Sign of the End Times: Keynes on the Comback Trail?

I’ve been hearing more and more about Keynesian economics lately. This bit from the Christian Science Monitor is the most specific I’ve found so far: Raising Keynes: An old economist finds new rock-star status:

If economics were about boxing, the classic bout of modern times would have Milton Friedman in one corner and John Maynard Keynes in the other.

Recent rounds have been dominated by Mr. Friedman, the New York-born champion of free markets, but his opponent, an English university don with a penchant for the arts, has recently staged a dramatic comeback.

Few seem to be cheering anymore for unregulated capitalism. From the forthcoming Obama administration to the British government, “Keynesian” economics is now widely invoked as key to saving the world from a new great depression.

For admirers of Mr. Keynes, whose radical idea was that governments could avoid recessions by running deficits, the economist’s resurgence is a vindication after decades in the shadow of Friedman’s followers, including Ronald Reagan and Margaret Thatcher.

More than 60 years after Keynes’s death, his nephew smiles at the revival of his uncle’s ideas.

“He was never altogether out of fashion,” says Stephen Keynes, an octogenarian scion of one of Britain’s most famous families and, like his uncle, a direct descendant of Charles Darwin. “It’s just that certain people have associated his name with inflation, which was not what he advocated.”

This isn’t the first time an American president struggling to regain control of a spiraling economy has sought guidance from Keynes. In 1938, his ideas were embraced, albeit reluctantly, by Franklin D. Roosevelt, with the president announcing it was up to government to “create an economic upturn” by making “additions to the purchasing power of the nation.”

Read it and weep. For an antidote, read Atlas Shrugged. Again, if you’ve read it already. And spread the word: right now, I’m not just reading more about Keynes, I’m also reading more about Ayn Rand and Atlas Shrugged. It’s a real battle out there.

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