Leo D.M.J. Aurini - Aurini's Insight： The Correlation of Liberalism & Keynesianism

00:00:00.000 music

00:00:02.440 music

00:00:10.420 music

00:00:16.740 music

00:00:28.600 Hey, folks. This episode of Irini's Insight is brought to you by Carl Ushanka, who wants

00:00:40.040 me to address the issue of why it is that Democrats and Keynesian economics seem to

00:00:48.040 go together like peanut butter and jelly. Before I get to the topic, however, I want

00:00:54.020 to tell you about who Carl Ushanka is. If you're not familiar with him, he has an excellent

00:00:59.260 blog where he tracks Marxist influence in Western civilizations. And he is also the manufacturer

00:01:06.700 of Glorious Hat, more properly known as the Commie Obama hat that you can see right there.

00:01:12.980 Now I've told you about this hat before. It is incredibly warm. It looks great. It's going

00:01:21.280 for $22 and change right now, I believe, on his website. And from, you know, from a fashion

00:01:28.660 accessory standpoint, it really makes you stand out. Now it's not too flashy, you know, it's

00:01:36.240 not quite up there with the cowboy hat, but it looks really good. And it's subtle, it's

00:01:42.620 formal, but it makes you stand out. It makes you look like a professional, like an adult.

00:01:48.620 It has those hilarious plates that are interchangeable in it. And those come out for to just be a

00:01:54.020 regular hat that you can wear to the office. I don't have it with me because I thought Mojave

00:01:59.120 would be a little bit warmer than it is right now. But I do need to get it back for next

00:02:04.960 winter. Amazing hat, link down below. And full disclosure, I gave Carl a 50% discount since

00:02:13.120 he sent me the hat pro bono back in the day. And for every hat that you guys buy, he's going

00:02:19.800 to send me a few bucks. So, help keep me in ivory backscratchers by buying yourself a great 0.97

00:02:26.200 hat. CommieObama.com, link down below. Alright, so, to the video itself. Now, he asked me not

00:02:38.120 not to do an overly detailed factual lecture, but to do an Irini-style video on this topic.

00:02:45.840 And I think he knows what, I think I know what he means. I'm pretty sure most of us are fairly

00:02:50.880 familiar with the basics of Keynesian economics. The real question is, what patterns, what overall

00:03:01.120 styles are so similar between the Democrats and the Keynesians? And, um, furthermore, I'm

00:03:09.760 going to do one better with this video. I'm going to explain this in an even-handed manner.

00:03:17.800 Now, you folks that know me, you know typically that when I discover that somebody is arguing

00:03:23.840 disingenuously, when they're lying, when they're not being a decent human being, I tend to go 0.63

00:03:31.320 for the throat. And I'm really not a fan of the Democrat party because it is chock full 0.89

00:03:36.400 of disingenuous arguers. But I'm not going to do that this time. I'm going to be completely

00:03:42.940 even-handed and treat the Democrats as what they say they are. Because the fact that I can

00:03:49.580 prove that what they say they are is innately destructive is a better argument than proving 0.98

00:03:55.880 that the Marxist scumbags that actually occupy the party, proving that those people are destructive. 0.96

00:04:02.060 No, no, what Democrats say they are is bad enough. Now, the first thing we need to discuss 0.99

00:04:09.160 is what is Keynesian economics? You know, and this is not going to be a hugely in-depth discussion.

00:04:16.540 If you really want to know more about this, I suggest Mises.org. I suggest you address the

00:04:22.760 original text because, you see, economics is one of those things. It's part of the nature

00:04:30.200 of reality is that systems built off of very simple rules can wind up having incredibly,

00:04:39.020 infinitely complex results. And economics is one of those cases. Economics is so simple

00:04:45.400 at the 101 level. And yet, as you explore it more and more, it becomes very... you discover

00:04:52.780 things that are very counterintuitive. You see this progression of chaos theory. You see

00:04:57.820 these high-level patterns forming. So if you really want to get into it, it's not something

00:05:02.940 I can put into a video like this. You need to go study it for yourself. Now, that said,

00:05:10.300 we can explain Keynesian economics fairly well by contrasting it to Austrian economics.

00:05:17.680 And again, I'm completely oversimplifying both these theories. But at the end of the day,

00:05:23.060 the difference between good and noble Austrian economics and the dirty, filthy Keynesian economics

00:05:30.480 is that while both of them acknowledge supply and demand and, you know, elastic trading curves, et cetera,

00:05:41.160 Austrian economics holds that the wealth of an economy, the health of an economy, ultimately boils down to

00:05:49.240 production, while the Keynesians argue that it's about consumption.

