Aurini's Insight： The Correlation of Liberalism & Keynesianism
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Summary
In this episode of Irini s insight, I discuss why Keynesian economics and Democratic economics are so similar that they go hand-in-hand like peanut butter and jelly. And why is it that the two are so alike?
Transcript
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Hey, folks. This episode of Irini's Insight is brought to you by Carl Ushanka, who wants
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me to address the issue of why it is that Democrats and Keynesian economics seem to
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go together like peanut butter and jelly. Before I get to the topic, however, I want
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to tell you about who Carl Ushanka is. If you're not familiar with him, he has an excellent
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blog where he tracks Marxist influence in Western civilizations. And he is also the manufacturer
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of Glorious Hat, more properly known as the Commie Obama hat that you can see right there.
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Now I've told you about this hat before. It is incredibly warm. It looks great. It's going
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for $22 and change right now, I believe, on his website. And from, you know, from a fashion
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accessory standpoint, it really makes you stand out. Now it's not too flashy, you know, it's
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not quite up there with the cowboy hat, but it looks really good. And it's subtle, it's
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formal, but it makes you stand out. It makes you look like a professional, like an adult.
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It has those hilarious plates that are interchangeable in it. And those come out for to just be a
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regular hat that you can wear to the office. I don't have it with me because I thought Mojave
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would be a little bit warmer than it is right now. But I do need to get it back for next
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winter. Amazing hat, link down below. And full disclosure, I gave Carl a 50% discount since
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he sent me the hat pro bono back in the day. And for every hat that you guys buy, he's going
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to send me a few bucks. So, help keep me in ivory backscratchers by buying yourself a great
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hat. CommieObama.com, link down below. Alright, so, to the video itself. Now, he asked me not
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not to do an overly detailed factual lecture, but to do an Irini-style video on this topic.
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And I think he knows what, I think I know what he means. I'm pretty sure most of us are fairly
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familiar with the basics of Keynesian economics. The real question is, what patterns, what overall
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styles are so similar between the Democrats and the Keynesians? And, um, furthermore, I'm
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going to do one better with this video. I'm going to explain this in an even-handed manner.
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Now, you folks that know me, you know typically that when I discover that somebody is arguing
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disingenuously, when they're lying, when they're not being a decent human being, I tend to go
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for the throat. And I'm really not a fan of the Democrat party because it is chock full
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of disingenuous arguers. But I'm not going to do that this time. I'm going to be completely
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even-handed and treat the Democrats as what they say they are. Because the fact that I can
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prove that what they say they are is innately destructive is a better argument than proving
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that the Marxist scumbags that actually occupy the party, proving that those people are destructive.
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No, no, what Democrats say they are is bad enough. Now, the first thing we need to discuss
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is what is Keynesian economics? You know, and this is not going to be a hugely in-depth discussion.
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If you really want to know more about this, I suggest Mises.org. I suggest you address the
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original text because, you see, economics is one of those things. It's part of the nature
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of reality is that systems built off of very simple rules can wind up having incredibly,
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infinitely complex results. And economics is one of those cases. Economics is so simple
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at the 101 level. And yet, as you explore it more and more, it becomes very... you discover
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things that are very counterintuitive. You see this progression of chaos theory. You see
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these high-level patterns forming. So if you really want to get into it, it's not something
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I can put into a video like this. You need to go study it for yourself. Now, that said,
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we can explain Keynesian economics fairly well by contrasting it to Austrian economics.
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And again, I'm completely oversimplifying both these theories. But at the end of the day,
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the difference between good and noble Austrian economics and the dirty, filthy Keynesian economics
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is that while both of them acknowledge supply and demand and, you know, elastic trading curves, et cetera,
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Austrian economics holds that the wealth of an economy, the health of an economy, ultimately boils down to
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production, while the Keynesians argue that it's about consumption.
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As a result of this, if there's an economic downturn, you know, if there's a period where
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people are having trouble finding jobs, where prices are going up, where there's just a lot of
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economic turmoil, a lot of unhappiness, of poverty appearing in a certain era, if you speak to an
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Austrian, what they'll say is that, well, there's a lot of malinvestment. Over the past 5, 10, 20 years,
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we invested all of this money building infrastructure that, as the Native Americans would say, that
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didn't grow corn for us. You know, like we built all these farms that turned out to be on completely
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useless land and we can't grow anything with them, or we built all these houses that nobody wanted to
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live in, or that weren't very well built, so on and so forth. We had bad investments and our production
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suffers. And so the solution to right the economy is to help production occur. The Keynesians, meanwhile,
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argued that it's consumption that drives the economy, that there's not going to be any production
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if there's no consumption. So imagine you have a factory. You own a factory that builds widgets,
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and there's an economic downturn. All of a sudden, nobody is buying widgets anymore.
