appreciate it ever so much if you could show that appreciation via the donation of filthy lucre here. 

However, we know times are tough. If you can't, that's totes cool. Just spread the news of this space far and wide on your various social media outlets.

Orale pues!