00:06:00.960 As a result of this, if there's an economic downturn, you know, if there's a period where

00:06:06.460 people are having trouble finding jobs, where prices are going up, where there's just a lot of

00:06:12.680 economic turmoil, a lot of unhappiness, of poverty appearing in a certain era, if you speak to an

00:06:21.140 Austrian, what they'll say is that, well, there's a lot of malinvestment. Over the past 5, 10, 20 years,

00:06:28.820 we invested all of this money building infrastructure that, as the Native Americans would say, that

00:06:36.240 didn't grow corn for us. You know, like we built all these farms that turned out to be on completely

00:06:42.460 useless land and we can't grow anything with them, or we built all these houses that nobody wanted to

00:06:48.440 live in, or that weren't very well built, so on and so forth. We had bad investments and our production

00:06:56.220 suffers. And so the solution to right the economy is to help production occur. The Keynesians, meanwhile,

00:07:07.680 argued that it's consumption that drives the economy, that there's not going to be any production

00:07:13.580 if there's no consumption. So imagine you have a factory. You own a factory that builds widgets,

00:07:21.740 and there's an economic downturn. All of a sudden, nobody is buying widgets anymore.

00:07:25.900 You, as the factory owner, you're going to reduce the output of your factory. You're going to stop

00:07:32.520 producing as many widgets because the price people are willing to pay for widgets is plummeting.

00:07:37.620 And you'll be laying a whole bunch of people off, and then that just exacerbates things,

00:07:41.040 because now those people you just laid off can't buy widgets anymore. So the Keynesian argues that

00:07:47.040 it's the consumption. And so during an economic downturn, what you need to do is you need to pump

00:07:54.320 money into the economy. You need to loosen lending practices. You need to reduce the interest rates

00:08:03.140 so that there's more lending happening, so that these unemployed people can pull out their credit

00:08:07.860 cards and go buy widgets. And that will stimulate your factory, and that will cause you to hire more

00:08:13.780 people, and then the economy will right itself. These are two completely contradictory theories of

00:08:22.160 economics. You cannot have both of these. You see, with the Austrian arguing that it's the production 0.82

00:08:32.140 that's the problem, it's that we didn't produce the right things. You know, we spent all of our

00:08:37.920 investment capital on useless boondoggles, on bridges to nowhere. Now the problem is, well, how do we build

00:08:46.600 something useful? You know, no one person, and this is the whole free market principle, is no one person

00:08:54.240 has enough knowledge, has enough wisdom, to figure out what the correct investments are.

00:09:04.880 You basically need perfect knowledge to make the correct investments, and no one person has that.

00:09:11.920 You know, you could spend half of the GDP on economic analysts to go study things and try and figure out

00:09:19.200 where to put them. It's not going to give you the right answer. It's the wisdom of crowds. You know,

00:09:24.980 like we used to say in the army, you know, who's smarter? You know, the sergeant or the platoon?

00:09:32.280 The platoon full of privates? Well, the platoon's smarter because there's 30 of them. That's why a good

00:09:37.860 leader always listens to their subordinates. It's the wisdom of crowds. And so if this is the issue,

00:09:45.360 if the issue is that we spent money poorly, we wasted money, and now our infrastructure is failing,

00:09:52.260 and that's hurting our production, giving consumers a whole bunch of money is not going to improve that

00:09:59.140 production. You know, it'll give a little bit more business for certain things, but it will also

00:10:04.780 suck credit out of the investment side of things. So now, the Keynesian assumes that the business

00:10:15.000 environment is doing perfectly fine. You know, all the factories are running tickety-boo. The problem

00:10:20.180 is nobody's buying from them. The Austrian is saying that the companies are the problem. The companies did

00:10:26.440 not invest properly. And taking the credit and giving it to consumers is not going to fix the fact

00:10:32.760 the companies had malinvestments. So, completely opposite theories.

00:10:42.240 And the explanation, there's a little metaphor that is very apt, because now, like, I'm sure some of you,

00:10:49.180 if you haven't heard of these theories before, are saying to yourselves, well, these both kind of sound

00:10:53.880 plausible. All right, well, let's simplify this. And the Keynesians hate this, by the way. They hate when

00:10:58.920 you simplify things. You know, it's, quite frankly, running a nation is no different than running a

00:11:05.280 household. You know, you have so much money coming in, and so much going out. And if you're in the

00:11:11.140 red, then that bodes ill for you. The Keynesians like to argue that you can play all of these money

00:11:16.420 games, but even, and I swear to God, if John Maynard Keynes could see what these people were doing,

00:11:23.020 he'd be disgusted by it. Because even Keynes himself, and his theory, I would argue, is

00:11:29.340 incorrect, he did not advocate playing this, uh, this shell game with money like we're playing

00:11:35.960 nowadays. You know, he argued that, yeah, you need to bump up the consumers temporarily, but that

00:11:41.600 doesn't mean you play hide-and-seek with money, that you start printing tons and tons of money and

00:11:47.800 selling it to the Chinese to cover up the fact that our own manufacturing base is falling apart.

