Making the economy grow again

Jeffrey Tucker is the editor in chief at the American Institute for Economic Research where the article discussed below has been posted. A bit, actually quite a bit, more charitable about the New York Times than I would ever be, but let that go. He is discussing the miracle of the market economy that goes along without any serious appreciation of its role or any understanding of how it works. “Socialism” as it exists today is based on the market economy; it is the only reason things are continuing even as well as they are. He is also talking about role of the mainstream media as “we watch freedom going down the drain”. This is the summary of Jeffrey’s argument from the video:

Dave Rubin of The Rubin Report talks to Jeffrey A. Tucker (American Institute for Economic Research) about freedom and liberty in a time of government imposed lockdown. Jeffrey holds the mainstream media like the New York Times, CNN, and MSNBC and their hatred for Donald Trump responsible for creating the panic that led to the lockdown we now live under. Jeffrey also discusses how our free market economy is still performing well despite the forced closure of many industries by the government. He describes how grocery stores are adjusting to make sure they are addressing people’s needs and keeping essentials in stock. He believes that it is capitalism that enables us to adapt to such severe changes so quickly.

I have meshed my classical understanding of the operation of an economy – what it means to be an actual liberal – with what needs to be done to get our economies moving forward in this post of mine at the AIER: This Economy Can be Revived. This comes at an opportune time: Trump to announce council for “opening our country” next week. This is how my article begins:

In my previous article, A Classical Economic Response to the Coronavirus Recession,” my aim was to discuss why modern macroeconomics cannot explain the nature of an economy, and more importantly cannot provide a sound analytical basis for policy. If we follow modern macro in dealing with the coronavirus, we will leave our economies mired in slow growth, higher unemployment and even deeper in debt.

That, however, is not the full story, but you will have to read right to the end to find out how things could turn out well if we understand what needs to be done.

Here we are in the midst of a new kind of policy, something never experienced anywhere ever before, where the deliberate aim of government policy has been to slow the rate of growth, raise the level of unemployment, and rack up much higher levels of debt.

We are on the breathtaking edge of a global consensus on entering a socialist compact to manage the economy from the centre, or at least, for the time being from each nation’s own economic centre. Global government perhaps is now on the horizon if things continue as they are. It is a truly terrifying prospect, made all the worse because of how complacently it has all been accepted.

The ease with which all this has come about is in part because of the way the role of the dead hand of government has already been meshed into the prevailing theory of the economy as a whole, which is a direct descendant of the Keynesian theory brought to life with the publication of Keynes’s General Theory in 1936.

I will state the problem in a single sentence and then elaborate from there. Modern macroeconomic theory looks only at the money value of what is being bought and sold at the present time and virtually never looks at the economy as a whole in structural terms nor over the longer term.

If you are interested in the full explanation of the way our economies are structured as a pathway towards understanding how we can revive our economies from here, just go to the link.

And in getting an upturn in place, there should be no doubt that many have been very badly damaged by this programmed downturn and many may never recover from the losses they have sustained. But if we go about this in the right way, in about a year our economies will be trundling along as if nothing had ever happened. At the very height of what must not be done is to start from the premise that was is needed now is a stimulus of any kind.

I might add that the picture below is the one that accompanies my article and seems quite a appropriate for both Easter, and the theme of freedom which comes with Passover, which we are also celebrating at the moment. My best wishes for the holidays to you, whichever, if any, apply to yourself, all in the hope that our present political disease will soon be passed and that our freedoms will be taken back by us with this knowledge of how they can be stolen virtually over night, almost in a fit of inattention.

Revive the economy

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14 Responses to Making the economy grow again

  1. jupes

    Jeffrey is also a never-Trump, open borders loon.

  2. John A

    Meanwhile as per the second graphic:

    He is Risen!
    He is Risen, indeed!

  3. Gavin R Putland

    “Et resurrexit tertia die…”

    Happy Easter to those on the western calendar.

    Disclaimer: I’m eastern Orthodox; today is my Palm Sunday. 😛

  4. vlad

    What I personally think happened is that because some people could work for home, they were sent home first and thereafter it snowballed.

    If no one (much) could have worked from home – eg 25 or even 20 years ago – we’d all be still at work.

    Anyone who wants to explain this crisis has to explain how and why it happened when other recent pandemics didn’t lead to this sort of panic. I’d say social media is one of the new factors that played a part.

  5. Rafe Champion

    Interesting calculations by Paul Fritjers at Troppo.
    In an earlier post I calculated the loss of life due to the economic recession caused by the hysteria to be at least 10 million whole lives in the whole world, probably closer to 50 million.

    And Nicholas Gruen has really gone troppo.

  6. Rafe Champion

    But what would you expect from a Keynesian?

  7. Rafe Champion

    You forgot to mention that the wind is only delivering 12% of the demand for power. What parts of Australia get hot coffee in the morning when they start rationing electricity? You can bet on the ACT and suburbs behind the goats cheese curtain in the big cities.

  8. The forecasts were seemingly quite accurate, we’re up shit creek if this is unnecessary clown show of a lockdown continues.

    16.8% according to Roy Morgan.

    How high will it be after 18 months and hundreds of billions of crippling public debt?

    Frijters and Gruen ought to hand back their degrees.

  9. Bruce

    THEIR Gay Bee Si running hard with the leede that the US has the highest COVID19 body-count in the world, (with all the nudge-nudge that such a claim implies).

    Their ideological puppeteers in China will be smiling inscrutably over that.

    Our rice and bat-soup propelled “cousins” seem to have had the death toll, in Wuhan alone, totally suppressed.

    Funny, that.

    About all those millions of Chinese domestic mobile phones ceasing all activity?

  10. Bruce

    Also on that taxpayer-funded broadcaster, the editorializing statement that COVID19 is Trumps greatest opponent in the forthcoming election.

    Firstly, his greatest opponent is the LSM.

    Secondly, they have just passed judgement on the “contenders” from the Demoncrap camp.

    Quality “merchandise”!

  11. Alex Davidson

    Steve, you conclude your linked AIER article saying “There’s no reason why, if we allow the private sector to grow again, that we could not end up with the same kind of revival as we had back then.”

    However back then there wasn’t the massive regulatory burden that stifles entrepreneurial activity today. We don’t actually live in an environment “where everyone is welcome to apply their talents in the areas best placed to use them”. We live in an environment consisting of a vast array of intertwined government-sanctioned protection rackets that make many potential market-driven activities impossible, and there is no evidence that will change after this period of madness.

  12. max

    #3406681, posted on April 12, 2020 at 12:35 am
    Jeffrey is also a never-Trump, open borders loon.

    And you are loon that believe in this:

    I’m from the government and I’m here to help.”

  13. Big Moose

    Not announced on the news yet but on the Queensland Education site – schools will be out till 23 May and home based learning required if your child has someone to stay home with them.

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