Saturday 11 September 2010

Keynesianism alive and well in the White House

Regular readers, if such exist, will have noted few posts during August. This is because I have been juggling some time-consuming economics work with quite a lot of holidays. The end of the latter this week involved a four hour wait in the Gare du Nord in Paris. where, to pass the time, I picked up a free newspaper (20 Minutes, 08/09/10) and found the following short article:


Des grands travaux très coûteux pour relancer l’emploi. C’est l’ambitieux pari de Barack Obama en plein chute dans les sondages à deux mois des législatives. Le président américain a annoncé lundi qu’il allouerait 50 milliards de dollars à un plan de construction d’infrastructures routières, aériennes et ferroviaires. Ce plan ne « créera pas seulement des emplois immédiatement mais organisera mieux notre économie sur le long terme », a-t-il déclaré. « Même après la pire récession de notre vie, l’Amérique continue de maîtriser son destin. » Mais ce plan doit d’abord être voté au congrès où l’opposition risque d’être féroce.

For those whose French is rusty his means that President Obama is proposing a 50 billion dollar gamble of costly (public) works to create employment. These will involve construction in the road, rail and airways infrastructures which will not only create jobs now but will better prepare the economy for the long term - a classic classroom statement of the Keynesian position which an "A" level student with a modest E could understand and justify.

Why oh why does the British government cravenly follow the White House when it does stupid thing and ignore it when it proposes the correct course - especially when that course is based on the policies of a great Liberal and British economist? Liberal Democrats in government (and all Liberal Democrats in the coming conference) should be pressing Obama's example loudly and clearly.

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