AMERICAN CONSERVATISM IN 2008 AND BEYOND

Doctors have seen their costs fall for liability insurance as malpractice insurance companies return to the state and to profitability. There is no evidence of savings to Texas consumers, however.

If that happens, I believe doctor's fees for medical services will decrease as a result.

Because new Keynesian economics is a school of thought regarding macroeconomic theory, its adherents do not necessarily share a single view about economic policy. At the broadest level new Keynesian economics suggests"in contrast to some new classical theories"that recessions do not represent the efficient functioning of markets. The elements of new Keynesian economics, such as menu costs, staggered prices, coordination failures, and efficiency wages, represent substantial departures from the assumptions of classical economics, which provides the intellectual basis for economists' usual justification of laissezfaire. In new Keynesian theories recessions are caused by some economy-wide market failure. Thus, new Keynesian economics provides a rationale for government intervention in the economy, such as countercyclical monetary or fiscal policy. Whether policymakers should intervene in practice, however, is a more difficult question that entails various political as well as economic judgments.
--N. Gregory Mankiw, Professor of Economics, Harvard Univ.
http://www.econlib.org/library/Enc1/NewKeynesianEconomics.html

Last semester I suffered through what I hope will be my most difficult class at Stern, International Macroeconomics. Getting the "A" wasn't the difficult part, it was stomaching and regurgitating the falsehoods, evasions, and malevolent policy advice of Keynesian macroeconomics.

Most Stern students will only take one course in macroeconomics, and sadly, it appears that in that one class, students are taught less than nothing. Rather than an education, what I and my classmates received was a dis-education, being taught false theories, and being told that the common-sense ideas they already had accumulated about economics must be erased. An unwary student would leave the class knowing less about economics than when he entered.

Let's face it -- Keynesian economics certainly didn't provide me or my classmates with the ability to predict the economic future. Even top professional Keynesian economists predict the future with about the same accuracy as Miss Cleo, though at far greater expense. And very few of us left our global macro class thinking that we had a greater understanding of how the economy worked, or had gained a valuable professional skill, unless it's how to pretend to understand Keynesian analysis.

To learn any subject, students must be taught how new concepts are rooted in reality, and are then shown how to integrate these concepts into a logical structure that offers a broader and deeper understanding of reality. If new concepts are not tied to observations of reality, then "learning" becomes the opposite - it becomes an exercise in intellectual disintegration - where students are told to abandon the concepts and ideas they have gathered through observation, and to instead memorize and obey the professor's new "floating" ideas backed by nothing but the student's fear of a failing grade. Then "learning" becomes a meaningless, disconnected, useless exercise, conveying words but not knowledge.

For example: If apples are razors and oranges are blades, then we can shave with fruit salad. Write an essay applying this theory to your grocery shopping - 15 points.

Many students appeared shell-shocked, wondering if they were really supposed to understand these theories, wondering if they somehow missed a lecture when the professor connected his fanciful curves to the economic reality they live in. (The Keynesian half-hearted attempts to connect theory to reality via the "Keynesian Cross" and the theory of "Liquidity Preference" are arbitrary, narrow, and unconvincing.) When a student attempted, as a rational person would, to somehow connect Keynesian theory to their own observations of reality and the business world, he got a response similar to Groucho Marx's: "Who are you going to believe, Me, or your lying eyes?"
In class, I was asked to imagine myself some sort of economic dictator, using the coercive powers of the state to take from some people and give to others. To steal from one man's savings, to provide for another man's leisure. To try to prevent people from saving for the future, and force them to spend as if there's no tomorrow. After all, as Keynes famously said "in the long run we are all dead."

To get my A, I had to debase myself on paper - I had to pretend that the salvation of an economy is high government spending, and more government controls, not a reduced tax burden on producers. I had to pretend that I thought the main reason Singapore has grown faster than North Korea over the past 30 years is that Singaporeans save more of their money (note that the growth differences were the result of Singapore being a business-friendly, mostly free economy, while North Korea is a communist tyranny).

Of course I was able to recite the standard Keynesian economic lines--I've been teaching myself economics for over a decade, learning about the wholesale intellectual bankruptcy of the Keynesian mainstream, and discovering better alternative frameworks. So I know my enemy well.

