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I got this email from Robert Reich about John Maynard Keynes can anyone help explain his answer and

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posted on Jun, 10 2012 @ 06:23 PM
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I got this email from Robert Reich about John Maynard Keynes can anyone help explain his answer and or post where in his book he talks about this thank you for answering ?

He didn’t use the word “infrastructure,” which came into general usage
long after the 1930s, but he wrote at length about the importance of
government public-works projects when consumers and businesses failed to
spend or invest enough to maintain adequate demand. You should read his
famous “General Theory…” from 1936 (I believe that was the year).



Thanks for writing.

Hello Mr. Reich my question is does infrastructure spending have anything
to do with keynesianism ? I have looked at the general theory of
employment interest and money by John Maynard Keynes but I can't find
anything about infrastructure do you know if he spoke about this ? Correct
me if im wrong but doesn't Keynes say Government Spending puts money in
the pockets of the Consumers and they spend money in the Private Sector
which will create demand which will create Jobs thank you ?




posted on Jun, 10 2012 @ 11:57 PM
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reply to post by mikejohnson2006
 

Dear mikejohnson2006,

I have nothing against you, you have never done anything to hurt me. Please be assured that I am trying to be as polite as possible.

I assume from the nature of your exchange, that your question involved a class assignment. I am hoping it was for a High School class, but I suspect it was for one of the introductory Econ classes in a state college.

I will provide you with an answer and then I will entertain the possibilty that a brief rant may be the only thing which will enable me to retain my poise for the rest of the evening.

You asked about "Infrastructure." What do you think infrastructure is? Many things, including highways, utility sytems, airports, bridges, etc. Most of these things are financed by the government. This would count as government spending. So you asked if government spending was a subject touched on by Lord Keynes.

You also asked Reich to verify that Keynesianism included the concept that

Government Spending puts money in the pockets of the Consumers and they spend money in the Private Sector which will create demand which will create Jobs
I believe that was the substance of your communication to Mr. Reich, but I can't be sure, my eyes are steaming.

Reich replied to you that your request for information concerning Lord Keynes position on "infrastructure" was impossible to answer since no one in Keynes' time had ever heard the word, it hadn't been invented yet. Mr. Reich reminded (or informed?) you that Keynes wrote quite a bit about government spending through public works programs. Mr. Reich then suggested that you read Lord Keynes' General Theory. Perhaps he thought you would be able to find the answer to your question there.

May I offer a suggestion? It appears you have a copy of General Theory available, you should consider reading it. If you find it excessively complicated, there must be many internet sites that will explain the basics of Keynesianism to you, try there.

Perhaps another suggestion? If you are ever going to look for work in a field that has to do with Economics, or if you forsee your self speaking to someone who works with Economics, please, burn the E-mail you sent and Robert Reich's reply. Never speak of it again. Volunteer for a CIA brain washing experiment to get the memory of this episode from your mind.

Consider. You wrote to Robert Reich. He has served three Presidents and was Secretary of Labor. He's taught at Harvard and Berkley, he's one of the few economists that the national press has gone to regularly for comments and analysis on Economic issues.

And you asked him if government infrastructure spending had anything to do with Keynesianism?? And he replied?????????? Next time you see Stephen Hawking ask him if he thinks gravity has anything to do with physics. Grab Charles Barkley by the belt and ask him if he thinks basketball has anything to do with running.

You got an answer from former Secretary of Labor Robert Reich, and the question you asked was if government infrastructure spending has anything to do with Keynesianism????????????

X!Q#%@X^X#CVGH^(^FTPNGHM*MNH[MNVCXE#%$%&*()+^Q[ I CAN'T TAKE IT!!!! I NEED A DRINK!



posted on Jun, 11 2012 @ 11:27 AM
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I have to echo the thoughts of the poster above, crazy that Robert Reich responded, but props to him.

I will try to help here.

"Public Works" vs. Military, Foriegn Aid, Medicaid, Social Security etc....Public Works are Bridges, Roads, Parks etc. They are projects that often employ large labor forces to complete.

Thus Infrastructure and "public works" have a very large overlap and are in most cases interchangable terms.

