I think Richard is some kind of natural contrarian. (I know because I am one myself.) He's spent so much time on RW social media he begins to think the whole world is RW social media, so now his contrariness kicks in and next thing you know he's sounding like a teabagged David Brooks to "own the RW". I don't think he's stupid, he's just reacting to what he sees online and feels compelled to countersignal. If X suddenly became the Twitter of 2020 then Richard would get based again.
That said, I don't trust people that have been redpilled but then find their way back to liberalism. I don't know how that is possible unless they've been given donor bucks, which is possible with Richard.
I don't think you need much more explanation for Hanania than that racism and antisemitism was how you trolled back in 2010s and saying neoliberal globalism has no competition, Fukuyama was right, etc, is how you troll in 2025.
Im confused at tom calling neoliberals leftist, if anything it’s rightoid movement now at days at least. For shits sake I’ll stomach that , the problem is Tom addressed the failures then gave a rather off base response. “nationalism” isn’t a real economic alternative. Unless you confront the rent extraction system, private control of credit, land, and debt, you’re just shifting the flag over the same extraction machine. The issue isn’t global vs. national, it’s productive vs. parasitic. Real reform means de-financializing housing, banking, and public goods, not relabeling them.
This is like when people say “bitcoin fixes this” and I’m like wait , what?! People are still too broke to even buy in general…so you are still endanger from frothy poors at end game
The far right always loves to claim that there’s a distinction between “real” and “fake” industries (whatever is more BASED). Finance and energy production is less BASED than working at an asbestos factory in the English Midlands, because the latter is more traditional or something. The fact of the matter is that most OECD countries have been experiencing steady deindustrialization since the 1950’s, long preceding the evil “globalism” that the far left/right decry of the 80’s and 90’s. Even middle income countries such as China and Brazil are facing rapid deindustrialization. The fact that people can make money from laptops rather than slaving in lead factories for 80 hours a week is a good thing.
I once owned a British car made in 1980; I learned all I needed to know about their broken system. That so much of their economy now relies on financial products is terrifying, when considering their foreign policy ambitions to economically strip mine Russia.
And I am convinced Hanania is a paid shill for those interests.
I don't think it's a good idea to simply dismiss the example of Hong Kong out of hand, as it does seem to demonstrate the success of an economy that had no industrial policy or protectionism whatsoever.
I love how any critique of neo-liberalism elicits a torrential response from Austrian and libertarian economic wonks. So many words, so much misinformation and gaslighting..
June 2021, Krugman wrote an article in the New York Times titled “The Week Inflation Panic Died.” Here are some key excerpts, with my bold added, and keep in mind that when Krugman wrote this, the most recent Consumer Price Index (CPI) inflation rate was only 4.9 percent:
Remember when everyone was panicking about inflation, warning ominously about 1970s-type stagflation? OK, many people are still saying such things, some because that’s what they always say, some because that’s what they say when there’s a Democratic president….
But for those paying closer attention to the flow of new information, inflation panic is, you know, so last week.
Seriously, both recent data and recent statements from the Federal Reserve have, well, deflated the case for a sustained outbreak of inflation … [T]o panic over inflation, you had to believe either that the Fed’s model of how inflation works is all wrong or that the Fed would lack the political courage to cool off the economy if it were to become dangerously overheated.
Both beliefs have now lost most of whatever credibility they may have had….
The Fed has been arguing that recent price rises are similarly transitory … The Fed’s view has been that this episode, like the inflation blip of 2010–11, will soon be over.
And it’s now looking as if the Fed was right ...
…. Monetary doomsayers have been wrong again and again since the early 1980s, when Milton Friedman kept predicting an inflation resurgence that never arrived. Why the eagerness to party like it’s 1979?
To be fair, government support for the economy is much stronger now than it was during the Obama years, so it makes more sense to worry about inflation this time around. But the vehemence of the inflation rhetoric has been wildly disproportionate to the actual risks—and those risks now seem even smaller than they did a few weeks ago.
Of course, Krugman’s confident dismissal of those Biden-hating doomsayers blew up in his face, as CPI inflation kept ratcheting higher and higher. In a December 2021 NYT column, Krugman threw in the towel and admitted he had been wrong, but in his own special way (again, with my bolding):
The current bout of inflation came on suddenly…. Even once the inflation numbers shot up, many economists—myself included—argued that the surge was likely to prove transitory. But at the very least it’s now clear that “transitory” inflation will last longer than most of us on that team expected….
