Thursday, 11 December 2008

Crass Keynesianism

“Our British friends are now cutting their value-added tax. We have no idea how much of that stores will pass on to customers. Are you really going to buy a DVD player because it now costs £39.10 instead of £39.90? All this will do is raise Britain’s debt to a level that will take a whole generation to work off.

The same people who would never touch deficit spending are now tossing around billions. The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking. When I ask about the origins of the crisis, economists I respect tell me it is the credit-financed growth of recent years and decades. Isn’t this the same mistake everyone is suddenly making again, under all the public pressure?”

Peer Steinbrück, German finance minister

Do you think we could persuade Mr. Steinbrück to come over here and take over as Chancellor?


zed said...

he is the guy that attacked the US financial system on a monday and bailed out a german bank on a tuesday.

JKA on Economics UK said...

Not if this is a sample of his arithmetic, thanks.

K T Cat said...

I don't know why he's getting worried about the next generation now. They were screwed long before he got to work last week.

Will Dean said...

JKA? If he'd said 39.05 would you be happier?

Nick von Mises said...

Almost makes me feel guilty about 1945 and 5-1 in Munich

JKA on Economics UK said...

Hi Will,
Yeah I think for a Finance Minister, this is very disappointing.

RenterGirl said...

That's a pot calling a kettle black, if ever there was one. Let's start at a beginning. Didn't the tories start the whole banking deregulation fiasco? Hasn't it taken such a hold on the economic ethos to the extent that any party would never get elected without restating that what's good for the market is good for the country? Even in Germany? Who closed down manufacturing in a quest to crush the unions? Because I've little time for the man, but it wasn't Super Gordon, was it? Everybody's floundering. What would Cameron do? The same. But different.

Nick von Mises said...

Don't go blaming Thatcher. Seriously. These clowns have been in power for 11 years now.

AndyD said...

Nick -

But it is true that economically, New Labour has basically aped tory policy as far as deregulation of the financial sector goes.

Perhaps an even worse meme is the whole terror of inflation and, shock horror, real terms wage rises.