« BACK  |  PRINT

RS

EDITOR OF REDSTATE

What You Won’t Be Hearing

“As you continue to watch the news coverage of the deteriorating economic climate, just remember that most of the premises that will be made and enunciated are that the government must do more, not less.”

In all of the discussions about our current economic state, a possible regression or double dip recession, out-of-control debts, and continued high unemployment there is one conversation those who frame the media, generate the news, and pass around their opinions as “objective” pontiffs and prognosticators of politics will never engage in.

I am of course talking about the failure of Keynesian economic policies.

Now, if Ronald Reagan were president or George Bush were president or any other Republican were president, or if the Republicans were able to get their legislative initiatives out of Congress, the headlines in the same economic climate would be “death of supply side economics.” In fact, we can see that in history.

After Republican losses in 1982, the television and newspaper pundits immediately following the election suggested that Reagan’s economic vision and voodoo economic policies had been rejected by the voters. In 1992, voters were still rejecting Republican economic policies. In 2006, suddenly voters were no longer conservative. 2008 confirmed for many in the media and Democrats that the nation had drifted to the left.

This does not happen when Democrats are defeated at the polls. When Jimmy Carter was defeated in 1980, it was because of economic malaise and the Iranian hostage crisis, not Jimmy Carter loving embrace of failed British economic policies. 1994 was about gays in the military and Bill Clinton’s inability to handle politics and policy concurrently. 2010 was because the Democrats got the message wrong and did not focus on jobs. They made the tragic, unfortunate, horrible mistake of socializing medicine before creating jobs.

It is, if you will, because the job is too big for one man, not because of the man’s policies. Never mind that the job is too big for only two men, Jimmy Carter and Barack Obama.

It is never because of the Democratic economic policies. It is never because Keynesian economics does not work. The only time economic policy does not work in the mind of the mainstream media is when voters punish Republicans at the polls. The reason for this is quite plain and quite simple.

Those people who form the news, shake the news, give voice to what’s happening as an objective commentator, and report on the daily happenings in the world tend to lean left. Consequently, they believe that in economic downturns the appropriate solution is for more government spending. These people believe that Herbert Hoover did nothing and that is what caused the great depression, never mind the massive spending Herbert Hoover implemented. These people believe the economic myths of the left and, many of them, have never worked in the free market.

This is why should you go on CNBC or the Fox Business Channel or read the Wall Street Journal or Investors Business Daily or encounter any media geared towards the free markets, you will find a healthy dose of skepticism toward Barack Obama and Keynesian economics. But should you read any other news publication or watch any other news channel or engage with those nightly talking heads on the big three networks, rarely will you encounter any sense of skepticism regarding the president’s economic policies. About the only thing you’ll find is a lament that the president is not doing more to create jobs as opposed to a recognition that the government has no idea how to create jobs.

All of this relates to the media’s worldview, which largely mirrors the Democrats’ worldview. It is a worldview premised on the idea that the more government does the better we all are. This worldview influences their coverage of the news, their coverage of Republicans in Washington, their skepticism of smaller and more limited government, and the idea that any bipartisan compromise no matter how terrible it is for the American people must definitionally be congratulated because it is a sign of good government when the parties come together.

As you continue to watch the news coverage of the deteriorating economic climate, just remember that most of the premises that will be made and enunciated are that the government must do more, not less. It will be coupled with a healthy believe that if only the government would spend more money more jobs would be created and the world would be a better place. This has nothing to do with reality and has never truly been shown to work. In fact, history shows Keynesian economics tends to lead countries into greater debt with less to show for it. Instead, the media and the Democrats should be embracing Milton Friedman and freeing up the American people to innovate, create jobs, and not be punished for being successful.

Keynesian economics does not work. Every few decades we must again bury the zombie that is John Maynard Keyes. Now is the time for us to do it again and instead invest our talents and time in resurrecting zombie Milton Friedman. Of course, should that happen, the next time the voters punish Republicans for doing something stupid and at odds with their limited government, less spending philosophy, the media will yet again begin its call that this is a rejection of Milton Friedman and free markets, in spite of all history and all evidence to the contrary, and that John Maynard Keyes be resurrected and put to work to destroy the American economy in the name of government creating jobs and a better future.