… I believe that what we’re seeing mainly reflects the inherent dislocations from the pandemic, rather than, say, excessive government spending. I also believe that inflation will subside over the course of the next year and that we shouldn’t take any drastic action. But reasonable economists disagree, and they could be right….
The latest projections from board members and Fed presidents are for the interest rate the Fed controls to rise next year, but by less than one percentage point, and for the unemployment rate to keep falling.
Perhaps surprisingly, my own position on policy substance isn’t all that different from either Furman’s or the Fed’s. I think inflation is mainly bottlenecks and other transitory factors and will come down, but I’m not certain, and I am definitely open to the possibility that the Fed should raise rates, possibly before the middle of next year….
Maybe the real takeaway here should be how little we know about where we are in this strange economic episode. Economists like me who didn’t expect much inflation were wrong, but economists who did predict inflation were arguably right for the wrong reasons, and nobody really knows what’s coming.
For those keeping score at home, remember that when I pointed out that Keynesians Christina Romer and Jared Bernstein had been notoriously wrong in their forecasts of unemployment following the Obama stimulus package, Krugman told us that “some predictions matter more than others.” So this time around, Krugman can’t argue that his botched inflation predictions are irrelevant. Instead, as we see above, he’s claiming that his opponents were right but for the wrong reasons. Even when Krugman is wrong, he’s still better than his enemies!
if Say’s Law is true, then Keynes’s entire system is wrong. Keynes knew this, so he took upon himself the task of refuting Say’s Law as the very first thing in his General Theory. Keynes’s argument was that Say’s Law is only valid under the conditions of full employment, but that it does not hold when there are unemployed resources; in that case we are in the Keynesian Zone where the laws of economics are turned upside down.
But, as Stephen Kates explains in his book Say’s Law and the Keynesian Revolution (subtitled How Economics Lost its Way), Keynes failed in his attempt to overturn Say’s Law. Kates shows beyond any dispute that Say and his fellow classical economists were well aware that there could be unemployed resources, and that Say’s Law was still valid in that case.
To summarize, there is no such thing as a general glut or a demand deficiency, we can have idle resources, and Say’s Law is still valid. So how did classical economists explain recessions? Producer error. Producers had produced the wrong mix of goods. James Mill in his essay “Commerce Defended” explains the meaning of producer error:
What indeed is meant by a commodity’s exceeding the market? Is it not that there is a portion of it for which there is nothing that can be had in exchange. But of those other things then the proportion is too small. A part of the means of production which had been applied to the preparation of this superabundant commodity should have been applied to the preparation of those other commodities till the balance between them had been established.
Kates and Gerard Jackson have argued that the classical economist had a theory of producer error much like the one later developed by Mises. Mises developed existing ideas and integrated Austrian capital theory and time preference theory to provide an explanation of why many producer errors occur at the same time. We know this as the Austrian theory of the business cycle.
Keynes’s General Theory was supposed to overcome capitalism and its internal mechanisms of caution and stability and replace it with an unabashed optimism and utopianism of a technocratic future where bureaucratic economists would chart the course of the economy and even be in charge of the wind that propelled its sails.
What Keynes failed to appreciate was that central banks were already in charge of the “world of money” and were already the cause of the “disturbances in the real economy.” Moreover, he seemed not to realize that governments were the cause of all the widespread destruction of WWI and the massive increase in the size of governments, spending, and debt. How anyone could fail to notice the connection between these events and post-WWI monetary and economic problems in the United Kingdom is beyond explanation.
But what of Keynes theories itself?
Well let's see
Keynes,” wrote Hutt “would be ashamed to hold, as the ‘[monetary] cranks’ in effect did, that merely to dole out additional money is the cure for unemployment. Yet are not the identical ideas in all their navieté at the root of Keynes’ teachings, obscured in a mass of impressive but conceptually unsatisfactory theoretical paraphernalia?”11 Even advocates concede that The General Theory is poorly written and difficult to understand. The necessity of burying the policy in deep layers of obscurity came about because inflation was considered a shameful thing. Unlike in our current time, it could not be advocated openly. Yet no matter how deeply hidden, Hutt surfaced the truth that inflation does poorly what the price system does well.
Keynes held bizarre beliefs, far stranger than the familiar underconsumptionist fallacy that the government needs to bolster insufficient aggregate demand. Though he wrote his most famous book about economic theory in the midst of the Great Depression, he thought that scarcity was no longer a problem. The potential for abundance was at hand, or soon would be; the real economic problem was to distribute this abundance so that selfish speculators would not take it all for themselves, leaving the masses in poverty.
