Among the least ignorants, I can name a few Keynesian Bouffons who saw the problem coming, but who are still advocating deficit spending and government intervention to ensure that people keep on borrowing and spending — trying to put us back on the exact same track that lead us to jump of the cliff, because that path is unsustainable. These are the Nouriel Roubini, Joseph Stiglitz, and today, I am sad to add Gary Shilling: the first Keynesian Bouffon to understand that we are in a full fledged deflation. Here you can find two video clips of his interview on TechTicker and here (They don't seem to be embeddable).
The interview is very interesting because it exposes the deflationary environment very clearly, but then draws all the wrong conclusions of the Keynesian bouffons. Gary Shillings thesis is:
- Deflation's Coming, Says Gary Shilling, And It's Going To Clobber The Stock Market
- Obama and Bernanke didn't understand the depth of the problem, and should do more
Joseph Sigtliz goes on with the same opinion that Obama should do more — like every Keynesian Bouffon, the stimulus failed because it was too small — and will contribute to dig us deeper into the whole:
Aug. 6 (Bloomberg) -- Nobel Prize-winning economist Joseph E. Stiglitz said the U.S. economy faces an “anemic recovery” and the government will need to enact another round of “better designed” stimulus measures.
The Obama administration took “a big gamble and it doesn’t look like it’s paying off,” Stiglitz told Bloomberg TV in an interview in Sydney yesterday. “The recovery is so weak that it is not strong enough to generate new jobs for the new entrants in the labor force, let alone to find jobs for the 15 million Americans who would like a job and can’t get one.”And also Shiller, another one of those academics who saw the real estate and Internet bubble, but who is now turning to his god, FDR for a solution (see Op-Ed in the NYTimes) and he goes on and on about how great stimulus is, and concludes that we should more and more:
What Would Roosevelt Do?And finally, this amazing clip from CNBC's Squawk Box featuring David Rosenberg — one of the few economists working in the financial industry who makes sense:
ACROSS the United States, thousands of federally financed stimulus projects are under way, aimed at bolstering the economy and putting people to work. The results so far have not been spectacular.
Why not? There’s nothing wrong with the idea of fiscal stimulus itself. We need more stimulus, not less — but we need to focus much more on actually putting people to work.
Basically, Rosenberg's point is that we're deflating, that the markets are highly overvalued and that it doesn't make sense to compare the current depression with the past few post-war recessions, because all of them were occurring during a credit inflation.
Opposing his view, you have another duo of crazy market cheerleaders, worshipping Bernanke and talking about GDP numbers.
Nobody believes in a double-dip recession, although they don't even know what they're talking about.
So what's my point given the title of this post? With so much destructive ideologies, Keynesianism, wars, poverty expanding, religious threats, aren't we headed for a second Dark Ages period?
"Dark Ages" is a term referring to the perceived period of both cultural and economic deterioration as well as disruption that took place in Western Europe following the decline of the Roman Empire. The word is derived from Latin saeculum obscurum (dark age), a phrase first recorded in 1602My point is that I've been digging during the week-end in old stuff. When I mean old, I mean really really old: the XVIII and XIX centuries. The period called the Enlightenment. The Frederic Bastiats, Alexis de Tocqueville, Thomas Jeffersons of those days.
Are we headed for a new Dark Ages period? My conclusion is that we already are in the 2nd Dark Ages, and we'll get out of it only once Keynes is dead and fallen into oblivion, and that we are back in a free society, with a sound currency.