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You, as the factory owner, you're going to reduce the output of your factory. You're going to stop
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producing as many widgets because the price people are willing to pay for widgets is plummeting.
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And you'll be laying a whole bunch of people off, and then that just exacerbates things,
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because now those people you just laid off can't buy widgets anymore. So the Keynesian argues that
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it's the consumption. And so during an economic downturn, what you need to do is you need to pump
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money into the economy. You need to loosen lending practices. You need to reduce the interest rates
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so that there's more lending happening, so that these unemployed people can pull out their credit
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cards and go buy widgets. And that will stimulate your factory, and that will cause you to hire more
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people, and then the economy will right itself. These are two completely contradictory theories of
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economics. You cannot have both of these. You see, with the Austrian arguing that it's the production
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that's the problem, it's that we didn't produce the right things. You know, we spent all of our
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investment capital on useless boondoggles, on bridges to nowhere. Now the problem is, well, how do we build
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something useful? You know, no one person, and this is the whole free market principle, is no one person
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has enough knowledge, has enough wisdom, to figure out what the correct investments are.
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You basically need perfect knowledge to make the correct investments, and no one person has that.
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You know, you could spend half of the GDP on economic analysts to go study things and try and figure out
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where to put them. It's not going to give you the right answer. It's the wisdom of crowds. You know,
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like we used to say in the army, you know, who's smarter? You know, the sergeant or the platoon?
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The platoon full of privates? Well, the platoon's smarter because there's 30 of them. That's why a good
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leader always listens to their subordinates. It's the wisdom of crowds. And so if this is the issue,
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if the issue is that we spent money poorly, we wasted money, and now our infrastructure is failing,
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and that's hurting our production, giving consumers a whole bunch of money is not going to improve that
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production. You know, it'll give a little bit more business for certain things, but it will also
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suck credit out of the investment side of things. So now, the Keynesian assumes that the business
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environment is doing perfectly fine. You know, all the factories are running tickety-boo. The problem
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is nobody's buying from them. The Austrian is saying that the companies are the problem. The companies did
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not invest properly. And taking the credit and giving it to consumers is not going to fix the fact
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the companies had malinvestments. So, completely opposite theories.
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And the explanation, there's a little metaphor that is very apt, because now, like, I'm sure some of you,
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if you haven't heard of these theories before, are saying to yourselves, well, these both kind of sound
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plausible. All right, well, let's simplify this. And the Keynesians hate this, by the way. They hate when
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you simplify things. You know, it's, quite frankly, running a nation is no different than running a
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household. You know, you have so much money coming in, and so much going out. And if you're in the
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red, then that bodes ill for you. The Keynesians like to argue that you can play all of these money
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games, but even, and I swear to God, if John Maynard Keynes could see what these people were doing,
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he'd be disgusted by it. Because even Keynes himself, and his theory, I would argue, is
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incorrect, he did not advocate playing this, uh, this shell game with money like we're playing
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nowadays. You know, he argued that, yeah, you need to bump up the consumers temporarily, but that
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doesn't mean you play hide-and-seek with money, that you start printing tons and tons of money and
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selling it to the Chinese to cover up the fact that our own manufacturing base is falling apart.
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No, this is just an issue of dishonesty right there. You know, the fact that we want to have
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our cake and eat it too. We don't want to be responsible for the debt we accumulate. You
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know, that's a whole other issue. It's exacerbated by Keynesianism, but it's above and beyond what
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Keynes himself advocated. So these are the guys that really hate when you simplify things,
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because they're playing money games. You know, in a certain sense, Keynesianism is just a cover
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for them to get away with playing money games. But nonetheless, let's ignore the money games for
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a moment. That's just dishonesty. That's lack of morality. That's lack of individual responsibility.
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And the reason that these high-level bankers, these one-percenters, the reason these guys get away
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with it is because us as a civilization, we don't want to be held responsible. You know,
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we get useless university degrees, and then we want the government to bail us out because, well,
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it wasn't my fault. I got tricked. Well, yeah, you did get tricked, but guess what? You're still
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responsible. You know, it's because we're all immoral and narcissistic that this one percent
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can get away with these huge crimes. It's because we're all doing little crimes, and we don't want to
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be held responsible. We don't want the light of truth. So, anyway, side issue. Let's get back to
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Keynesian versus Austrian. And the thought experiment goes like this. Now, imagine there's a bunch of
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people on a desert island. You know, say a plane crashed. And you've got a Mexican that is very good
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at tilling crops. And you've got a Chinese fellow. And this guy's very good at fashioning, you know,
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the wood and rocks into tools and implements. And you've got an Indian who's very good at taking the
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grass and reeds of the island and fashioning it into clothing, into hats so you don't get sunstroke,
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so on and so forth. So these three guys, they set up an economy with one another. You know,
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the Mexican works on gathering and farming food. The Chinese guy, he works on building tools and
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building some huts for them to live in, while the Indian guy starts making clothes for everybody.