This sounds unbelievable, but Keynes really did claim this. Summarizing Keynes’s position, Carter says,
Prior to The General Theory, economics was almost exclusively concerned with scarcity and efficiency. The very word for the productive output of society—economy—was a metaphor for making do with less. The root cause of human suffering was understood to be a shortage of resources to meet human needs…. This was the worldview of what Keynes called the “classical economists.”… But the sheer productive power of modern capitalism and the “miracle of compound interest” had rendered the portrait obsolete. Technological advances now allowed people to produce so much more with so much less effort than they had in the past that scarcity was no longer the overriding problem of humanity. (pp. 258–59)
What stands in the way of abundance for all? In essence, the problem is money. People hoard money because they fear an uncertain future, and if they hoard money, businessmen will be reluctant to invest. Attempts to cut costs by reducing wages exacerbate the problem, since this lessens consumers’ spending. The classical economists wrongly assumed that adjustments in relative prices suffice to take care of shortages and surpluses. “Say’s law” ensured that there could not be a “general glut” or depression. Keynes rejects Say’s law, arguing that it ignores the cumulative power of pessimistic expectations. It does not help matters that Keynes misstates the law: “For Keynes, the soft underbelly of the classical theory was Say’s Law, which he summarized as the maxim that ‘supply creates its own demand.’”
Let's talk about the god himself, the man we are of course supposed to follow with his bible of economics
What caused him to become a economist:-
Well he was a gutter trash investor
Keynes published his book, The General Theory of Employment, Interest, and Money, in 1936 and he died in 1946, leaving the world with the fully bastardized Bretton Woods gold system, an embedded view of technocratic socialism, and the new “macro” view of economics that fully dominates schooling, propaganda, and policy.
By eliminating the teaching of the history of economic thought, especially in graduate programs, the modern economist cannot really think of it in terms of anything else. The central bank, the Federal Reserve, and the Treasury Department manipulate the economy like puppets by pulling various strings. Everything else, including “microeconomics,” is viewed as just “specializations,” micro policy, or the main revenue source from teaching Principles at university.
Economists may genuflect to the “free market” as a necessary evil, but their real views are that the market has all sorts of imperfections and the market creates all sorts of evils in the world. In a real sense, this is a disingenuous perspective and flies totally in the face of historical facts. The very idea that the government could be largely done away with and not be used to diagnose, treat, or cure the economy would be seen as ludicrous and send most newly-minted PhDs into a mental meltdown.
Keynes the Investor
Keynes was the son of a professor and was trained in mathematics himself. He was a wonderkid, publishing famous books on probability, economics and politics, and was a big player in international affairs and an important architect in redesigning the world monetary order away from the gold standard.
In investing, Keynes has even been designated one of the first experts in institutional investing in directing large amounts of funds for institutional portfolios and endowments. Keynes was an “active” investor, and his investment philosophy changed over time through trial and error. Keynes expert, David Chambers, showed that Keynes’s experience as an investor was not “one of unqualified success,” noting that in his first decade failed to even match market returns and for a crucial “period of three years in the late 1920s, he actually was substantially behind the market.”
It appears that Keynes invested institutional money in small value stocks and that he tried to use his understanding of the business cycle to engage in market timing. Both of these approaches are now largely rejected by professional institutional investors and led Keynes to produce poor performances for his clients.
Timing the market and picking the winners from among small stocks takes genius and hard work, or a super large ego. In Keynes’ case, it was surely ego, rather than genius that was at work. He was an extremely self-confident individual.
After the stock market crashes and the Great Depression began, Keynes began work on his magnum opus book, The General Theory, and he thereafter hid under the investment philosophy of diversification and buy-and-hold strategies, which did not really help his investment returns in the late 1930s.
But notice the timing of all this: His investment philosophy failed both before 1929 and after 1929. The Great Depression hit in the early 1930s and Keynes began writing his most influential book, which was published in 1936.
The hallmark of the book, and what generally moves his entire economic model, is his assumption of “animal spirits,” telling investors and capitalists what to do next. According to Keynes expert Justyn Walsh:
Keynes would utilize the insights gained from his roller-coaster ride on the financial markets to develop a revolutionary theory that accounted for the booms and busts of modern economies. A central contention of Keynes’ radical thesis would be that financial markets were not always efficient, and that upheavals in the world of money could lead to disturbances in the real economy
Much of the le keqiang calculation were done in 2010s
Let's see of course what is the modern hi fi Keynes dream china is doing nowadays
China’s economy moved from a point approaching crisis to a modest cyclical recovery. But China’s economic data didn’t move. GDP growth was 6.4% year-on-year in Q4 2018. Then the economy posted 6.4% y/y GDP growth in Q1 2019, and only slowed to 6.2% in Q2 2019. Over the past sixteen quarters, China’s headline GDP has only varied by 0.8 percentage points in total, within the range of 6.2% and 7.0%.
