Could Keynes and Paul Krugman Be Wrong?

Germany, the incarnation of austerity, which achieves a budget surplus year after year, is still growing apace….

Even Spain and Portugal, initially in situations similar to that in Greece, are once more getting back on their feet after five years of anti-Keynesian, pro-cyclical austerity policy. To say nothing of Ireland, which is now providing the best example of how to reinvent its economic miracle through cuts.

Greece, under the Tsipras/Varoufakis tandem, is the only country to hold firmly to the Keynesian dogma of overcoming crises through public spending. Failing an unexpected turnaround on the part of these two clowns, we may soon see just how successful this policy of pure Keynesianism is. We’re now witnessing the biggest historical defeat of Keynesian thought.

Source: Drieu Godefridi, La Libre Belgique, April 1


4 responses to “Could Keynes and Paul Krugman Be Wrong?

  1. Elisabeth Ecker

    It is all depends on the detail. If you look closer you will find that austerity makes the wealth trickle up and in stimulus the wealth trickles down. It all depends on the level of unemployment and who pays taxes and how much.

  2. I have come to expect rational, reasoned comment in Sketches. This item fails. The author might be right in his statement, but his language (for example describing the Greek elected leaders as `clowns’) tells me he can’t be trusted to give a completely accurate picture.
    Using German’s economic power to `prove’ that Keynes’ formula does not work is flawed. Germany, by dint of its position at the centre of Europe and with an industrious, highly motivated and educated population was always going to be among the top international success stories.
    That’s a given whatever economic route it takes. For instance, an earlier Germany was also a world leader – only then the position was achieved as a result of massive government investment.
    I feel the vast majority of people are better off when government’s more evenly share the wealth.
    The very rich will still be very rich, just not stupendously rich, while the very poor and the middle ground will be better off with a degree of government intervention.
    In the past, failure to acknowledge this has caused widespread misery and an eventual redistribution through the guillotine and the gulag.

  3. Echoing Michael, there is no real economic analysis in this post.

  4. While Greece’s current predicament – having to make a trade-off between
    ‘austerity’ and ‘public spending’ – is country-specific, its long-term fiscal policy objective is (or should be) to lessen its reliance on external debt-financing. The added geopolitical and ‘free trade’ considerations, as George Friedman of Stratfor (April 21) points out, make the calculus ‘wickedly’ complicated.