On this day in 1878, Mexican revolutionary Pancho Villa was born. Growing up, I always thought he was like the Mexican Billy the Kid. But if he was any kind of outlaw, it was Robin Hood. I think it’s all about racism. This morning, I was wondering about all of this immigration reform. Why is it that Americans have no problem with the Canadian border, but we want to build an electrical fence on the Mexican border? I know the justification is that Mexico is a poor country so people from there want to come into this country for economic opportunity. But doesn’t that beg the question? If we hadn’t had these racist attitudes, wouldn’t Mexico have by now reached economy parity with us? Regardless, Pancho Villa is rightly a hero is Mexico and he should be here too.
The great journalist Bill Moyers is 79 today. He first gained attention as White House Press Secretary in the Johnson administration. But since then, he is one of the few establishment voices on the left who hasn’t been co-opted by the New Democratic movement. The fact that today he is considered some kind of leftist radical by those on the right (and even many on the “left”) is a good indication of just how out of kilter American politics has become.
The day, however, belongs to the most sinned-against man in modern economics, John Maynard Keynes who was born on this day in 1883. He spent most of the Great Depression with those in power ignoring him. But after that, we learned our lesson! I remember when I took Econ 101, I thought, “That’s great! We will never again have to suffer through a Great Depression.” Oh, silly me. During this crisis, those in power have done everything they possibly could to avoid believing everything we’ve known for the last 70 years about economic recessions.
What is particularly sad about this is that almost the whole of the “Chicago School” and “fresh water” economists did all they could to muddy the water. I particularly think of men like Greg Mankiw who argued against stimulus, who had always accepted the concept before Obama was president. What’s more Mankiw started to become pro-stimulus again as one of Romney’s economic advisers, I assume he was laying the groundwork for the upcoming Romney administration.
What Keynes taught about economics is about as basic as you can get. And there are very few economic situations in which it isn’t appropriate. One of those would be the stagflation of the 1970s. But what we have been suffering through the last five years is exactly the same thing we struggled through for 10 years after the crash of 1929. And mostly we’ve done better than then because of systemic changes in our governance. Now we have Social Security and Unemployment Insurance. So the recession wasn’t as bad. And we did (despite enormous resistance from the right) manage to pass a small stimulus. But otherwise, our response was the same as the response to the Great Depression. We have sinned against Keynes and against our entire nation of people.
Here is Keynes reporting on the good news of the end of the gold standard:
Happy birthday John Maynard Keynes!