If that sounds unusually smooth, it is. There is no other country that we could find that had a similarly stable record of economic performance over four years, as far back as we could find quarterly economic data, for the top 20 economies in the world
As the rhodium group wrote in broken abacus the structural and bullshit growth of its empty ponzi ipo in data were a problem in 2010s they are even larger in 2020s
China’s official GDP data showed the economy barely slowing to 3% growth in 2022 before recovering to an implausibly steady pace around 5% every year since, with growth even picking up slightly from that pace so far in 2025 (Figure 1).
The economic reality in China is far bleaker, given that the property sector has collapsed since 2021 and nothing has replaced it as a driver of growth. The zero-COVID restrictions severely limited economic activity in China in 2022 and the broader economy likely contracted that year. Since 2023, consumption growth has remained anemic, credit growth has slowed, and the economy has been struggling with persistent deflationary pressures in both producer and consumer prices. Weak domestic demand has turbocharged China’s trade surplus, as excess production in Chinese industry is sold abroad at lower prices.
Policymakers are reacting by supporting the economy as if they are responding to crisis conditions, by approving unusual mid-year fiscal policy adjustments, cutting interest rates, and approving new consumer subsidies. The central bank is engaged in quantitative easing to support an expansion of government bond issuance and the Politburo has called for “extraordinary” support for the economy
All of this while casually hitting 5% GDP growth year after year
Of course any keynesian loves thier state capitalist lapdog state as proof of their great system
Well let's take a good look at this system:-
The Chinese growth of course are good way to flaunt that we need to hurry up and start taking control of every thing there is before we lose everything to chinese and die.
Much like of course of the soviets who we were also going to die against if not for their illustrious growth(0.5% every year) stopping midway by its dissolution
Let's see what it is all about
Li Keqiang a chinese former premier explains to us
GDP figures are ‘man-made’ and therefore unreliable.” Consequently, he used proxy data to attempt to quantify the economy. Li’s approach relied on three key indicators: electricity consumption, railway cargo volume, and bank lending. His rationale was that if electricity usage was up, then the factories must be working. The same is true of rail cargo if the trains are busy taking products to distributors and seaports. Finally, the volume of bank lending suggests how many new factories or expansions of existing businesses are being undertaken.
In 2014, the Chinese government claimed a 7.5 percent GDP growth, but Citibank economists had their doubts. The bank decided to apply the Li Keqiang Index with these specific weightings: railway freight traffic (25 percent), electricity consumption (40 percent), and medium—and long-term loans (35 percent). Sure enough, the index suggested that the GDP growth was much lower than Beijing’s claims. Citibank then looked at other proxies, such as commodity prices. China alone accounts for such a significant percentage of world demand for commodities that increased industrial and construction activity in China drives up world prices. However, in 2014, those prices were coming down.
The Li Keqiang Index is a good jumping-off point, but Western economists have added other elements of consideration, such as nighttime lights measured by satellites. Nighttime lights have been used, at least informally, in the past. It is common, when describing the difference in wealth between North and South Korea, to mention the fact that North Korea is nearly dark at night while South Korea is brilliant. Other data used are “retail sales, floor-space construction newly started, real estate investment, air passenger traffic, and exports.” This data can be corroborated with data from outside of China, such as real Chinese imports as reported by exporting countries.
A University of Chicago paper found that growth claims by autocracies were on average 35 percent larger than growth estimated by nighttime lights. For China specifically, the official data is believed to have been off by about a third. Four economists conducting a forensic investigation of Chinese GDP claims found that Beijing had falsified the data by an average of 1.7 percentage points per year. Using 2008 as a base year, they determined that, by 2018, the Chinese GDP had been overstated by a cumulative 20 percent.
I think Richard is some kind of natural contrarian. (I know because I am one myself.) He's spent so much time on RW social media he begins to think the whole world is RW social media, so now his contrariness kicks in and next thing you know he's sounding like a teabagged David Brooks to "own the RW". I don't think he's stupid, he's just reacting to what he sees online and feels compelled to countersignal. If X suddenly became the Twitter of 2020 then Richard would get based again.