The economic theorey is that this type of government spending is more effective at economic stimulas because.....

(1) It employs many people...people who spend the money quickly in many different ways...groceries, rent, gas etc. and these people's spending can sustain other businesses. (vs. save/invest)

In contrast to "Reaganomics" or "Trickle-down" economics where more money is given to fewer wealthy people in the form of corporate subsidies, or tax breaks for the wealthy...where that money is not immediately spent on groceries, rent...staples etc. but rather saved or spent on a expensive singular items....a new expensive luxury automobile, a second home etc.

Of course the theorey in trickle-down economics is that those wealthy individuals will invest that new extra-income rather than save and that those welathy individuals will make those investments domestic and it will result in more jobs...somewhere down the line.

In reality...no one invests or expands a business unless there is DEMAND...and the middle and lower class are the ones that create demand. A business does not hire a 100 new workers because they have more money to spend...they respond to demand...they hire a 100 new workers when folks are buying thier products and they need to expand.

Thus giving banks/businesses/wealthy more money is an odd way way of looking for economic stimulas. Businesses/wealthy individuals will always save that money or invest abroad until they see demand for thier products...which are bought be the middle and labor classes..expand.

Gove the middle class and labor class money and they buy things and drive demand and the businesses hire to expand and those new hires spend and the economy picks up speed.

A certain political party likes to refer to these wealthy folks as "job creators" in hopes of furthering this argument.

That has been repeatedly disproven by history. Trickle-down was once called "horse and sparrow" theorey in the late 1800's...feed the horse enough oats and they will pass through the manuer and the crows can eat what is left


The Bush era tax breaks have been in effect for nearly a decade...all during the economic crisis...how many jobs did those tax breaks for the "job creators" create?

The "Job Creators" take that extra income and save waiting for the right opportunity to invest and then often invest in "rent-seeking" incomes...buy an aprtment building...invest in derivatives...grain futures... rather than widespread quick spending as a large labor force would spend.....immediate living expenses, groceries etc.

Plus money given to "Job Creators" is often invested in other countries since their only motivation is money, not the health of the domestic economy at large...see Mitt Romney's tax returns. A little over half of his wealth is invested abroad.

Infra-structure has a bonus effect beyond the wages being immediately spent in a diverse way and supporting/stimulating other businesses....as that new bridge, improved road, faster tele-communications line...lead to more commerce, transportation of goods, more technically capable cities etc..easier for businesses to make money in the future.

Thus a Keynesian would argue that infra-structure spending stimulates the economy in a quicker, more reliable way via a large labor force that spends on necessities and has a bonus effect of having future benefits to businesses in the form of improved infra-structure.

This is still hotly debated and is thick with partisan ideology, but I would recommend researching a bit on your own and coming to your own conclusions.

edit on 11-6-2012 by Indigo5 because: (no reason given)



posted on Jun, 28 2012 @ 03:55 PM
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As for Keynes the man, from what we know, he seems to have cut a pretty despicable figure: arrogant, racist, a shameless thief of other people’s ideas, an exploiter of the underclass (for male prostitutes), and a speculator. But more to the point, as a theorist, he was a total nullity: he is the dottore of the commedia dell’arte, the pedantic character who knows everything without understanding anything thereof.

This man, who had been hailed by Time magazine in 1999 as one of the towering gods of the 20th century, failed miserably to comprehend every major event of his time: 1) Versailles, case in point; 2) Britain’s return to gold, which he denounced as the inane archaism that caused the great strike of 1926 [it was neither the former nor did it cause the latter]; 3) the coming and severity of the Slump; and 4) the Nazi recovery. As for Versailles, he did not have a clue as to what was being devised: he stormed out of the conference moaning that Germany could not pay what was asked of her, not intuiting, as Veblen did, that those astronomical sums were never meant to be paid, but only, through the first series of “gold installments,” to burst the bubble of the German war debt.

And then in 1941 (if I remember correctly) to crown his remarkable dramatic career he was made a Director of the Bank of England; yes, imagine him, gloatingly gabbing away at the very feet of the High Priest, Montagu Norman…That’s Keynes, the great Keynes, the champion of the enlightened middle-class.




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