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Suddenly, you've got this little micro economy going. And the more production you have,
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the better off everybody is. The more food the Mexican grows, the better fed everyone is. The
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more tools that the Chinese guy does, the better everybody else works, and the more resources there
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are. And the same thing with the Indian guy. If you've got good clothes, you know, you're sheltered
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from the rain, the sun, wonderful. Everybody is happy. See, an Austrian looks at that scenario
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and says, well, how can you make it better? Well, you can increase production. You know,
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like, if an Austrian were to advocate some sort of stimulus, it would be a stimulus to business.
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The Austrian would say, you know what, let's do an airdrop of some water and some MREs.
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That way, you know, the Mexican, instead of focusing on going to get a whole bunch of coconuts,
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I don't know if you guys can hear that, but it's a bit noisy. So the Mexican, instead of focusing
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on getting a whole bunch of coconuts because they're going to starve tomorrow, with the water
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and MREs, he can go and focus on tilling a field. You know, they'd advocate this investment
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in the industry. Whereas the Keynesian, if they're going to argue, if they're going to argue for an
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investment for a stimulus, what they're going to argue for is another mouth to feed.
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See, to argue that consumption drives the economy is like saying, if you took these three guys,
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the Indian, Mexican, and the Chinese man, you took them and you added one more person,
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you add a fat American. And this fat American demands that they all produce extra goods and
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services for him. And in exchange, he provides entertainment, the service economy, what have
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you. The idea that this higher consumption is going to make everybody work even harder.
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Now, I ask you folks, does that sound like an increase in wealth to you?
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This demanding this higher consumption, does that sound like an improved economy to you?
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Keynesianism, although it can make a little bit of sense at first, is ultimately upside down
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and backwards thinking. So now the next part of the question.
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Why is it that Democrats are so attracted to Keynesianism, while Republicans tend to lean
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more to the austerity side, the Austrian side of things?
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Well, it goes to the basic psychologies that make up the two parties. Now, a while back,
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the Democrats were pushing this new study that showed that Republicans feel more fear. Now,
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you could have equally well described the study as saying that Democrats show more signs of
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psychopathy, but that's neither here nor there, because it's absolutely true. Republicans do feel fear.
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Anybody that is aligned conservative or libertarian, you know, on a deep emotional level,
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tends to feel a lot of fear. You know, when I drive down the road, and I absolutely love driving,
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folks, I am constantly aware of the fact that I have my life in my hands, and not just my life,
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but everybody else's life on the road. You know, even though I maintain my vehicle in tip-top
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condition, I don't have perfect knowledge. I can assign a very high probability that a tire's not
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going to blow, but I can assign a perfect probability. And I'm aware of the times when
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there's a lot of traffic, say there was a pileup on the road ahead. You know, or say if I'm passing
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somebody in the middle of the night, and I shoulder check, that could be the moment a deer runs out in
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front of the road. Yeah, I am aware of these dangers, and I cope with them. You know, I'm not having a
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panic attack, but I am very afraid. Similarly, the association, like, conservatives tend to be
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homeowners and family men. And when you own your own home, you have something you could lose.
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When you have your own family, at least so I've been led to believe, you are just absolutely
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terrified of losing your children. Because they are so incredibly important to you, that even a one
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in a million chance of your children dying is enough to make you afraid. So yes, the conservatives are
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based upon rational fear. And it is a rational fear, because these are the same people that serve
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in the military. Okay, it's about being able to overcome your fear, but also being aware of the
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dangers, realistic about the dangers. So as a consequence, the Republicans are conservative.
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They recognize just how dangerous this world is, just how many ways things could go wrong. And so
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they're very hesitant to upset the boat, or to do something crazy. You know, and if something does
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need to be done, they want to do something very basic, very simple, and very obviously good.
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Now the Democrats. And like I said, I'm going to be even-handed in this video. I have a very low
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opinion of Democrats, but I'm going to be nice. The Democrats, because they don't feel as much fear,
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they're more likely to seek out novelty. To go to a crazy club, and, you know, listen to all the new
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music, and have all sorts of crazy sexual partners. And the Democrat, because they're not afraid
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of starving to death. They don't, like the conservative is aware of the fact, let's see,
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if I lose my job, you know, I have my mortgage payment, and these people depend on me, and
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etc. The Democrat is less worried about that. They're more adventurous, although for some strange
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reason they don't join the military. I'm sorry, I'm sorry, I said I was going to be nice. The
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Democrat, because they're not afraid, they want to try out novel things, and they're always looking
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for solutions. The Democrats find solutions to problems that don't even exist.