That said, I don't trust people that have been redpilled but then find their way back to liberalism. I don't know how that is possible unless they've been given donor bucks, which is possible with Richard.
I was born in Barking. Today it looks something between Karachi and Mogadishu.
This isn't progress.
More like Richard Banania
When you gonna do collab with Keith? Half Jew + Pure Celt = Total Banania Destruction
I don't think you need much more explanation for Hanania than that racism and antisemitism was how you trolled back in 2010s and saying neoliberal globalism has no competition, Fukuyama was right, etc, is how you troll in 2025.
He’s just got trollers remorse. Should be obvious from his fascination with “effective altruism”
Im confused at tom calling neoliberals leftist, if anything it’s rightoid movement now at days at least. For shits sake I’ll stomach that , the problem is Tom addressed the failures then gave a rather off base response. “nationalism” isn’t a real economic alternative. Unless you confront the rent extraction system, private control of credit, land, and debt, you’re just shifting the flag over the same extraction machine. The issue isn’t global vs. national, it’s productive vs. parasitic. Real reform means de-financializing housing, banking, and public goods, not relabeling them.
This is like when people say “bitcoin fixes this” and I’m like wait , what?! People are still too broke to even buy in general…so you are still endanger from frothy poors at end game
Hananferatu is repellent.
The far right always loves to claim that there’s a distinction between “real” and “fake” industries (whatever is more BASED). Finance and energy production is less BASED than working at an asbestos factory in the English Midlands, because the latter is more traditional or something. The fact of the matter is that most OECD countries have been experiencing steady deindustrialization since the 1950’s, long preceding the evil “globalism” that the far left/right decry of the 80’s and 90’s. Even middle income countries such as China and Brazil are facing rapid deindustrialization. The fact that people can make money from laptops rather than slaving in lead factories for 80 hours a week is a good thing.
I once owned a British car made in 1980; I learned all I needed to know about their broken system. That so much of their economy now relies on financial products is terrifying, when considering their foreign policy ambitions to economically strip mine Russia.
And I am convinced Hanania is a paid shill for those interests.
I don't think it's a good idea to simply dismiss the example of Hong Kong out of hand, as it does seem to demonstrate the success of an economy that had no industrial policy or protectionism whatsoever.
Hong Kong used to be 35% of the Chinese economy when China took control. Now, it's barely 3%. China keeps it, but they really don't need it.
I love how any critique of neo-liberalism elicits a torrential response from Austrian and libertarian economic wonks. So many words, so much misinformation and gaslighting..
Alisa Rosenbaum has much to answer for.
In any case, an excellent article, Keith.
PART9
Keynes overall impact on today
June 2021, Krugman wrote an article in the New York Times titled “The Week Inflation Panic Died.” Here are some key excerpts, with my bold added, and keep in mind that when Krugman wrote this, the most recent Consumer Price Index (CPI) inflation rate was only 4.9 percent:
Remember when everyone was panicking about inflation, warning ominously about 1970s-type stagflation? OK, many people are still saying such things, some because that’s what they always say, some because that’s what they say when there’s a Democratic president….
But for those paying closer attention to the flow of new information, inflation panic is, you know, so last week.
Seriously, both recent data and recent statements from the Federal Reserve have, well, deflated the case for a sustained outbreak of inflation … [T]o panic over inflation, you had to believe either that the Fed’s model of how inflation works is all wrong or that the Fed would lack the political courage to cool off the economy if it were to become dangerously overheated.
Both beliefs have now lost most of whatever credibility they may have had….
The Fed has been arguing that recent price rises are similarly transitory … The Fed’s view has been that this episode, like the inflation blip of 2010–11, will soon be over.
And it’s now looking as if the Fed was right ...
…. Monetary doomsayers have been wrong again and again since the early 1980s, when Milton Friedman kept predicting an inflation resurgence that never arrived. Why the eagerness to party like it’s 1979?
To be fair, government support for the economy is much stronger now than it was during the Obama years, so it makes more sense to worry about inflation this time around. But the vehemence of the inflation rhetoric has been wildly disproportionate to the actual risks—and those risks now seem even smaller than they did a few weeks ago.
Of course, Krugman’s confident dismissal of those Biden-hating doomsayers blew up in his face, as CPI inflation kept ratcheting higher and higher. In a December 2021 NYT column, Krugman threw in the towel and admitted he had been wrong, but in his own special way (again, with my bolding):
The current bout of inflation came on suddenly…. Even once the inflation numbers shot up, many economists—myself included—argued that the surge was likely to prove transitory. But at the very least it’s now clear that “transitory” inflation will last longer than most of us on that team expected….
