"conservative hostility to Keynes ... has been absolutely consistent for generations"

[phantom power]

But the debate over business-cycle economics has always been a left-right thing. Specifically, the right has always been deeply hostile to the notion that expansionary fiscal policy can ever be helpful or austerity harmful; most of the time it has been hostile to expansionary monetary policy too (in the long view, Friedman-type monetarism was an aberration; Hayek-type liquidationism is much more the norm). So the politicization of the macro debate isn’t some happenstance, it evidently has deep roots.

Oh, and some of us have been discussing those roots in articles and blog posts for years now. We’ve noted that after World War II there was a concerted, disgraceful effort by conservatives and business interests to prevent the teaching of Keynesian economics in the universities, an effort that succeeded in killing the first real Keynesian textbook. Samuelson, luckily, managed to get past that barrier — and many were the complaints. William Buckley’s God and Man at Yale was a diatribe against atheism (or the failure to include religious indoctrination, which to him was the same thing) and collectivism — by which he mainly meant teaching Keynesian macroeconomics.

What’s it all about, then? The best stories seem to involve ulterior political motives. Keynesian economics, if true, would mean that governments don’t have to be deeply concerned about business confidence, and don’t have to respond to recessions by slashing social programs. Therefore it must not be true, and must be opposed. As I put it in the linked post,

So one way to see the drive for austerity is as an application of a sort of reverse Hippocratic oath: “First, do nothing to mitigate harm”. For the people must suffer if neoliberal reforms are to prosper.

If you think I’m being too flip, too conspiracy-minded, or both, OK — but what’s your explanation? For conservative hostility to Keynes is not an intellectual fad of the moment. It has absolutely consistent for generations, and is clearly very deep-seated.

http://krugman.blogs.nytimes.com/2015/05/20/conservatives-and-keynes

[BillZBubb]

1. Krugman is correct.

anti-Keynesianism is a must for conservatives in order to keep their failed economic philosophy from totally falling apart. If they admitted Keynes was right (and he was/is), government has a central and at times predominant responsibility for the nation's economy. Their bankrupt philosophy only sees government as an impediment to economic success and to freedom. Of course for them freedom is only meant in a very limited economic sense.

The ironic thing, though, is republicans like reagan and w bush were backdoor Keynesians. reagan lowered taxes on the wealthy, but instead of cutting spending to match the cuts, he borrowed and spent. That was a Keynesian stimulus with the façade of "supply side" policy. It wasn't an effective stimulus, however, because the government deficit spending in essence went to wealthy interests. w bush ran the same game plan and nearly destroyed the financial system.

[Exilednight]

5. The only way to fully convince them is to allow them to have their way for ten years and

Then look back on the devastation.

I could make a very good argument as to why we should do this, but it would probably fall on deaf ears.

[phantom power]

6. To a large extent, they *have* had their way for the last 10 years. Or 20.

They're deep into no-true-scottsman territory. I don't think any amount of failure will convince them of anything.

[hifiguy]

2. Keynes has been proven correct by history

time and again.

"Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."

Whether Keynes actually said it or not makes it no less true.

ETA - You are right, Bill. Getting money into the hands of the people works. Giving money to banksters never accomplishes anything and never will - they either sit on it or use it to engage in more lunatic speculation. Twas ever thus.

[HereSince1628]

3. Public spending doesn't have to have a Keynesian argument...

Contracting loans for public enterprises (enterprises OWNED BY TAXPAYERS) when rates are low (as in a depression/recession) simply makes GREAT economic sense. Maintenance can't be deferred forever.

But, I suppose you can advocate deferring it, so that the value of the enterprise significantly drops making it profitable as a privatized investment.

I've watched this happen to public golf courses, swimming pools, and park pavilions (renovated into restaurants), around Milwaukee. I have little doubt that for Milwaukee residents this will be the fate of interstate highway, airport, water supply, and if they can figure out how to price its commodification the air people breathe.

[malaise]

4. Goes back to Bretton Woods

but they kept fairly quiet until the Soviet Union collapsed

http://ucatlas.ucsc.edu/sap/history.php

The key debate at Bretton Woods was between the British and US delegations representing, respectively, liberal and conservative visions of global economic institutions. The British delegation, led by Maynard Keynes, imagined that the new IMF should be a cooperative fund which member states could draw upon to maintain economic activity and employment through periodic crises. This view suggested an IMF helping governments to act as the US government had during the New Deal in response to the great recession of the 1930s.

By contrast, the US delegation to Bretton Woods foresaw an IMF more like a bank, making sure that borrowing states could repay their debts on time. This more conservative view was less concerned to avoid recession and unemployment. The US view prevailed, and set the stage for how economic crises have been handled since World War II (Harris 1988).