COMMENTS

  • sarg01

    Fat “civil service” union contract salaries and benefits aren’t stimulative.

    Upgrading a road to an Interstate is.

    No-bid pork-barrel earmarks aren’t stimulative.

    Shoveling money into corporate welfare, particularly government favored industries (think “green technologies”) isn’t stimulative.

    Housing subsidies are.

  • oldbird77

    I work in the subsidized housing market and I’m convinced that it’s really just welfare for landlords,

  • msctex

    . . .is that when they claim Free Markets have failed us, they are telling a lie based upon a lie they themselves promulgated, by pretending we were dealing with truly Free Markets to begin with. They have stood in the way since (at least) the early 20th Century, piously pointing to chinks in armor while shamelessly standing nearby holding a crowbar.

    A healthy and robust Free Market system can no more fail than gravity can fail.
    It is based upon laws, not theories. It is as healthy as its core components, but when those components are the potential of this nation if left the hell alone to function. . .I only hope we are allowed to see that day within my lifetime.

  • jollygiantsd

    I put together a chart showing the economic status and debts as well as which party has the majority at the time.
    http://x.co/XWdk (short link to photobucket image)

    This can be found with my accompanying blog entry:
    http://x.co/XWdw (short link to blogger blog).

    Essentially, every time Democrats have and keep the majority, the economy stagnates or falters. Yet every time the GOP has the majority, within a short time later when their policies take effect, the economy expands and on the verge of a surplus (like Regeanomic benefits were fully in effect and realized when Clinton took office, thus the surplus under him.).
    Of course the Dem majority in full cooperation of the Dem president took that surplus as a free ticket to spending which sent us on the long train to our current economic depression coupled with runaway inflation. We were able to slow and almost derail the runaway train in the early 2000s under the GOP but was put back on track to destruction in 2006.

  • glaucon

    The mainstream media can not blame Keynesianism because it is a means to their end: a society fully controlled and centrally planned by Big Sister. And how many of the companies and persons that fund the media derive their income from the government? They gravy train must expand, they can’t have it contract.

    The government produces nothing. The simple truth is that the economy can withstand a certain amount of gross domestic product being siphoned off via taxes for the government redistribution machine. At some point though, the private economy where wealth is actually created can no longer support the behemoth. The politicians and media pundits that keep calling for more government “stimulus” and spending will kill the golden goose of the private economy. But maybe that doesn’t matter to them, as that will leave us with an all-encompassing government, controlling and planning at every level. The fact that we will all be broke and in poverty is just a side-effect of their new society.

  • Death_of_the_Donkey

    Keynesian economics at its core is the idea that government can step in and smooth out the economy when credit problems arise. This leads to the idea that deficit spending during a downturn can alleviate some of the economic pain and help to “prime the pumps” for the next expansion. First, please remember that Keynes was always operating under the idea that government would run a balanced budget (or even small surplus) during expansions and that it would ONLY run these deficits during contractionary periods. That doesn’t describe anything like what we have today. Also, bear in mind that while Keynes offered suggestions to government spending, his general theory was that any deficit spending could accomplish the task (to different extents of course).

    In other words, Reagan ran huge Keynesian fiscal policy. George W. Bush ran huge Keynesian fiscal policy. Clinton and Bush I less so, but the problem is that they have all violated Keynes premise that the government would balance its books during good times and thus I believe that Keynesian stimulus is failing now not because the theory is wrong, but because the law of diminishing returns has lessened its impact after we have essentially been running Keynesian economic pump priming for the last 30 years non stop.

  • izoneguy

    Heh, that is what got us into this mess. Keynesian economics needs to be put to sleep. America needs to throw off the regulatory barriers that cause harm to free markets. America must push for REAL free markets. Not this quasi-socialist government meddling to “help”.

    You want to create jobs? You have to be competitive with the rest of the world.
    Let’s start by dis-banding the EPA and the Labor Department. Outlaw unions in the federal government.

  • sarg01

    And on the landlord side of the fence it probably is a racket, like almost anything else involving the government deciding how to distribute funds.