… I believe that what we’re seeing mainly reflects the inherent dislocations from the pandemic, rather than, say, excessive government spending. I also believe that inflation will subside over the course of the next year and that we shouldn’t take any drastic action. But reasonable economists disagree, and they could be right….
The latest projections from board members and Fed presidents are for the interest rate the Fed controls to rise next year, but by less than one percentage point, and for the unemployment rate to keep falling.
Perhaps surprisingly, my own position on policy substance isn’t all that different from either Furman’s or the Fed’s. I think inflation is mainly bottlenecks and other transitory factors and will come down, but I’m not certain, and I am definitely open to the possibility that the Fed should raise rates, possibly before the middle of next year….
Maybe the real takeaway here should be how little we know about where we are in this strange economic episode. Economists like me who didn’t expect much inflation were wrong, but economists who did predict inflation were arguably right for the wrong reasons, and nobody really knows what’s coming.
For those keeping score at home, remember that when I pointed out that Keynesians Christina Romer and Jared Bernstein had been notoriously wrong in their forecasts of unemployment following the Obama stimulus package, Krugman told us that “some predictions matter more than others.” So this time around, Krugman can’t argue that his botched inflation predictions are irrelevant. Instead, as we see above, he’s claiming that his opponents were right but for the wrong reasons. Even when Krugman is wrong, he’s still better than his enemies!
PART 8
Keynes illiteracy
if Say’s Law is true, then Keynes’s entire system is wrong. Keynes knew this, so he took upon himself the task of refuting Say’s Law as the very first thing in his General Theory. Keynes’s argument was that Say’s Law is only valid under the conditions of full employment, but that it does not hold when there are unemployed resources; in that case we are in the Keynesian Zone where the laws of economics are turned upside down.
But, as Stephen Kates explains in his book Say’s Law and the Keynesian Revolution (subtitled How Economics Lost its Way), Keynes failed in his attempt to overturn Say’s Law. Kates shows beyond any dispute that Say and his fellow classical economists were well aware that there could be unemployed resources, and that Say’s Law was still valid in that case.
To summarize, there is no such thing as a general glut or a demand deficiency, we can have idle resources, and Say’s Law is still valid. So how did classical economists explain recessions? Producer error. Producers had produced the wrong mix of goods. James Mill in his essay “Commerce Defended” explains the meaning of producer error:
What indeed is meant by a commodity’s exceeding the market? Is it not that there is a portion of it for which there is nothing that can be had in exchange. But of those other things then the proportion is too small. A part of the means of production which had been applied to the preparation of this superabundant commodity should have been applied to the preparation of those other commodities till the balance between them had been established.
Kates and Gerard Jackson have argued that the classical economist had a theory of producer error much like the one later developed by Mises. Mises developed existing ideas and integrated Austrian capital theory and time preference theory to provide an explanation of why many producer errors occur at the same time. We know this as the Austrian theory of the business cycle.
PART 7
What Keynes learned from his botched investments
Keynes’s General Theory was supposed to overcome capitalism and its internal mechanisms of caution and stability and replace it with an unabashed optimism and utopianism of a technocratic future where bureaucratic economists would chart the course of the economy and even be in charge of the wind that propelled its sails.
What Keynes failed to appreciate was that central banks were already in charge of the “world of money” and were already the cause of the “disturbances in the real economy.” Moreover, he seemed not to realize that governments were the cause of all the widespread destruction of WWI and the massive increase in the size of governments, spending, and debt. How anyone could fail to notice the connection between these events and post-WWI monetary and economic problems in the United Kingdom is beyond explanation.
But what of Keynes theories itself?
Well let's see
Keynes,” wrote Hutt “would be ashamed to hold, as the ‘[monetary] cranks’ in effect did, that merely to dole out additional money is the cure for unemployment. Yet are not the identical ideas in all their navieté at the root of Keynes’ teachings, obscured in a mass of impressive but conceptually unsatisfactory theoretical paraphernalia?”11 Even advocates concede that The General Theory is poorly written and difficult to understand. The necessity of burying the policy in deep layers of obscurity came about because inflation was considered a shameful thing. Unlike in our current time, it could not be advocated openly. Yet no matter how deeply hidden, Hutt surfaced the truth that inflation does poorly what the price system does well.