00:11:51.380 No, this is just an issue of dishonesty right there. You know, the fact that we want to have

00:11:56.800 our cake and eat it too. We don't want to be responsible for the debt we accumulate. You

00:12:03.920 know, that's a whole other issue. It's exacerbated by Keynesianism, but it's above and beyond what

00:12:11.240 Keynes himself advocated. So these are the guys that really hate when you simplify things,

00:12:19.940 because they're playing money games. You know, in a certain sense, Keynesianism is just a cover

00:12:26.800 for them to get away with playing money games. But nonetheless, let's ignore the money games for

00:12:34.260 a moment. That's just dishonesty. That's lack of morality. That's lack of individual responsibility.

00:12:40.620 And the reason that these high-level bankers, these one-percenters, the reason these guys get away

00:12:45.220 with it is because us as a civilization, we don't want to be held responsible. You know,

00:12:50.700 we get useless university degrees, and then we want the government to bail us out because, well,

00:12:55.760 it wasn't my fault. I got tricked. Well, yeah, you did get tricked, but guess what? You're still

00:12:59.860 responsible. You know, it's because we're all immoral and narcissistic that this one percent 0.96

00:13:07.940 can get away with these huge crimes. It's because we're all doing little crimes, and we don't want to

00:13:12.640 be held responsible. We don't want the light of truth. So, anyway, side issue. Let's get back to

00:13:19.640 Keynesian versus Austrian. And the thought experiment goes like this. Now, imagine there's a bunch of 0.98

00:13:31.220 people on a desert island. You know, say a plane crashed. And you've got a Mexican that is very good

00:13:41.520 at tilling crops. And you've got a Chinese fellow. And this guy's very good at fashioning, you know,

00:13:49.960 the wood and rocks into tools and implements. And you've got an Indian who's very good at taking the 1.00

00:13:57.760 grass and reeds of the island and fashioning it into clothing, into hats so you don't get sunstroke,

00:14:03.840 so on and so forth. So these three guys, they set up an economy with one another. You know,

00:14:11.420 the Mexican works on gathering and farming food. The Chinese guy, he works on building tools and 1.00

00:14:18.800 building some huts for them to live in, while the Indian guy starts making clothes for everybody. 0.99

00:14:24.200 Suddenly, you've got this little micro economy going. And the more production you have,

00:14:29.860 the better off everybody is. The more food the Mexican grows, the better fed everyone is. The

00:14:35.400 more tools that the Chinese guy does, the better everybody else works, and the more resources there 0.95

00:14:43.120 are. And the same thing with the Indian guy. If you've got good clothes, you know, you're sheltered 1.00

00:14:46.840 from the rain, the sun, wonderful. Everybody is happy. See, an Austrian looks at that scenario 1.00

00:14:54.580 and says, well, how can you make it better? Well, you can increase production. You know,

00:15:01.060 like, if an Austrian were to advocate some sort of stimulus, it would be a stimulus to business.

00:15:10.120 The Austrian would say, you know what, let's do an airdrop of some water and some MREs.

00:15:16.760 That way, you know, the Mexican, instead of focusing on going to get a whole bunch of coconuts, 1.00

00:15:23.240 I don't know if you guys can hear that, but it's a bit noisy. So the Mexican, instead of focusing 1.00

00:15:27.200 on getting a whole bunch of coconuts because they're going to starve tomorrow, with the water

00:15:31.500 and MREs, he can go and focus on tilling a field. You know, they'd advocate this investment

00:15:38.400 in the industry. Whereas the Keynesian, if they're going to argue, if they're going to argue for an

00:15:46.500 investment for a stimulus, what they're going to argue for is another mouth to feed.

00:15:57.320 See, to argue that consumption drives the economy is like saying, if you took these three guys,

00:16:04.060 the Indian, Mexican, and the Chinese man, you took them and you added one more person, 0.98

00:16:08.400 you add a fat American. And this fat American demands that they all produce extra goods and 0.99

00:16:17.320 services for him. And in exchange, he provides entertainment, the service economy, what have

00:16:24.500 you. The idea that this higher consumption is going to make everybody work even harder.

00:16:32.300 Now, I ask you folks, does that sound like an increase in wealth to you?

