Keynesian Crisis

Keynesian economics was an innovation for organizing production so that growth, success in the marketplace, could still be measured by the profit margin in the classical economic sense.

Monetarism allows the measure of legitimate success of the classical model into the neo-classical world of managing cyclical crisis that does not necessarilly produce legitimately pluralistic, free-market results measured by the profit. It allows for maximum profit with minimal growth, and a way to "successfully" manage the instability that causes.

The promise of the new technique for stabilizing the economy was to calibrate the money supply as needed to control inflation with growth, what a free market will achieve on its own if the capital, industry and markets are not allowed to consolidate.

If capital is always available for investment in profitable markets (buying the greed), the economy can grow with adequate supply to control inflation, and that added supply requires full employment, thus, full employment with low inflation. The effect is a declining rate of profits and return on investment that minimizes an accumulation of wealth and an income-class distinction. Aspiring to the "ruling class" requires a return on investment ensuring a free-market economic through the monetary system denies.

Monetarism was invented to largely stabilize the business cycle of a consolidated capital. It was not invented to finance the competition, but to provide liquidity (interbank lending) when the capital becomes so consolidated that it locks up and has nowhere else to go but to be redistributed to the consumer (spreading the wealth around) to reduce the inventory of overproduction. Rather than finance the competition, causing full employment with low inflation, the recovery is monetized (trickled down) through the central bank system and the treasury, allowing the consolidated capital--the problem--to persist.

The process of economic stimulation and stabilization we have now is the "monetizing of the debt" so that it is not quite as obvious that the business cycle operates to consolidate the capital. Consolidation is antithetical to a free-market legitimacy in which power is sufficiently pluralized to be self-correcting and requires little need for government regulatory authority.

Since monetarism is not used to pluralize, but stabilize the marketplace, there is a big demand for government. That demand has evolved in favor of consolidation of the marketplace, so we have The People's tax money being given to a healthy bank (PNC Bank) to buy an unhealthy bank (National City Bank). Public finance, and the power of legitimacy it represents, is used to consolidate, and not just the accumulated capital. The return on the investment comes in the form of the interest paid on the public debt which, you may have noticed, is a perpetual-debt (leveraging) machine that grows infinitely if it is paid with a regressive tax code.

Keynesian monetarism is easily switched to finance a genuine free-market economic system. The way it is being used now to keep the capital, industry and markets consolidated through an unstable business cycle, "the switch" will eventually become the socialist alternative.

Avoiding a global liquidity crisis, and general instability, is entirely possible. It is time for the political will to do it.

Obama/Biden 2008!