Keynes held bizarre beliefs, far stranger than the familiar underconsumptionist fallacy that the government needs to bolster insufficient aggregate demand. Though he wrote his most famous book about economic theory in the midst of the Great Depression, he thought that scarcity was no longer a problem. The potential for abundance was at hand, or soon would be; the real economic problem was to distribute this abundance so that selfish speculators would not take it all for themselves, leaving the masses in poverty.
This sounds unbelievable, but Keynes really did claim this. Summarizing Keynes’s position, Carter says,
Prior to The General Theory, economics was almost exclusively concerned with scarcity and efficiency. The very word for the productive output of society—economy—was a metaphor for making do with less. The root cause of human suffering was understood to be a shortage of resources to meet human needs…. This was the worldview of what Keynes called the “classical economists.”… But the sheer productive power of modern capitalism and the “miracle of compound interest” had rendered the portrait obsolete. Technological advances now allowed people to produce so much more with so much less effort than they had in the past that scarcity was no longer the overriding problem of humanity. (pp. 258–59)
What stands in the way of abundance for all? In essence, the problem is money. People hoard money because they fear an uncertain future, and if they hoard money, businessmen will be reluctant to invest. Attempts to cut costs by reducing wages exacerbate the problem, since this lessens consumers’ spending. The classical economists wrongly assumed that adjustments in relative prices suffice to take care of shortages and surpluses. “Say’s law” ensured that there could not be a “general glut” or depression. Keynes rejects Say’s law, arguing that it ignores the cumulative power of pessimistic expectations. It does not help matters that Keynes misstates the law: “For Keynes, the soft underbelly of the classical theory was Say’s Law, which he summarized as the maxim that ‘supply creates its own demand.’”
Part 6
About Keynes himself
Let's talk about the god himself, the man we are of course supposed to follow with his bible of economics
What caused him to become a economist:-
Well he was a gutter trash investor
Keynes published his book, The General Theory of Employment, Interest, and Money, in 1936 and he died in 1946, leaving the world with the fully bastardized Bretton Woods gold system, an embedded view of technocratic socialism, and the new “macro” view of economics that fully dominates schooling, propaganda, and policy.
By eliminating the teaching of the history of economic thought, especially in graduate programs, the modern economist cannot really think of it in terms of anything else. The central bank, the Federal Reserve, and the Treasury Department manipulate the economy like puppets by pulling various strings. Everything else, including “microeconomics,” is viewed as just “specializations,” micro policy, or the main revenue source from teaching Principles at university.
Economists may genuflect to the “free market” as a necessary evil, but their real views are that the market has all sorts of imperfections and the market creates all sorts of evils in the world. In a real sense, this is a disingenuous perspective and flies totally in the face of historical facts. The very idea that the government could be largely done away with and not be used to diagnose, treat, or cure the economy would be seen as ludicrous and send most newly-minted PhDs into a mental meltdown.
Keynes the Investor
Keynes was the son of a professor and was trained in mathematics himself. He was a wonderkid, publishing famous books on probability, economics and politics, and was a big player in international affairs and an important architect in redesigning the world monetary order away from the gold standard.
In investing, Keynes has even been designated one of the first experts in institutional investing in directing large amounts of funds for institutional portfolios and endowments. Keynes was an “active” investor, and his investment philosophy changed over time through trial and error. Keynes expert, David Chambers, showed that Keynes’s experience as an investor was not “one of unqualified success,” noting that in his first decade failed to even match market returns and for a crucial “period of three years in the late 1920s, he actually was substantially behind the market.”
It appears that Keynes invested institutional money in small value stocks and that he tried to use his understanding of the business cycle to engage in market timing. Both of these approaches are now largely rejected by professional institutional investors and led Keynes to produce poor performances for his clients.
Timing the market and picking the winners from among small stocks takes genius and hard work, or a super large ego. In Keynes’ case, it was surely ego, rather than genius that was at work. He was an extremely self-confident individual.
After the stock market crashes and the Great Depression began, Keynes began work on his magnum opus book, The General Theory, and he thereafter hid under the investment philosophy of diversification and buy-and-hold strategies, which did not really help his investment returns in the late 1930s.
But notice the timing of all this: His investment philosophy failed both before 1929 and after 1929. The Great Depression hit in the early 1930s and Keynes began writing his most influential book, which was published in 1936.
