American Elephants


Here’s the Response to the True Believers’ Faith in Elite Control by The Elephant's Child

http://wonderfulloaf.org/

This is a perfectly charming video, beautifully illustrated, of a poem by economist Russ Roberts explaining how things work in the story of a wonderful loaf of bread. The perfect answer to the depressing video below of the climate march. Who knew that economists could write poems?

Thanks to Don Boudreaux of Cafe Hayek,

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Unlearning Keynesian Economics: by The Elephant's Child

Economist Russ Roberts writing at CaféHayek.com, December 20.

When I was younger, everyone knew that the New Deal had saved the US economy from the ravages of the Great Depression. Everyone knew that Keynes was right—look what had happened when Roosevelt implemented his ideas—the Great Depression ended! Eventually, everyone knew that story was false. The New Deal wasn’t that big and the Great Depression didn’t really end when the New Deal was implemented.

Now everyone knows that World War II ended the Great Depression. Of course, private consumption fell during WWII and the vaunted Keynesian multiplier seemed to only work for the defense industry. Someday, perhaps, people will understand that when a war takes over most of the industrial sector, you don’t get much stimulus. And it’s not hard to reduce unemployment when you force a huge chunk of the male working-age population into the army.

When the war ended, all the Keynesians predicted disaster and a horrible depression because of the cuts in government spending and men coming home from Europe and the Pacific. Well, when that didn’t happen, people should have known that there isn’t a simple relationship between government spending and prosperity. But somehow, people didn’t learn that lesson.




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