    However, on the side of the people who will live in those houses, there is a clear stimulative impact as they have more cash to spend. Even if they waste it on booze and big screens instead of paying their bills or feeding their kids, it’s still stimulative.

    Not that I’m saying government should be in that business … but just because something is wrong for dependency reasons doesn’t make it bad economics.

  • azrally

    In my market, owners who have LIHTC properties offer very small discounts on the rent. If I recall, the maximum required is 10% below market comps. Granted, this could be about $220k of potential rent converted to other economic activity for an average 300 unit community, if the full 10% is given to every apartment. But this is usually not the case. Only a percentage of the homes must be offered to the program, and the discounts don’t usually appear to be that large.

  • starboard

    The really sad thing is not only that Mr. Erickson is correct about the past, the present and the future in regard to the media’s economic premises; the really sad thing is that the media, and the Left as whole, doesn’t believe in Keynesian economics either.

    You see, they don’t believe in anything.

    They simply say what they say because it enhances their power to tell others – you and me – what to do.

    That’s why if Keynes doesn’t fit the audience, the Left will mouth the words of Jesus; and if neither Keynes nor Jesus fits, the Left will quote Marx, or Mao, or Castro. Whoever. Whatever.

    Just so long as they – the Left – rule.

    Elect no Democrat anywhere, ever.

  • starboard

    The really sad thing is not only that Mr. Erickson is correct about the past, the present and the future in regard to the media’s economic premises; the really sad thing is that the media, and the Left as whole, doesn’t believe in Keynesian economics either.

    You see, they don’t believe in anything.

    They simply say what they say because it enhances their power to tell others – you and me – what to do.

    That’s why if Keynes doesn’t fit the audience, the Left will mouth the words of Jesus; and if neither Keynes nor Jesus fits, the Left will quote Marx, or Mao, or Castro. Whoever. Whatever.

    Just so long as they – the Left – rule.

    Elect no Democrat anywhere, ever.

  • davesinsanantonio

    they can control it. Deep down they are haters. They hate everyone who is not like them. Their religion is that they must be in charge, and the rest of us are heretics for disagreeing on that tenet of their dogma. That is the only core value they have, and their fanaticism for it is unfaltering.

  • thx1138v2

    Jobs also are a means to their ends. That’s why all the jobs “saved or created” are _government_ jobs – fed, state, local. When they talk about “jobs” they are not talking about _private sector_ jobs.

    What better way to ensure promotion of the status quo then having the populace _directly_ dependent on the government for their pay checks?

    No one, however, seems to ask what happens when _everyone_ works for the government. Where does the money come from then? This is the absolute failure of Keynesian economics – just carry it out to its logical conclusion.

    What is actually going on, however, has nothing to do with economics unless you can call raiding the federal treasury an economic activity. The real problem is that once they threw the doors open they found an empty vault so had to borrow money to put in the treasury so they could steal it.

    I recognize it well. I have Viking ancestry.

  • jeffex11

    Obamaseyesian economics is Cloward and Piven economics. To put as many people as possible dependent on the government so as to overwhelm the system. To kill capitalism with his policies and claim it failed by itself. To usher in a new constitution that enumerates the power of government OVER it’s citizens.

    With a stimulus package that the forensics tell us was to keep public sector union jobs in place so they could continue to launder union dues back to the democratic party re-election coffers. To spend future taxpayer money to pay the entitlement voters to stay on the democratic voter plantation. To create government jobs that TAKE from Capitalism and not help generate public sector jobs. to declare “jobs saved ” as some great champion of policy….it is like the elusive BIGFOOT of this administration….someone thinks they saw a “job saved” but no one has any real evidence!!!

    Then you have an increase of 39% in people on food stamps…..”the food stamp President” record unemployment being hidden by juking the stats!!! How do you keep down inflation stats? you just don’t include food and energy prices that are necessarily skyrocketing!!!! THAT is jukin’ the stats

    Domestic energy killing policies that sick the junk yard dog EPA on Texas to stop harvesting oil and gas by declaring some little lizard “endangered” . The only thing in Texas that is endangered is free Americans!!

