The current economic crisis shows that the state has failed to manage the economy and that politicians have too often adopted the Keynesian approach, writes journalist Urs Paul Engeler in the conservative weekly Die Weltwoche:Emphasis Mine.
By following today's apologists of the British economist John Maynard Keynes (1883-1946), the so-called 'welfare' states pumped too much money (which they didn't have) into consumption: into pensions for all (Europe), exorbitant armament (US), endangered industries (both), and finally bailouts for ailing mortgage banks (also both). This intervention was celebrated by Keynes' disciples as the 'return of politics'. In reality the hopelessly over-indebted states only exacerbated the crisis. Today they are locations of insecurity.
Those who argue that the state should be active with funds, subsidies and interventions - in short that it should perpetuate the debt economy - turn the wheel in exactly the wrong direction.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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