News & Analysis
Keynes Cocktail Is No Joke
Austin Driven to Drink Keynesian ... Does the economy have you feeling muddled? Let's put that muddler to better use. Climb aboard the Keynesian Economics bar crawl in Austin! – CNBC
Dominant Social Theme: That Keynes is some funny guy.
Free-Market Analysis: This really isn't funny to us. We've kinda lost our sense of humor, at least about John Maynard, Keynes, Keynesianism, The Fabian Society, the Bloomsbury group ... and all the rest. We're seeing the results of Keynesianism all around us and it isn't pretty.
A few months ago there seemed to be a genuine Keynesian revival. It was a kind of sub-dominant social theme, as if the elites were beginning another campaign to remake Keynes' credibility. We began to read articles – even in the "soft" libertarian press – about how Keynes really didn't mean for his theories to produce the current havoc. They'd been misapplied, you see.
But what did Keynes expect? He worked in the British Treasury and eventually his "general theory" handed over the keys to the vault – complete with equations – to the State. He provided Leviathan an entire ready-made justification for the worst kind of meddling. We don't see why he would be indignant about it. He planned it that way.
What are the results of modern Keynesianism? Well, Fed Chairman Ben Bernanke's been trying hard to make Keynes' theories work without much success. The whole idea that government can administer an economy has kind of fallen by the wayside. What's left behind are smoldering ruins. The US has some US$200 trillion in obligations and not a chance in hell of paying it out.
A big devaluation is coming; people will probably die as a result. They'll starve to death in the dark, unable to find work or live on the constantly dwindling benefits the government continues to offer with less and less enthusiasm. Thanks, Dr. Keynes – we'll take a pass on the bar crawl.
Mike Litt is grateful to Keynes as well, according to CNBC. He's the "genius" behind the launch of a "Mixed Economy" cocktail to be made available at three different Austin bars on July 23rd. (See above excerpt.) CNBC finds it's as funny as Litt does (go figure).
It may take you three bars to understand John Maynard Keynes. Be sure to bring a tax attorney and a designated driver. "Rampant Free Market Ideology Has Put the Idea of a Mixed Economy 'on the Rocks'" is Litt's pitch, which he's promoting on social media, twitter.com/amixedeconomy and on its own website – amixedeconomy.com.
"Seventy-six people have RSVP'd so far on the Facebook page to attend the bar crawl," Litt tells me. "That should improve the economy, at least for that night." The Mixed Economy cocktail is made of vodka and pomegranate juice, a "socially-minded drink" that "aims to spur discussion and increase support for Keynesian thought."
It's come to that? You have to get people drunk to increase support for Keynes? Litt submitted the idea as part an Austin art event. His website, iLoveMikeLitt.com, describes his efforts and those of his friends as "an outlet to put together cultural events that we think would be fun and awesome."
According to the article, Litt is a "self-described progressive who support veganism ... non-profits ... and the need for government intervention. "Participants in the bar crawl will receive a picture of Keynes and a recipe. They'll also get an "explanation of his economic model ...
"If markets and individual actions alone don't produce the results we want as a society, we can take collective action through institutions like government to make adjustments. That's the idea behind a mixed economy." Too bad Litt never read Human Action or he'd know mixed economies don't work. They always end up invalidating price discovery and then the whole thing inevitably tumbles down.
As for Keynes, there's no hope that the algorithmic nonsense he was peddling will leave the premises altogether. He's the State's favorite economist because he wrote a book as heavy as a door-stopper to explain that the State had a role to play in private markets.
The book (General Theory) is incomprehensible; his theories are wrong; they don't work in practice, but because he proposed that Leviathan could be aided in its quest to build a better tomorrow by printing money, he will be in favor virtually forever or until the whole rotten edifice tumbles (which could be very soon).
Keynes' was a forerunner of modern, forward-looking statistical analysis, which has virtually taken over the field of economics. But like so many professions in the modern-era, it's based on a fallacy. We know that is impossible to make specific projections about the economy and human behavior – except very generally – because once government plans are put into action to address the perceived problems human behavior CHANGES. That's why government laws are always running into "unintended consequences."
Anyway, Keynes' big idea – one that took several thousand pages to write and to prove (and even then he was wrong) was that government could save money for the bad times and then ameliorate business cycle downturns by spending it to cushion the downturn. It was actually an idea built on the Austrian concept of the business cycle; only it gave the State and central banking a role to play.
In actuality, of course, regulatory democracies NEVER ever "save." Governments are run by people who are anxious to loot as much money as they can before their terms run dry. Thus, there is no money for the "rainy day" that Keynes was supposedly focused on.
Instead of spending money already saved, governments using Keynesian methodologies turn the printing presses on. This is what Bernanke is doing now, and has done twice. A third time may boost the price of gold and silver in to the stratosphere, while bankrupting elderly middle-class Americans who depend on the interest of their savings to live. The idea is to stimulate the employment market. But neither government nor central bankers can turn around a sour economy. The distortions have to work themselves out over time.
Conclusion: Keynes was doubtless just doing his job, fulfilling his role in the power elite pantheon. Somebody had to provide a justification for central banking and Keynes was the fellow to do it. He was a secretive Fabian, after all; he believed in the rule of the manipulated-many by the clever few. Fabianism is all about lies and deceit; so he did what was necessary, but that doesn't mean he believed a word of it.
Posted by oldman67 on 07/31/11 08:28 PM
Posted by oldman67 on 07/31/11 08:27 PM
We became slaves to a few internation bankers in 1913 with the signingof the Federal Reserve Act of 1913 and the Federal Income Act the same year.Woodrow Wilson said he had betrayed his country. Both our founders and Ron Paul had warned of the dangers if this was allowed to happen. Meyer Amschel Rothschild said Permit me to issue and control the money of a nation and i care not who makes the laws.
Posted by OF on 07/20/11 04:46 PM
What is it now? Unintended consequences or anglo-american deliberate drive toward chaos?
I wish to remind DB also that no elite has so far survived chaos. All empires have so far fallen and it was always the same reason: arrogance, hubris and overreach.
What I think elites want is order and control and ever more order and control: and THAT is what leads to chaos and self-destruction of the elites in every historical instance.
It is precisely because the elites believe they can control things, they keep killing themselves (granted many innocent bystanders, too. But non-elite individuals do not tend to be much better, in general)
The last elite that thought it would never lose control is the aristocracy.
I do not disagree with your thesis that parts of the anglo-american elite may try to establish a New World Order and a central government.
I think they will utterly fail, though, precisely because of the points you make in above article and they would have failed without the internet, too, as Rome failed through it's debt and it's overstretched government not needing an internet to do so. And a million other examples in history were chaos killed the acting elite and they gained nothing from the new order.
The internet may very well be a wild card in that this time the chaos may lead to a sensible restructuring and a victory for real fair, free-markets.
May. This crisis has the potential to send humanity back forward into some modern version of the middle-ages.
And since this time everybody knows (with the help of the likes of DB) it was with the kind help of the banks, I were very nervous by now, if my name was Rothchild.
They have survived for a long time, granted, but that is because any idiot can do banking. It's easy to make children fit for the job.
The intentional chaos-order-theory has definite weaknesses and most are from exaggeration and simplification.
Now, this is my last comment as I like condescension just as much as I like self-righteous elites.
Posted by Zenbillionaire on 07/20/11 08:28 AM
sez. "Mr. Natural sez"
Posted by Zenbillionaire on 07/20/11 08:22 AM
"Keynes' was a forerunner of modern, forward-looking statistical analysis"
Suggest this is an overstatement. There must be a ay to say he was the father of statistically based economic theory without suggesting he was the father of statistical analysis.
It's also important to mention the mechanistic analytic models developed by Keynes (at least the few I've had the patience to read) are extremely simplistic and very poorly suited to describing complex dynamic systems. This is not necessarily a fault of statistical methods in general (consider statistical mechanics and thermodynamics), it's a fault of the person who chose to apply methods best suited to simple linear systems in order to model and describe complex non-linear ones. Mr. Natural says: "Use the Right Tool for the Job!"
Posted by clark on 07/20/11 02:29 AM
Off topic a bit, sorry, just passing the info along to let others decide. It seems there's a dangerous radioactive cocktail coming down in the rain in B.C. Canada, here's video of an amateur test with a Geiger counter. I suppose it could be fake, I don't know, but it looks real enough:
Click to view link
Posted by James Jaeger on 07/19/11 04:05 PM
"We know that is impossible to make specific projections about the economy and human behavior - except very generally - because once government plans are put into action to address the perceived problems human behavior CHANGES."
Same thing in science: the Heisenberg Principle of Uncertainty. As soon as consciousness interacts with a quantum system, the system CHANGES.
Posted by ranger on 07/19/11 02:08 PM
Gentlemen: The internet has revealed the biggest threat--economic or violent-- any man faces is from the government of his own country. Who is most able to kill, imprison, impoverish, and defraud you? Who has the weapons at hand? Who controls the prisons, the courts, the police, the military, and issues the money? Who has dropped atomic bombs on defenseless civilians, and wipes out weddding parties with drones? Who irradiates you at the airport? Who patrols our borders? Who looted the Social Security lockbox? Need I go on?
Posted by tawny on 07/19/11 01:31 PM
You said it all right here -
'In actuality, of course, regulatory democracies NEVER ever "save." Governments are run by people who are anxious to loot as much money as they can before their terms run dry. Thus, there is no money for the "rainy day" that Keynes was supposedly focused on.'
General Smedley Butler famously said that 'War is a racket.' Well, so are governments,all governments, as the Founding Fathers futiley warned us; so are banks and especially central banks. It's all about fleecing the cash cow public and getting there to do that before some other sociopathic narcissist in a fancy suit who's made it to the top and has the police and taxing powers at his disposal gets there first.
Posted by John Danforth on 07/19/11 12:38 PM
Fractional Reserve Martini:
5 Parts Gin (Collect from bar patron)
95 Parts Air
Whip into froth. Put on patron's bar tab. If patron needs more, reduce gin to 3 parts per hundred.
Posted by John Danforth on 07/19/11 12:34 PM
Deficit drinks. Bring your own bottle, end everyone else drinks it.
Posted by vivek on 07/19/11 11:54 AM
Beyond labels of Keynesianism and Austrianism, it's so simple.
Deficit spending based on compounding interest is unsustainable.
Isn't that the bottom line?
Click to view link
Posted by Dave Jr on 07/19/11 11:33 AM
It has to be a sign of their desperation. If cognizant people don't get it, then maybe an appeal to the drunken idiots will help.
I have news for them. It was the drunken idiots who first called them out.
Posted by John Danforth on 07/19/11 10:41 AM
Well sure, it's a little difficult to keep a sense of humor, with the dire consequences of mass insanity about to make themselves felt.
But it's humor that will unseat the beast. It is scorn, derision, and ridicule that will undo it. The humor will point out that its evil power only stems from impotence, and that it can no longer convince us that we are impotent, to cover up the fact that IT is impotent. The emporers' new suit is nothing but hot air, and what it doesn't cover up is actually looking pretty ridiculous. As dire as the consequences of believing are, all we need to do is to see how silly it is, and we don't need to suffer any more. The whole ridiculous meme will pop like a balloon.
"Keynes really didn't mean for his theories to produce the current havoc. They'd been misapplied, you see." Yeah, and Trotsky was betrayed, too, otherwise the glorious dictatorship of the proletariat would have blossomed into worldwide utopia, right?