00:16:40.500 This demanding this higher consumption, does that sound like an improved economy to you?

00:16:52.740 Keynesianism, although it can make a little bit of sense at first, is ultimately upside down

00:16:59.680 and backwards thinking. So now the next part of the question.

00:17:08.140 Why is it that Democrats are so attracted to Keynesianism, while Republicans tend to lean

00:17:16.100 more to the austerity side, the Austrian side of things?

00:17:20.600 Well, it goes to the basic psychologies that make up the two parties. Now, a while back,

00:17:29.640 the Democrats were pushing this new study that showed that Republicans feel more fear. Now,

00:17:37.420 you could have equally well described the study as saying that Democrats show more signs of

00:17:42.560 psychopathy, but that's neither here nor there, because it's absolutely true. Republicans do feel fear.

00:17:48.520 Anybody that is aligned conservative or libertarian, you know, on a deep emotional level,

00:17:56.980 tends to feel a lot of fear. You know, when I drive down the road, and I absolutely love driving,

00:18:03.560 folks, I am constantly aware of the fact that I have my life in my hands, and not just my life,

00:18:10.460 but everybody else's life on the road. You know, even though I maintain my vehicle in tip-top

00:18:15.600 condition, I don't have perfect knowledge. I can assign a very high probability that a tire's not

00:18:21.360 going to blow, but I can assign a perfect probability. And I'm aware of the times when

00:18:28.700 there's a lot of traffic, say there was a pileup on the road ahead. You know, or say if I'm passing

00:18:34.700 somebody in the middle of the night, and I shoulder check, that could be the moment a deer runs out in

00:18:40.800 front of the road. Yeah, I am aware of these dangers, and I cope with them. You know, I'm not having a

00:18:45.680 panic attack, but I am very afraid. Similarly, the association, like, conservatives tend to be

00:18:54.360 homeowners and family men. And when you own your own home, you have something you could lose.

00:19:02.360 When you have your own family, at least so I've been led to believe, you are just absolutely

00:19:10.680 terrified of losing your children. Because they are so incredibly important to you, that even a one

00:19:18.180 in a million chance of your children dying is enough to make you afraid. So yes, the conservatives are

00:19:26.480 based upon rational fear. And it is a rational fear, because these are the same people that serve

00:19:33.180 in the military. Okay, it's about being able to overcome your fear, but also being aware of the

00:19:41.820 dangers, realistic about the dangers. So as a consequence, the Republicans are conservative.

00:19:50.660 They recognize just how dangerous this world is, just how many ways things could go wrong. And so

00:19:57.480 they're very hesitant to upset the boat, or to do something crazy. You know, and if something does

00:20:05.920 need to be done, they want to do something very basic, very simple, and very obviously good.

00:20:13.480 Now the Democrats. And like I said, I'm going to be even-handed in this video. I have a very low

00:20:22.160 opinion of Democrats, but I'm going to be nice. The Democrats, because they don't feel as much fear,

00:20:30.400 they're more likely to seek out novelty. To go to a crazy club, and, you know, listen to all the new

00:20:39.920 music, and have all sorts of crazy sexual partners. And the Democrat, because they're not afraid 0.99

00:20:47.100 of starving to death. They don't, like the conservative is aware of the fact, let's see,

00:20:53.500 if I lose my job, you know, I have my mortgage payment, and these people depend on me, and

00:20:58.920 etc. The Democrat is less worried about that. They're more adventurous, although for some strange

00:21:06.980 reason they don't join the military. I'm sorry, I'm sorry, I said I was going to be nice. The

00:21:13.660 Democrat, because they're not afraid, they want to try out novel things, and they're always looking

00:21:20.800 for solutions. The Democrats find solutions to problems that don't even exist.

00:21:27.060 And so, this is what leads them to being attracted to Keynesianism.

00:21:41.420 See, the Austrian economics, you know, and it depends how strict you are. You know, if you are

00:21:48.780 very strict Austrian, you say the government should never invest in the economy. It should never

00:21:55.580 interfere. That if there is an upset, if there is a recession, the best way to fix it is to leave

00:22:03.420 it alone. Let people make their own decisions. Let people come up with their own plans. Let the

00:22:09.840 economy solve itself. So that's hard Austrianism. But there's also soft Austrianism. And this is what

00:22:19.160 you see with President Hoover. Now, President Hoover, a Republican, just an absolutely amazing

00:22:26.820 man. He was an, I believe he was a mechanical engineer. If you ask me my favorite president,

00:22:33.380 it's probably Hoover. This guy traveled all over the world. He set up a whole bunch of, I believe it

00:22:39.940 was, like, not just water wells, but entire sewage systems in Africa. His wife was with him. And she

