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  • Keynes vs. Hayek = Obama vs. Merkel?

    They are getting together again. This weekend in Toronto, Canada, President Obama and German Chancellor Merkel reconvene at the G-20 Summit to figure out how to move the global economy forward. The two leaders are indeed extraordinary and remarkable in many ways. President Obama is the first African American President while Chancellor Merkel is the first female Chancellor of Germany. Oh, by the way, they are both for “change,” too.

    What appears even more extraordinary are their strikingly different choices of economics playbook for “change.”  President Obama has chosen the book of English-speaking John Maynard Keynes and stuck to it. In fact, President Obama once noted in a quite assertive tone, “only government can provide the short-term boost necessary to lift us from a recession this deep and severe.” By contrast, Chancellor Merkel seems to have adopted the book of German-speaking Friedrich von Hayek. Chancellor Merkel, who has fended off calls from the Obama Administration to spend more money to deal with the current crisis, defended her austerity plan by saying, “We, the Europeans and the Germans in particular, think that reducing the deficits is indispensable for achieving sustainable growth.”  She also noted that there are differences “about the philosophy, the approach of how to overcome the financial crisis.”

    Friedrich Hayek once observed, “To be controlled in our economic pursuits means to be controlled in everything.” The American public does increasingly understand the importance of economic freedom. It is quite encouraging that Hayek’s classic The Road to Serfdom has been in the top 100 on Amazon’s bestseller list this month, even hitting the top spot and generating a mini “Hayek boom.” It is time to send some copies to 1600 Pennsylvania Ave.

    Posted in Economics [slideshow_deploy]

    2 Responses to Keynes vs. Hayek = Obama vs. Merkel?

    1. Lou USA says:

      Angela Merkel, has got it together. She is not influenced by Saul Alynsky or his followers and never will be. Germany is a strong nation with a far more intelligent general public than here in the US. Germany's economy will surpass ours before long. They will eventually purge their nation of the detractors rather than to make laws justifying their exsitance. The German people are smart and have the ability to fix things before they are totally broke. They are not importing people of limited intellegence to gain a stronger voteing block. They know how to control crime and control it unlike the US where there is the chance of offending the party strenght.

      Go Angela, you have the ability to make your country the strongest in the world, do not listen to a US president that is trying to dismantlehis nation's economy, security and would like other nations to fail like his. That my dear is the sure sign of a administration that is in over their heads. Don't let the bad economics of the US drag your nation down. It is wise to make your nation strong before you offer aid to others.

      Good Luck

    2. Rich - Carlisle PA says:

      Might as well save the postage. There is little chance that the current occupants of 1600 PA Ave will understand.

      The recently posted paper at Econ Journal Watch (econjwatch.org) "Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans" which was summarized by one of the authors in a WSJ opinion piece (Are You Smarter Than a Fifth Grader? Self-identified liberals and Democrats do badly on questions of basic economics.) is clear evidence that progressives – liberals do not understand even the most basic concepts of economics and a free market economy.

      Nearly total ignorance of the economic impact of their “good intentions” is all the more reason to remove those folks from elected government and appointed positions at all levels as soon as possible. However, perhaps we can take some small degree of comfort in the knowledge that many of them may just be going about the destruction of our economy in a state of blissful ignorance rather than a conscious, malicious effort to destroy it.

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