What was the quickest way to answer any question in class? - just imagine what the Democratic party shill, Professor Paul Krugman would write in his New York Times column on the subject. Whatever hurts "rich people" most and expands the size and scope of the government in the economy is generally the "correct" answer in Keynesian analysis. And that's why Keynes became popular in the first place - his scribblings provided a "scientific" justification for the big-government schemes of leftist politicians and their friends in Universities. Keynes' popularity in the 30's emerged from emotions of envy and the socialist hatred of business and laissez-faire, covered by the veneer of academic respectability.
http://www.capmag.com/article.asp?ID=1452

Keynes completely understood the central role of profit in the capitalist system. This is one reason why he was so strongly opposed to deflation and why, at the end of the day, his cure for unemployment was to restore profits to employers. He also appreciated the importance of entrepreneurship: "If the animal spirits are dimmed and the spontaneous optimism falters … enterprise will fade and die." And he knew that the general business environment was critical for growth; hence business confidence was an important economic factor. As Keynes acknowledged, "Economic prosperity is … dependent on a political and social atmosphere which is congenial to the average businessman."

A major theme of The General Theory is the importance of maintaining the freedom for prices to adjust, which is necessary for the proper functioning of the economy. This made Keynes a strong opponent of price controls and national economic planning, which was much in vogue after the Second World War. "The advantage to efficiency of the decentralization of decisions and of individual responsibility is even greater, perhaps, than the 19th century supposed; and the reaction against the appeal to self-interest may have gone too far," he wrote.

Indeed, the whole point of The General Theory was about preserving what was good and necessary in capitalism, as well as protecting it against authoritarian attacks, by separating microeconomics, the economics of prices and the firm, from macroeconomics, the economics of the economy as a whole. In order to preserve economic freedom in the former, which Keynes thought was critical for efficiency, increased government intervention in the latter was unavoidable. While pure free marketers lament this development, the alternative, as Keynes saw it, was the complete destruction of capitalism and its replacement by some form of socialism.

"It is certain," Keynes wrote, "that the world will not much longer tolerate the unemployment which … is associated--and, in my opinion, inevitably associated--with present-day capitalistic individualism. But it may be possible by a right analysis of the problem to cure the disease whilst preserving efficiency and freedom."

In Keynes' view, it was sufficient for government intervention to be limited to the macroeconomy--that is, to use monetary and fiscal policy to maintain total spending (effective demand), which would both sustain growth and eliminate political pressure for radical actions to reduce unemployment. "It is not the ownership of the instruments of production which is important for the State to assume," Keynes wrote. "If the State is able to determine the aggregate amount of resources devoted to augmenting the instruments and the basic rate of reward to those who own them, it will have accomplished all that is necessary."
http://www.forbes.com/2009/08/13/john-maynard-keynes-conservative-opinions-columnists-bruce-bartlett.html

In this way I believe the supposed controversy really involves economists of differeing political perspectives talking at each other about economic theory, but in fact expressing different points of view about political issues involving government generally.

I have always thought that the presumed conflict between Keynsians and so-called new conservatives involved everything but the essential principles of Keynsian theory (which were indeed nicely summarized in the article you linked). That government spending, particularly during a recession, might be beneficial, particularly if it involved relatively high multipliers (however estimated) seemed always to me to be a point about which no one disagreed.

BTW -- waddya think of Angela's big win?

georgeob1 wrote:

BTW -- waddya think of Angela's big win?

Angela only held steady. The big win belongs to Guido and his Free Democrats. I'm very happy for him about it. I think it's great that Germany now gets a coalition of conservatives and classical liberals. It's good for Germany's democracy that it will have a strong opposition again. And just to top it off, there's hope that Guido will teach Angela some fashion sense. Man does she need it.

A woman as chancellor and a gay as vice chancellor and foreign minister -- try topping this, American conservatives!

Bachmann in St. Louis: Defund the Left, Beware One-World Currency
(By David Weigel, The Washington Independent, September 26, 2009)

ST. LOUIS " Speaking to a packed hotel ballroom at the conservative How to Take Back America Conference, Rep. Michele Bachmann (R-Minn.) said that exposes of “criminal tomfoolery” inside of ACORN could kick off a campaign to “defund the left.”