The hallmark of the book, and what generally moves his entire economic model, is his assumption of “animal spirits,” telling investors and capitalists what to do next. According to Keynes expert Justyn Walsh:
Keynes would utilize the insights gained from his roller-coaster ride on the financial markets to develop a revolutionary theory that accounted for the booms and busts of modern economies. A central contention of Keynes’ radical thesis would be that financial markets were not always efficient, and that upheavals in the world of money could lead to disturbances in the real economy
PART 5
Chinese lie with soviet characteristics
Much of the le keqiang calculation were done in 2010s
Let's see of course what is the modern hi fi Keynes dream china is doing nowadays
China’s economy moved from a point approaching crisis to a modest cyclical recovery. But China’s economic data didn’t move. GDP growth was 6.4% year-on-year in Q4 2018. Then the economy posted 6.4% y/y GDP growth in Q1 2019, and only slowed to 6.2% in Q2 2019. Over the past sixteen quarters, China’s headline GDP has only varied by 0.8 percentage points in total, within the range of 6.2% and 7.0%.
If that sounds unusually smooth, it is. There is no other country that we could find that had a similarly stable record of economic performance over four years, as far back as we could find quarterly economic data, for the top 20 economies in the world
As the rhodium group wrote in broken abacus the structural and bullshit growth of its empty ponzi ipo in data were a problem in 2010s they are even larger in 2020s
China’s official GDP data showed the economy barely slowing to 3% growth in 2022 before recovering to an implausibly steady pace around 5% every year since, with growth even picking up slightly from that pace so far in 2025 (Figure 1).
The economic reality in China is far bleaker, given that the property sector has collapsed since 2021 and nothing has replaced it as a driver of growth. The zero-COVID restrictions severely limited economic activity in China in 2022 and the broader economy likely contracted that year. Since 2023, consumption growth has remained anemic, credit growth has slowed, and the economy has been struggling with persistent deflationary pressures in both producer and consumer prices. Weak domestic demand has turbocharged China’s trade surplus, as excess production in Chinese industry is sold abroad at lower prices.
Policymakers are reacting by supporting the economy as if they are responding to crisis conditions, by approving unusual mid-year fiscal policy adjustments, cutting interest rates, and approving new consumer subsidies. The central bank is engaged in quantitative easing to support an expansion of government bond issuance and the Politburo has called for “extraordinary” support for the economy
All of this while casually hitting 5% GDP growth year after year
PART 4
"The soviet growth with chinese characteristics."
Of course any keynesian loves thier state capitalist lapdog state as proof of their great system
Well let's take a good look at this system:-
The Chinese growth of course are good way to flaunt that we need to hurry up and start taking control of every thing there is before we lose everything to chinese and die.
Much like of course of the soviets who we were also going to die against if not for their illustrious growth(0.5% every year) stopping midway by its dissolution
Let's see what it is all about
Li Keqiang a chinese former premier explains to us
GDP figures are ‘man-made’ and therefore unreliable.” Consequently, he used proxy data to attempt to quantify the economy. Li’s approach relied on three key indicators: electricity consumption, railway cargo volume, and bank lending. His rationale was that if electricity usage was up, then the factories must be working. The same is true of rail cargo if the trains are busy taking products to distributors and seaports. Finally, the volume of bank lending suggests how many new factories or expansions of existing businesses are being undertaken.
In 2014, the Chinese government claimed a 7.5 percent GDP growth, but Citibank economists had their doubts. The bank decided to apply the Li Keqiang Index with these specific weightings: railway freight traffic (25 percent), electricity consumption (40 percent), and medium—and long-term loans (35 percent). Sure enough, the index suggested that the GDP growth was much lower than Beijing’s claims. Citibank then looked at other proxies, such as commodity prices. China alone accounts for such a significant percentage of world demand for commodities that increased industrial and construction activity in China drives up world prices. However, in 2014, those prices were coming down.
The Li Keqiang Index is a good jumping-off point, but Western economists have added other elements of consideration, such as nighttime lights measured by satellites. Nighttime lights have been used, at least informally, in the past. It is common, when describing the difference in wealth between North and South Korea, to mention the fact that North Korea is nearly dark at night while South Korea is brilliant. Other data used are “retail sales, floor-space construction newly started, real estate investment, air passenger traffic, and exports.” This data can be corroborated with data from outside of China, such as real Chinese imports as reported by exporting countries.
A University of Chicago paper found that growth claims by autocracies were on average 35 percent larger than growth estimated by nighttime lights. For China specifically, the official data is believed to have been off by about a third. Four economists conducting a forensic investigation of Chinese GDP claims found that Beijing had falsified the data by an average of 1.7 percentage points per year. Using 2008 as a base year, they determined that, by 2018, the Chinese GDP had been overstated by a cumulative 20 percent.