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    « Morning Joe 1/29/2013 -- Immigration and statist expansion | Main | Let our markets go »

    Morning Joe 1/28/2013 -- Keynesian pragmatism

    On Morning Joe today the crew started out talking about the 60 Minutes/Clinton/Obama interview. They discussed the political significance, and, although I tried, I couldn't care less why Obama and Clinton appeared together on the interview or why they clumsily acted like they have a special chemistry.

    What was interesting was that the interviewer didn't ask about Benghazi and didn't push back on Obama's implications that US interventions in Libya and Egypt have been positive interventions, while the administration's resistance to intervention in Syria and elsewhere have been smart decisions based on not shooting from the hip. Libya and Egypt are imploding, so the only way Obama can highlight these interventions as achievements is if he's so convinced of his own propaganda he thinks he can say anything and anyone will accept it.

    The other interesting part of the show was when Paul Krugman came on and discussed national debt and stimulus and entitlements and such. Krugman believes that government should spend much more money to create jobs, then worry about spending cuts when we have sustainable economic growth. Scarborough and Richard Haas stated they believe we have to spend more on job-creation short term but make long term plans to curb entitlement spending. In a way, Krugman is right from the statist point of view. Statists are pragmatic with economic matters -- they believe they can figure out short term strategies to deal with ups and downs in the economy because the US can create its own money, and the Fed can manipulate money. Scarborough is a statist, too, but he's more political than Krugman. Krugman goes straight to the pragmatic tampering, while Scarborough puts up a political front appearing to settle both problems --job creation/spending and long term debt reduction. The long term debt reduction carrot is used by politically sophisticated statists in order to get bi-partisan support for short term spending and monetary manipulation to give the impression that no one has to suffer from bad economic decisions and all recessions/depressions caused by previous government interventions can be remedied by more government interventions.

    Haas called it -- he said that the long term is here, we're broke and one crisis away from collapse. There's not much more to say, except read Keynes then read Mises then make up your mind who is right. Krugman is at least honest from a short term, pragmatic, statist viewpoint, but he's not acknowledging the decay to innovation and new discoveries caused by years of government interventions, thus the gradual deterioration that more government spending will not re-invigorate. But, if you're going to support the Keynesian, statist system, spend like there's no tomorrow, then pay it back when the economy is flowing. Sounds reasonable, right? The problem is that at this point there are not enough fools in the private sector to invest and expand based on government spending, no matter how much the government spends.

    One thing they didn't discuss was the accumulative affects of regulations over a period of decades that have now dampened innovation and new, revolutionary discoveries -- plus government interventions in education have created a failed system that doesn't prepare middle class and poor students for the global economy. There doesn't appear to be an end to regulations which crush the private sector as Obamacare and Dodd-Frank come on line, and Obama's second term allows him to go back to pushing EPA regulations. Unless we make major systemic changes, limit government power and allow a true free market, innovation and inventions and discoveries will grind to a halt. If we were freely producing energy, with all the brain talent and resources that would attract, new discoveries and innovations would likely blossom, thus creating real, sustainable economic growth and new, cleaner energy sources and production methods. Instead, business is flooded with government meddling and uncertainty regarding what the costs of doing business will be or how high the taxes will go to pay for a government bent on expanding its power and reach. 

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