Postmodern Monetarism: Supply-sider turning Keynesian

Henry C.K. Liu hliu at
Sun Dec 27 12:56:28 PST 1998

Some one praised on a earlier post former Fed Gov Lawrence Lindsey, a fervent supply-sider, for arguing for an across-the-board 10% tax cut to "put $70 billion in the hands of consumers," to spur them to keep buying more while saving less ( The Wall Street Journal, December 9), notwithstanding consumer debt and defaults being at all time highs. It sounds like a typical Keynesian idea to me. What do Marxist economists and their liberal economists dancing partners on this list have to say about this coalition of strange bedfellows. Are we seeing dialectics at work? Are these traditional labels inoperative in a new conceptual synthesis? Is this postmodern Monetarism or deconstructed Keynesianism? There is a lot of rumbling in the globalized Street that the major reason the Asian, Russia, Brazilian crises did not caused a sustained panic in the stock market was that practically all government economists have turned Keynsean. Is that an accurate assessment? Some even go as far as saying that speculative stock markets completely detached from the realities of the global economy, operating like gambling casinos in Las Vagas, can themselves be economic stimulants that keep the bubble going, that it is good economics to exchange future pain with current euphoria, because theoretically, tomorrow will always be tomorrow in this Goldilock economy. Not being a Marxist, although much indebted to marxist ideas, and not being a trained economist, but being in constant need of a better understanding of this mercurial discipline, I would like to put the following to the specialists or any one who has an informed opinion: If Marxist economists were heading up the Council of Economic Advisors, what policy measures would they propose in the current situation?

Henry C.K. Liu

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