Ben Beranke's quivering lip when he has to lie out loud in response to Ron Paul's questions. Still laughing at that one. He is the face of Keynes right there. And Keynes has a tic.
"Be sure to bring a tax attorney" ... and a rope!
"Rampant Free Market Ideology Has Put the Idea of a Mixed Economy 'on the Rocks'" ... Now there's an unintentional confession for ya! It's not just on the rocks, it's been pounded to smithereens. There are smithereens everywhere!
a "socially-minded drink" ... pomegranite-flavored Kool-Aid, sweetened with high fructose corn syrup, colored by FD&C red dye number 2, zested up with LSD and smoothed out with Xanax and Lithium?
"self-described progressive who support veganism ... non-profits ... and the need for government intervention. " The pubs are all non-profit, right? Shouldn't we contact those pubs and ask them if they are non-profit? And demand to know why not, if they are part of this promotion?
"Participants in the bar crawl will receive a picture of Keynes and a recipe. They'll also get an "explanation of his economic model ..." The picture is to be taped onto the backs of the heads of your victims. The recipe is two parts Vaseline, one part crushed glass. The explanation of the economic model: "Lie down, hold still, and shut the hell up."
"If markets and individual actions alone don't produce the results we want as a society, we can take collective action through institutions like government to make adjustments. That's the idea behind a mixed economy." Or, "Enjoying your new life as a toilet slave - you'll like it, whether you like it or not!"
You don't need to understand the theory -- just get more stupider, and obeying orders will seem like so much fun!
Wow, that's some drink! The rainy day must be here. I feel the rain trickling down and filling my shoes!
OK, enough of that. Actually, it's pretty idiotic to broadcast this. The party might get crashed by some who don't think slavery is snarky-cool funny.
Posted by Dave Jr on 07/19/11 08:44 AM
If it is going to be "Keynes" Night at the bar, then it should be all you can drink with an unlimited bar tab.
Posted by rossbcan on 07/19/11 06:26 AM
DB: "human behavior CHANGES"
misleading, containing no knowlege apart from the fact that the only stability force and coercion can achieve is the static state of death. So long as people are alive, they will choose and, there will be change.
more precicely stated: "human behavior ADAPTS" in the direction of maximal survival for the chooser. Power, by coercing choice is seeking their maximal survival at the expense of the coreced. The coreced, by resisting this coercion (doomed if obey) are seeking their maximal survival. The corecer / coerced must and will remain at eternal war until one side no longer exists OR, a balance of power is achieved, protecting the "right to choose", for all.
Choice EQUALS survival, which is why there is change, biased in the direction of survival. You can bank on this. PROOF:
Click to view link
This "balance of power", enforcing the moral legitimacy of "survival for all" was once achieved by the "rule of law", now long rationalized away by predators on the bench:
Click to view link
Pandora's Box, containing war, pestilence and social / economic collapse is wide open and firmly held open by those who intend to profit from the conflict and destreuction of "war of all, against all", as we collectively forsake common interest and civilization (the rules by which we peacefully cooperate for MUTUAL self-interest).
Elites fully intend to be the "last man standing", feudal lords over a scortched earth, the wreckage of a once mighty civilization, destroyed, in essence by forcefully redefining the words, knowlege and concepts required for the most dangerous predator on the planet (man) to coexist in peace and harmony, in the only way possible: By forcefully INSISTING that none be tolerated to be "predator, nor prey" or, KEEP THE PEACE, smite those who initiate aggression, or, if defensive, those who provoked.
This is NOT rocket science...
Posted by Leonardo Pisano on 07/19/11 06:05 AM
The Keynesian system functions very sneakily. It's a perpetual debt that is financed by inflation and taxes enforced by the government. The masses get an "inflation correction" each year to keep them happy and put the fake feeling of becoming wealthier into their minds. The middle class pays for the masses below the line and as long as these benefitting masses are the majority in voting power, this robbery will go on until the music stops. In its core, collectivism is about power centralization in line with central banking.