    Obama has mouthed the words himself….”we are 5 days away from fundamentally transforming the United States of America” stupid people thought that BS meant “transparency” and “draining the swamp in Washington” those of us who understand the failures of Keynesian economics saw this as pure BS back in 2007.

    That is what spawned the Tea Party ….people who know the lie’s that Obama was telling and that bailouts and fundamental transformation are code words for ushering in national Socialism. Building on the soft tyranny of the government in to something completely different than what our constitution states……

    After Obama studied the constitution ….not so he could adhere to it but so he could go around it !!!

  • disqussted

    Here’s one important aspect that no one in the corporate owned media, and no bought-and-paid-for politician will dare mention.

    Gee, if we could only make it easier for banks to loan money out into the economy to create jobs…wait, they already are able to borrow from the Federal Reserve at a whopping 1/4 of 1%. So, they must be busier than ever with their loan departments, right? Well, no, instead of working with small business owners to boost the economy, the banks take the money and turn right around and loan it back to the Treasury by buying treasury securities where the banks get 3 or 4% on their money.

    The big banks like J.P. Morgan Chase had record 1st quarter profits. They are NOT loaning all that money into the economy, so much needed jobs aren’t being created, and those profits are coming from us taxpayers, thus the deficit keeps getting bigger.

  • jeffex11

    Is Capital investment……The Obama policies of uncertainty and heavy handed government regulation are designed to keep the fuel of the economy on the sidelines. Trillions of dollars sit in Gold , cash, and off shore accounts scared to death of investing in capitalism under the anti-Capitalist Obama administration…..sadly ….just as they have planned all along.

    They want to choke off capitalism by killing the very fuel supply that runs the engine of our system of economics. Wealth accumulation means investment in our economic system. Scaring that investment to the sidelines is the Obama agenda…

    Redistributing YOUR wealth by devaluing everything you have that is valued in the American dollar…Redistributing it not to the stupid entitlement voter he promised back in 2007 if they would vote for him…but to other countries!!!! Sending billions to help Mexico and Brazil drill for offshore oil while shutting down our own domestic oil production…….

    please….if America survives Obama …..they will teach future economics students about Obamanesian…the form of economics designed to kill Capitalism and kill America as we know it

  • sparkyva

    There are two stories here, economics and journalism. We have kicked around both stories too long. We say we are going to elect fiscal conservatives the next time around. But few politicians have much experience with being fiscally conservative so they will probably make mistakes and the battles will continue.
    My question is what are we doing about the blatant bias of the media? What can be done about it? Is anyone actually trying to do anything about it? For 4 years the media has been trying to destroy Pallin’s chance of running with bogus facts and slanted coverage. They seem to have won if you read the polls. This is not about Palin, I like Cain as well. But what can be done to wrest the main stream media out of the control of the Libs? The owners don’t seem concerned about turning a profit, just helping out their friends in government. Can we get just one of the big 3 channels to be bought by a company that wants to serve the market/the American people?

  • jeffex11

    Great post…..what you describe is the looting of our wealth by this administration..And the banks are just as complicit as the media. While our dollars are devalued they make points on trillions of churned money. The fed prints money to buy treasuries that no one else will and everything WE own that is valued in dollars shrinks in real value. And everything we need to buy goes up and up. This is a government working AGAINST the people.

    They are building a new serfdom. The American people are sitting outside on the deck they borrowed money to build . They are drinking and laughing as if nothing is wrong . Meanwhile the Obama administration has let loose super – termites and they are eating away at the integrity of the support of that deck…..soon the entire think will snap like a twig and the deck …just like our dollar will collapse!! leaving you literally and figuratively…on you ass!!! BROKE

  • ihateliberals

    there is no News in Good News. Happy people don’t listen, watch or read the News. The reason the media leans to the left is when the left is in charge there is rarely good news. Right now people are glued to their TV’s, the Internet and News papers etc seeing what bad thing has happened or is gong on right now. The media are so tightly focused though that they lose sight of the bigger picture. Eventually if the media gets its way they don’t realize they coul dbe put out of business by the very same policies they advocated. Look at Venezuela. Once Chaves took over hew shut the papers, radio and TV down and only allowed what he wanted into the media streams. he chose which TV station he wantd, Which News papere would be allowed and what Radioi station would broadcast. If he didn’t like what they were doing he woul dshut them down. This is always the end result of Socialism, communism etc. yet the media drive strait head first as fast as they can go into the brick wall.

