Feb 122010

It’s patently clear from reading through Tony Makin’s Op-Ed in the Oz today, that as a supposed economic Professor at Griffith University he is most definitely NOT in the Keynesian camp.

Economics, as any banker will tell you, is not a science by any stretch of the imagination, any more than holding a uni degree in the subject makes one an expert prognosticator. Your average unwashed Joe or Joelene, by taking careful note of daily fiscal activities in business, industry, foreign exchange markets and central bank commentary can educatedly guess at what a given economic outcome from any given situation might be. Economics, as so often been proven in the recent past by so-called educated pundits telling us what the RBA will & won’t do with interest rates, is more about bull-shitting the uninformed than accurately forecasting the future.
Keynesianism – the general philosophy of government intervention into fiscal markets by way of spending to deficit – has it’s place. Just as the Milton Friedman or Irving Fisher view has its place during periods where government intervention into financial markets is the worst possible outcome for a nation’s economy. Blind Freddy can tell you that spending into unrecoverable debt can only end in tears. Keynesianism is a necessary, but short term solution to be applied prudently, as any fiscal measure should be applied. As with all things in this existence, moderation rules. One need only listen to Glenn Stevens, Ken Henry and Lindsay Tanner to gain an understanding of where Australia’s economy is at any given point in time, and the stimulus wind-back & recovery plans the government already has in place.
I note that Mr Makin makes absolutely no attempt at suggesting alternatives to the government’s Keynesian response to the GFC. I think this bears out my ‘grain-of-salt”approach to most things in the Oz. As with pretty much everything which appears in the Oz, one must realise that there is always an ideological bent behind the articles and/or the person writing.