Bachmann was introduced warmly by Phyllis Schlafly, the iconic conservative activist whose Eagle Forum was the chief sponsor of the event. “She’s one of our Republican stars,” said Schlafly, “and some of you came here just to see her.” She got a second introduction from Dick Bott, a conservative radio host who briefly broke down talking about Bachmann’s hospitality to foster children.

Taking the stage, Bachmann thanked Schlafly, calling her an inspiration as a mother who transitioned into conservative politics, and said she considered the conference “a farewell party for ACORN!” The community organization group, she said, was the first, not the last, weak link in the liberal establishment.
“Defunding the left is going to be so easy,” said Bachmann, “and it’s going to solve so many of our problems.” She praised James O’Keefe III and Hannah Giles, the people behind the ACORN sting. “Hannah and James used Saul Alinsky’s ‘Rules for Radicals’ " that’s the community organizer’s bible " against ACORN! Brilliant!”

Bachmann touched on the priorities of Republicans if they retook Congress in 2010, to “pass repealer bill after repealer bill,” to prevent the creation of a one-world currency, and to pull the government back from the “36 percent of private business profits” that she claimed it now controlled. And she said Michigan residents were “depressed enough” without Gitmo prisoners being relocated to state facilities where they could inspire more terrorists.

“This is where they learn conversion to Islam!” said Bachmann. “In the prisons!”

After the speech, Bachmann had only a few minutes to sign autographs and collect a stack of CDs and books from fans who’d followed her into the lobby. I caught up to her as she headed outside and asked if she had any response to the murder of a Kentucky census worker, having noticed that the Census, a constant target for Bachmann, did not figure into her speech. Bachmann recoiled a little at the question and turned to enter her limo.

“Thank you so much!” she said.

Support for Health Care Plan Hits New Low

Monday, September 28, 2009 Email to a Friend ShareThisAdvertisement
Just 41% of voters nationwide now favor the health care reform proposed by President Obama and congressional Democrats. That’s down two points from a week ago and the lowest level of support yet measured.

The latest Rasmussen Reports national telephone survey finds that 56% are opposed to the plan.

Senior citizens are less supportive of the plan than younger voters. In the latest survey, just 33% of seniors favor the plan while 59% are opposed. The intensity gap among seniors is significant. Only 16% of the over-65 crowd Strongly Favors the legislation while 46% are Strongly Opposed.

For the first time ever, a slight plurality of voters now express doubt that the legislation will become law this year. Forty-six percent (46%) say passage is likely while 47% say it is not. Those figures include 18% who say passage is Very Likely and 15% who say it is Not at All Likely. Sixty percent (60%) are less certain.

Sixty-eight percent (68%) of Democrats say the plan is at least somewhat likely to become law. Sixty-one percent (61%) of Republicans disagree. Among those not affiliated with either
http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/september_2009/health_care_reform

Daily Presidential Tracking Poll
Monday, September 28, 2009

The Rasmussen Reports daily Presidential Tracking Poll Monday shows that 30% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-nine percent (39%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -9 (see trends).

Support for the health care reform proposed by the President and Congressional Democrats has fallen to its lowest level yet. Senior citizens are less supportive of the plan than younger voters.

The Presidential Approval Index is calculated by subtracting the number who Strongly Disapprove from the number who Strongly Approve. It is updated daily at 9:30 a.m. Eastern (sign up for free daily e-mail update). Updates also available on Twitter and Facebook.

Overall, 49% of voters say they at least somewhat approve of the President's performance. Fifty-one (51%) disapprove

What They Told Us: Reviewing Last Week’s Key Polls
Saturday, September 26, 2009

Few nations are as generous with their time and money as the United States, but right now Americans are a suspicious bunch.

Sixty-six percent (66%) of voters nationwide say they’re at least somewhat angry about the current policies of the federal government. Thirty-six percent (36%) are Very Angry.

Despite the high level of political anger last year that helped fuel President Obama’s election, 59% say the current level of political anger in the country is higher than it was when George W. Bush was president.

A lot of that anger is directed at the people who are spending billions and billion of dollars of taxpayer money. That helps explain why members of Congress have now surpassed corporate CEOs to hold the least favorably regarded profession in the country.

