- No civilized society could leave people destitute. It was not morally right
- The same principle Keynes advocated applied to them too. Give them money, they will spend it out of necessity, and that will help to keep the factories running.
Friday, May 15, 2009
Governments have given trillions of dollars to banks in the last few months, yet our economies are still shrinking. The banks are not lending the money, they are using it to cover the bad debts—the so-called toxic loans—they set up in vast numbers to reward themselves with outlandish bonuses. The idea of governments giving away money is supposed to be Keynesianism, the idea had by John Maynard Keynes that only by getting people back to work by large government spending projects would the long depression of the twenties and thirties be overcome. US President F D Rooseveldt tried the policy with the New Deal, and it worked. People got a job, spent the earnings they previously did not have, so shopkeepers sold their goods, and factories had to start making them again. It was a multiplier effect! Adolf Hitler also tried the policy in severely depressed pre War Germany by pouring government money into military projects in preparation for the second world war, and he also found it worked. Unemployed workers were building roads, aeroplanes and ships, spending their money in shops who wanted supplies, and so factories outside the military had to resume full production. Keynesianism works! But it depends on ordinary workmen being employed by the money the government spends. The government money has to go to people to employ them. Merely giving it to banks who then keep the money to cover for their own ineptitude does not employ anybody except the incompetents whose greed created the problem in the first place. Governments should not have given money to banks at all, but directly to the poor. Favouring the rich, just convinces us at the grass roots that governments are there to bail out the dolts and nincompoops using our money to make themselves richer, when their get rich quick schemes fall flat. Rooseveldt called the bankers “banksters” to imply they were “banking gangsters”, and if one of the few great presidents thought bankers were gangsters then it even more true now. In the UK, the Brown, supposedly Labour—that is as in labourer!—government has been bringing in a mass of repressive legislation similar to the Patriots Acts in the US, allegedly directed at terrorists, but ready to be used against anyone they choose to label as a terrorist, like anyone rioting because they are unemployed and forced on to workfare—another oppressive British law in the new welfare reform act. It shows the unscrupulous class nature of the New Labour Party. Keynes realized that not everyone could work! Always some people were too ill, disabled, unskilled or too simple, and some were always unwilling to work for whatever psychological reason, yet these people could not be left unprovided for. There were two reasons for it: