But why are Keynes’ thoroughly debunked notions still in vogue? Why was the usually brilliant Murray Rothbard so wrong when he predicted this 1959 book would mark the death knell of the economic nonsense preached by John Maynard Keynes?
This question appears at first a lot harder to answer. Henry Hazlitt, after all, was not some obscure gadfly. He was arguably the nation’s best-known and best respected financial writer and commentator.
I believe there are two answers. First, a dumbed-down American populace, trained to believe that economic theory is deadly dull and of no practical use, tends to cover their ears when such stuff is discussed.
But the second reason is far more obvious. Imagine any of our egotistical and money- and power-hungry members of Congress or chief executives (of either party) today announcing, “Gee, this economic downturn sure is a misery. Too bad there’s nothing the central government can do but to slash spending till our budget is in surplus so Washington is no longer crowding out private borrowers, meantime putting us back on the silver standard and shutting down the Federal Reserve. So all you lobbyists here to plead for special favors just might as well go home. Store’s closed.”
What? Give up the greatest excuse since Hitler and Tojo for enacting every pork barrel spending spree they can imagine? Are you crazy?!
Instead, what passes for “change” in Washington today are a chief executive and a Congress so desperate to place the heir-apparent to the guys who got us into this mess – Timothy Geithner, head of the Federal Reserve Bank of New York – in charge of their government monetary policy, that they avert their eyes and imitate Sgt. Schultz (“I see Nuh-think!”) when it turns out their guy failed to pay tens of thousands of dollars in personal income taxes.
Other Cabinet nominees get tossed to the roadside for neglecting to pay a few hundred bucks to a baby-sitter, but that’s how desperate this gang is to keep the same desperate, crooked – Keynesian – crew in charge of our sinking economic ship, rather than bring in some outsider who might run an audit, throw open the door to the empty vault, and spill the beans.
And they call it “change.”</em>