Just 16% of voters give Congress good or excellent ratings now that it's back from a rough-and-tumble August recess. That’s down seven points from its highest rating of 2009, reached in late May. Fifty-three (53%) percent say Congress is doing a poor job.

Obama’s Approval Index ratings remain in negative territory as well in the Rasmussen Reports daily Presidential Tracking Poll.

The president turned his considerable diplomatic skills to the international front for much of this past week. While world leaders were charmed by and in general agreement with Obama, his fellow countrymen were less obliging.

But then voters have expressed growing unease with the president’s handling of national security issues in recent weeks.

Voters have divided feelings about the president’s decision to halt the deployment of a proposed anti-missile shield in Eastern Europe, and many worry that it will hurt America’s relationship with its European allies.

Despite the president’s call for urgent action, Americans continue to send mixed signals about the dangers of climate change, and 47% reject the idea that they are selfish putting economic concerns ahead of the fight against global warming. Twenty-nine percent (29%) of adults take the opposite view and believe Americans are being selfish for putting the economy first.

While Obama was the first U.S. president to chair a meeting of the United Nations Security Council, the views most voters have of the U.N. remain largely unchanged. Just 29% see the U.N. as an ally of the United States, while 15% regard the international organization as an enemy. For 47%, the U.N. falls somewhere in between the two.

Considering that the United States is the largest financial contributor to the international organization, 38% believe countries that give more should have more voters in the United Nations.

On the domestic front, Democrats more strongly than ever regard health care reform as the most important of the budget priorities outlined by Obama earlier this year. Republicans and voters not affiliated with either party see deficit reduction as the priority.

Fifty-eight percent (58%) of voters without health insurance favor passage of the health care plan proposed by the president and congressional Democrats.

Most Americans favor the soon-to-expire program that provides first-time home buyers with tax credits of up to $8,000, at least until they hear how much it costs. Adults are evenly divided over which should be the top housing priority " making it easier for first-time home buyers or keeping the value of existing homes as high as possible.

Americans are now slightly more confident that government action can help the housing market, but a sizable majority continues to believe that the market will only improve when the overall economy gets better.

Thirty-six percent (36%) of voters now believe the $787-billion economic stimulus plan passed by Congress in February has helped the economy. That’s the highest level of support for the plan yet, although 28% say it hurt the economy and another 28% say it has had no impact.

The Rasmussen Investor Index, which measures the economic confidence of investors on a daily basis, reached its highest level in over a year on Thursday. The Rasmussen Consumer Index, which also measures daily confidence, remains roughly where it has been for weeks but is up 20 points from the beginning of 2009.
http://www.rasmussenreports.com/public_content/politics/weekly_updates/what_they_told_us_reviewing_last_week_s_key_polls

Americans Still Say Local Solutions Better for Economy Than G-20
Monday, September 28, 2009

The leaders of the world’s most powerful nations may have agreed late last week to work more closely together to control and protect the global economy, but Americans believe more than ever that the best solutions start at home.

A new Rasmussen Reports national telephone survey finds that just 23% of Americans believe that decisions made by world leaders to help the global economy will do more to help the U.S. economy than decisions made by domestic business leaders.

Fifty-eight percent (58%) say the American economy will be helped more by decisions made by U.S. business leaders to help their own businesses grow. Eighteen percent (18%) are not sure.

The new findings reflect even more confidence in U.S. business leaders than in surveys at the beginning of April to and in early July.

Similarly, only 28% now think decisions made by world leaders to help the global economy will do more good than decisions made by those same leaders for their individual countries.

Fifty-seven percent (57%) of Americans say decisions made by leaders of each country to help their own economies grow will do more to help the global economic situation. Fifteen percent (15%) are undecided.
http://www.rasmussenreports.com/public_content/politics/general_politics/september_2009/americans_still_say_local_solutions_better_for_economy_than_g_20

Good! This is an excellent bill which should be signed by the president.

If you don't want to perform medical procedures, get the **** out of the business. Easy as pie. A doctor's personal morality should not be the deciding factor as to whether or not a procedure should be performed, and if the doctors or hospitals are relying upon Government funding, they should not be able to refuse clients' legitimate requests for an operation.

Cycloptichorn