Under Literature, new issues of American Affairs are being added, in particular this one from 1946, which runs a letter from Keynes to FDR. I find it very bizarre really. I had never seen this before:
The United States is ready to roll toward prosperity,
if a good hard shove can be given in the next
six months. Could not the energy and enthusiasm
which launched the NBA in its early days be put
behind a campaign for accelerating capital expenditures,
as wisely chosen as the pressure of circumstances
permits? You can at least feel sure that the
country will be better enriched by such projects
than by the involuntary idleness of millions.I put in the second place the maintenance of cheap
and abundant credit, in particular the reduction of
the long-term rate of interest. The turn of the tide
in Great Britain is largely attributable to the reduction
in the long-term rate of interest which ensued
on the success of the conversion of the war loan.
This was deliberately engineered by the open-market
policy of the Bank of England.
I see no reason why you should not reduce the
rate of interest on your long-term government bonds
to 2%% or less, with favorable repercussions on the
whole by the market, if only the Federal Reserve
System would replace its present holdings of shortdated
Treasury issues in exchange. Such a policy
might become effective in a few months, and I attach
great importance to it.
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Sir Henry Clay, then of the Bank of England, in his biography of Montagu Norman writes:-
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I received a call in 1936 from one of President Roosevelt’s economic advisors, who complained bitterly that, whereas America had unbalanced its budget, devalued its currency, expanded credit, and done everything English economists advised, while Britain had balanced its budget, controlled credit expansion, and followed a relatively orthodox policy, recovery in Britain had preceded recovery in America and gone much further; it was, he said, very embarrassing.
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The warm glow of Keynes’ approbation for the New Deal did not last that long, it seems!
Behind the cryptic verbiage Keynes actually hides an incredibly simplistic, and equally confused and contradictory, analysis. Consider just one particularly glaring contradiction among the many obvious and less so nonsense. The letter is really a treasure-trove for anyone looking for economic fallacies in one place.
In the section The Problem of Rising Prices Keynes is concerned with how to keep up the prices because “they [prices] are usually a symptom for rising output and employment” and that “there cannot be rising output without rising prices”. Here’s the contradiction. To ensure rising prices Keynes advocates two ways, although he favors the second: (1) directly cutting the output, i.e. the supply of goods as it was done through the infamous “aggricultural restrictions”, and (2) by means of “increasing aggregate purchasing power” via governmental expenditure financed by newly created money. The contradiction consists in Keynes’s advocating a reduction of output in order at the same time to increase output and employment!
Keynes, without doubt, the worst Englishman since King John.
Inspiring nonetheless, and ironic too; if one man could galvanise such hoards (or herds?) to the Jack-pole to fly the red flag high and wide, then couldn’t a Keynes’ antithesis achieve a similar feat?
Yeh, yeh, I’m hinting at Ron Paul, anything wrong with that?
Lee,
I don’t think this: “He was particularly interested in Roosevelt’s essay ‘True Americanism’
(1894), the content of which, although not mentioning James specifi-
cally, elaborated on the ideas and imagery of the earlier criticism of him
(and rehearsed the unfavourable publicity he would receive in 1915). For
Roosevelt, Americanisation entailed a process of absolute redefinition of
identity in which all trace of European inheritance was washed away. Of
the ever-growing number of American immigrants he declared: ‘Wemust
Americanize them in every way, in speech, in political ideas and principles,
and in their way of looking at relations between Church and State.
We welcome the German or the Irishman who becomes an American.
We have no such use for the German or Irishman who remains such.’5
Such a conception of American identity was founded on recognisable
Anglo-Saxon traits that had been most abundant during the Revolutionary
period. The historian Jack Pole has argued that Roosevelt ‘believed
that the character of the American nationality was fixed in the period
from 1776 to 1787′,..”
historian was quite the object you reference, above, be a bonny scot and elucidate..though, if I understand your context, I’d say that Rep. Paul’s message would be more of that that would inform us to understand such point(s) as you made, as opposed to having us, simply, swallow his take.
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