    Right now even as i write this there are Progressive Liberals trying to figure out how to shutdown Talk Radio. That would be the first step. If Obama could get away with it Fox news would be no more.

    This is why the media tightly control anything good coming from the Right and they especially hate the Tea Party becasue they advocate returning to true constitutional government which wold mean a return to prosperity. There is no news in good news. People don’t clamber to see today’s paper to see that thhe job market is booming or that the Stock market is hving record highs. When things are good people are too bsy doing their jobs, having fun with family and just enjoying life. i remember the Reagan years when I was trying to hire telephone receptionist that would normal pay $5 to $6 an hour and I culdn’t find anyone even at $10 an hour. There just weren’t any people available. .youu didn’t read that in the News papers. Even if it were in there no one was buying papers to see it. Conservatives means good times and the media hate that.

  • renny

    as the admin. in DC, and “the press” has promoted, campaigned for, excused, and even lauded the worst excesses of o and ilk.

    They’ve just gotten a new EIC for the NYSlimes, a woman. I hope she is used to short tenures in her journalistic pursuits.

  • johnstoirvin

    and it IS caused by humans! I’m speaking, of course, of the economic climate. Think for a moment about the frightening consequences if these same “humans” try to change the earth’s climate as they have done with the economic one. Fool me once….

  • YnotNOW

    Government overregulation and anti-business policy creates uncertainty in the market. Businesses delay or set aside investments. The economy lags. Government steps in and makes matters worse, building up debts which will have to be paid in the future. Creating uncertainty in the future markets, causing businesses to delay or set aside investments….

    And on we go!

  • YnotNOW

    Government overregulation and anti-business policy creates uncertainty in the market. Businesses delay or set aside investments. The economy lags. Government steps in and makes matters worse, building up debts which will have to be paid in the future. Creating uncertainty in the future markets, causing businesses to delay or set aside investments….

    And on we go!

  • johnnybee

    We simply need a Hypocratic Oath that reporters must take and live by or face punishment, including loss of their employment. Do NO harm!!!! No spinning of facts. Just the facts! Editorializing must be labeled as such or face punishment.

  • YnotNOW

    nt

  • YnotNOW

    nt

  • Ned Reck

    How can somebody say that they were asserting a “laser-like focus on creating jobs”… and for 1 1/2 years were so oblivious to job creation by focusing on health care… and still be believed by his blinded followers….

    Is totally unfathomable to me.

    Why is this FACT not hammered home every single day by every right-thinking person of leadership of the Republicans? In speaking to any and all journalists… the fact needs to be the preface and brought up every single time a caring person opens his/her facial verbal-emitting orifice. It needs to hammered home.

    Ned Reck

  • MF

    That wouldn’t work even if every single media respresentative were to follow that to the letter. For in many cases, truth is in the eye of the beholder. Most of these people truly believe what they are reporting. True reality is irrelevant.

    Think about a really bad doctor. He totally mishandles treatment of patient, but he has not violated his oath if he did his very best. The fact of the matter is that his very best is simply not good enough. Yeah, he may lose his medical license, but it’s not due to violation of the oath.

    Let’s think about politicians. Quite a few of them truly believe their actions are for the best of their constituents. Guys like Bernie Sanders truly believe that socialism is best and fairest for their country. That we know better is irrelevant.

  • gpclaw

    Housing subsidies drive up home prices, because of increased demand. Anything that interferes with the price system,, hurts the overall economy more than it helps, because subsidies always create inflation.

    If someone needs a subsidy in order to afford a home, then they shouldn’t own a home. There is a very simple way to afford the mortgage on a home, without relying on subsidies – make a bigger down payment.

  • gpclaw

    Is your local grocery store. Not only will you find a wide range of products, but also a wide range of diversity of each type of product. Every producer is competing with one another, and trying to out do the competition. Because of the massive product selection, the only way to win market share is through improved quality, or lower prices.