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And so, this is what leads them to being attracted to Keynesianism.
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See, the Austrian economics, you know, and it depends how strict you are. You know, if you are
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very strict Austrian, you say the government should never invest in the economy. It should never
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interfere. That if there is an upset, if there is a recession, the best way to fix it is to leave
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it alone. Let people make their own decisions. Let people come up with their own plans. Let the
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economy solve itself. So that's hard Austrianism. But there's also soft Austrianism. And this is what
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you see with President Hoover. Now, President Hoover, a Republican, just an absolutely amazing
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man. He was an, I believe he was a mechanical engineer. If you ask me my favorite president,
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it's probably Hoover. This guy traveled all over the world. He set up a whole bunch of, I believe it
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was, like, not just water wells, but entire sewage systems in Africa. His wife was with him. And she
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was a big, you know, like, not the modern, like, charity awareness raising garbage. But she actually,
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like, took part in trying to educate people, get schools going. Again, I'm just speaking from memory,
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you know, go, go read the Wikipedia on, on Hoover if you want to know more about him. Absolutely amazing
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guy. And then he gets hammered with the Great Depression and absolute panics going on throughout
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society. Now, if you speak to a strict Austrian, they'll point out that there was a, an economic dip
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about 10 years before that, that would have been just as bad, except nobody cared, and it corrected
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itself in about three to six months. And they would argue that Hoover's response did wind up
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exacerbating the, the, it turned, it turned a recession into the Great Depression. It's maybe
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not entirely fair, since there were other effects happening. There was the, the dust bowl in the
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Midwest that was killing crop production. And, and there was a number of other similar factors going
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on in Europe with major trading partners. So it was basically the perfect storm. But whether
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or not you agree with Hoover's response, whether or not you say it was misguided or not,
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I think it's worth looking at what that man did. Hoover's response to the Great Depression?
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Build the Hoover Dam. You know, I was just visiting that, that thing a couple, about a week or so ago,
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and it is an amazing feat of engineering. It blows me away. It is literally built into the side of the
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mountain, organic with the mountain, and just the size of it is stunning. Hoover's solution to the
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Depression was, well, we need to get industry going. Let's build a giant hydroelectric dam. Let's build
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something that's completely ridiculous and stupid and awesome. If we're going to spend money on the
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economy, let's build something amazing. Let's build a bit of infrastructure that is useful and needed.
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See, with the Democrats, they're more interested in intervening with the economy. And see, here's the
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thing. Austrianism, again, you've got hard and soft. Hard says never invest in the economy. Soft says,
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well, if you're going to invest in the economy, try and build something useful. Keynesianism always says
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invest in the economy and do it by giving people cheap credit. And so when you have the psychology
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of a Republican that's very cautious, that's very fearful, that knows the world is dangerous, if they're
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going to invest in the economy. They're going to invest in hard and useful infrastructure. Not bridges
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to nowhere, but stuff like the Hoover Dam. Whereas the Democrat, who is always looking, they have so
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many solutions, they just need to find the problem. Keynesianism gives them that problem. With Keynesian
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theory, everything is an excuse to intervene in the economy. Every downturn, not even a downturn in the
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economy as a whole, but a downturn in this one little sector, you know? It's like, oh, horses and
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carriages are going down. Well, automobiles go up. But, oh, well, we need to invest in that. We need to fix
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that. Look, I have a solution right here. I have a thousand solutions. Let's try this one. Keynesianism
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constantly gives them an excuse to intervene in the economy. And the Democrats just don't stop to ask
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themselves, is this really necessary? Is this really such an emergency that I need to be intervening?
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No, the Democrats are chock full of solutions. You know, they are chock full of all these brilliant
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ideas that they want to push on us. And they're just waiting for any problem to happen. And an economic
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theory that tells them that there's a lot of problems that they should be fixing all the time,
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well, you just told them exactly what they want to hear.
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So that is why you have that connection between Democrats and Keynesianism. They are both systems
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that are constantly trying to try out new solutions with no regard for the dangers that are present
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or for the fact that things seem to be working pretty bloody well.
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And if any of you have net neutrality on your mind right now, that's a pretty good example of it.
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Anyway, Carl's blog is linked down below. It is an excellent, excellent accumulator of stuff in the news,
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so go check it out. And also, glorious hat. It looks great, it keeps you warm, and it pisses off Democrats.