00:22:48.340 was a big, you know, like, not the modern, like, charity awareness raising garbage. But she actually, 0.88

00:22:55.780 like, took part in trying to educate people, get schools going. Again, I'm just speaking from memory,

00:23:02.980 you know, go, go read the Wikipedia on, on Hoover if you want to know more about him. Absolutely amazing

00:23:09.700 guy. And then he gets hammered with the Great Depression and absolute panics going on throughout

00:23:17.280 society. Now, if you speak to a strict Austrian, they'll point out that there was a, an economic dip

00:23:22.940 about 10 years before that, that would have been just as bad, except nobody cared, and it corrected

00:23:28.840 itself in about three to six months. And they would argue that Hoover's response did wind up

00:23:34.820 exacerbating the, the, it turned, it turned a recession into the Great Depression. It's maybe

00:23:42.140 not entirely fair, since there were other effects happening. There was the, the dust bowl in the

00:23:46.640 Midwest that was killing crop production. And, and there was a number of other similar factors going

00:23:53.720 on in Europe with major trading partners. So it was basically the perfect storm. But whether

00:23:58.820 or not you agree with Hoover's response, whether or not you say it was misguided or not,

00:24:04.680 I think it's worth looking at what that man did. Hoover's response to the Great Depression?

00:24:12.640 Build the Hoover Dam. You know, I was just visiting that, that thing a couple, about a week or so ago,

00:24:19.380 and it is an amazing feat of engineering. It blows me away. It is literally built into the side of the

00:24:26.900 mountain, organic with the mountain, and just the size of it is stunning. Hoover's solution to the

00:24:36.680 Depression was, well, we need to get industry going. Let's build a giant hydroelectric dam. Let's build

00:24:45.160 something that's completely ridiculous and stupid and awesome. If we're going to spend money on the 1.00

00:24:52.280 economy, let's build something amazing. Let's build a bit of infrastructure that is useful and needed.

00:25:04.280 Versus his, uh, his follow-up.

00:25:08.040 See, with the Democrats, they're more interested in intervening with the economy. And see, here's the

00:25:21.640 thing. Austrianism, again, you've got hard and soft. Hard says never invest in the economy. Soft says,

00:25:29.300 well, if you're going to invest in the economy, try and build something useful. Keynesianism always says

00:25:39.060 invest in the economy and do it by giving people cheap credit. And so when you have the psychology

00:25:49.060 of a Republican that's very cautious, that's very fearful, that knows the world is dangerous, if they're

00:25:54.660 going to invest in the economy. They're going to invest in hard and useful infrastructure. Not bridges

00:26:01.940 to nowhere, but stuff like the Hoover Dam. Whereas the Democrat, who is always looking, they have so

00:26:09.860 many solutions, they just need to find the problem. Keynesianism gives them that problem. With Keynesian

00:26:16.580 theory, everything is an excuse to intervene in the economy. Every downturn, not even a downturn in the

00:26:24.260 economy as a whole, but a downturn in this one little sector, you know? It's like, oh, horses and

00:26:30.020 carriages are going down. Well, automobiles go up. But, oh, well, we need to invest in that. We need to fix

00:26:36.420 that. Look, I have a solution right here. I have a thousand solutions. Let's try this one. Keynesianism

00:26:43.540 constantly gives them an excuse to intervene in the economy. And the Democrats just don't stop to ask

00:26:51.380 themselves, is this really necessary? Is this really such an emergency that I need to be intervening?

00:27:00.500 No, the Democrats are chock full of solutions. You know, they are chock full of all these brilliant

00:27:06.900 ideas that they want to push on us. And they're just waiting for any problem to happen. And an economic

00:27:13.780 theory that tells them that there's a lot of problems that they should be fixing all the time,

00:27:20.100 well, you just told them exactly what they want to hear.

00:27:27.620 So that is why you have that connection between Democrats and Keynesianism. They are both systems

00:27:35.700 that are constantly trying to try out new solutions with no regard for the dangers that are present

00:27:45.060 or for the fact that things seem to be working pretty bloody well.

00:27:50.180 And if any of you have net neutrality on your mind right now, that's a pretty good example of it.

00:27:56.660 Anyway, Carl's blog is linked down below. It is an excellent, excellent accumulator of stuff in the news,

00:28:05.700 so go check it out. And also, glorious hat. It looks great, it keeps you warm, and it pisses off Democrats.

00:28:14.100 Arrini out, folks.

Leo D.M.J. Aurini - March 06, 2015

Aurini's Insight： The Correlation of Liberalism & Keynesianism

Episode Stats

Summary

Transcript