    The ability to feed ourselves is the most basic human need, yet their is no government central planning at your local grocery store. Their are no technocrats creating regulations, mandating what grocery stores must charge for their products, or what types of products they must sell. If the free market was such a failure, than why is it that the vast majority of American’s can afford to feed their families?

  • gpclaw

    Keynes theory has been misinterpreted, much in the same way that Arthur Laffers theory has.

    The Laffer curve has been used to state that tax cuts lead to more tax revenue, however, this is not the claim that Laffer made. His theory states that a tax rate exists, in which tax revenues to the government will be maximized. Any rate higher, or lower than this rate, means that the government is not collecting as much revenue as it could. At the time Laffer came up with his theory, tax rate were brutal. This is why he advocated lower rates, because the rates at the time were higher than the rate that would maximize revenue.

    Regarding Keynes theory, he called for increasing government spending during economic downturns, and reduced government spending during times of economic growth. Of course, was all know that government doesn’t work that way, because once federal budgets are increased, it is almost impossible to bring them back down.

    Recent studies conducted after the stimulus plans took effect, have indicated that government debt levels have an impact on fiscal stimulus. When a country has a small debt to GDP ratio, government stimulus does help kick start the economy. However, these same policies do not work in nations with a high debt to GDP ratio, which is why stimulus doesn’t work in the United States.

  • msctex

    . . .grounded in fact which will make them look at you for a few seconds and shake their heads, as they are forced to decide between admitting their educations and philosophy are nonsense, or admitting the fact a dozen varieties of apples to choose from can be shown to prove the efficacy of Free Markets.

    That this can be accomplished at Whole Foods is just a bonus.

  • gpclaw

    Redirects capital into areas that don’t maximize wealth creation. Every dollar that is invested in an industry that requires a subsidy, is a dollar not invested in an industry that can stand on it’s own two feet. This means, that in the long run, less wealth is created, which means less jobs, and less economic growth.

  • msctex

    Though I’d say they “believe” in something. It is just that tomorrow, often literally, it may be something different. But they’ll encourage other people to fight to the death for what they believe today, that’s something. . .

    Kind of proves integrity requires a solid base. And as you note, Progressives have no consistent principles.

  • renny

    The left has always thought the Am. business machine was so impervious to constant gov’t impositions that they forgot that many decades of Fannie Freddie CRA’s bank regulation EPA DOT XYZ would eventually bring even Am. capitalism to a near halt.

    And, now, that they really have what they want, unlimited money to throw at everything and a lapdog media and split to impotent Congress, they are stymied because NOTHING is working.

    They threw every monkey wrench known to economics and politics at the American business person and lo and behold he stopped functioning, stopped hiring, stopped investing, stopped expanding, stopped producing, and some of them just stopped as businesses at all, and NOW the left (even HuffPo is all atwitter that there are no jobs) is even recognizing that NO JOBS means no power, no revenues, not higher debt celing, no NOTHING.

    And I hope it means NO o in 2012. Some Rep. candidate has got to seize the old Clinton trope of it’s the economy, STUPIDS, and run with it. Maybe Sarah Palin will begin to sledge hammer them with it. And what else can they do to her?

  • acat

    the teaching of critical thinking in the public schools.

    The problem we have isn’t because we stopped teaching facts, the problem is that we’ve stopped teaching how to analyze problems and look at arguments and see the persuasion for what it is…

    There are a number of high school graduations going on around my area today -I know most of the graduates know who Columbus was, I wonder how many of them know how to think…

    Mew

  • acat
  • http://impudent.edublogs.org/ kyle8

    I didn’t learn to “Think” critically until about my junior year in college when I took a course on logic and rhetoric. And even then that was just the beginning of learning.

    It wasn’t really until I was in my forties that I started to really doubt everything I saw and everything I heard.

    In short, wisdom is an offshoot of cynicism. And young people never have enough of that.

  • acat

    It’s not a lack of cynicism, it’s a lack of logical reasoning, asking questions, and tearing apart the rotten arguments that’s lacking…. and that is squarely on the educrats.

    Mew