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March 6, 2015 - Davis Aurini
28:14
Aurini's Insight: The Correlation of Liberalism & Keynesianism

Karl's Blog: http://blog.ushanka.us/ Glorious Hat: http://commieobama.com/ My blog: http://www.staresattheworld.com/ My Twitter: http://twitter.com/Aurini Download in MP3 Format: http://www.clipconverter.cc/ Credits: I Feel You by Kevin MacLeod (incompetech.com) Licensed under Creative Commons: By Attribution 3.0 http://creativecommons.org/licenses/by/3.0/

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Hey folks, this episode of Arini's Insight is brought to you by Carl Ushenka, who wants me to address the issue of why it is that Democrats and Keynesian economics seem to go together like peanut butter and jelly.
Before I get to the topic, however, I want to tell you about who Carl Ushenka is.
If you're not familiar with him, he has an excellent blog where he tracks Marxist influence in Western civilizations.
And he is also the manufacturer of Glorious Hat, more properly known as the Kami Obama hat, that you can see right there.
Now, I've told you about this hat before.
It is incredibly warm.
It looks great.
It's going for $22 and change right now, I believe, on his website.
And from, you know, from a fashion accessory standpoint, it really makes you stand out.
Now, it's not too flashy.
You know, it's not quite up there with the cowboy hat, but it looks really good.
And it's subtle, it's formal, but it makes you stand out.
It makes you look like a professional, like an adult.
It has those hilarious plates that are interchangeable in it, and those come out for to just be a regular hat that you can wear to the office.
I don't have it with me because I thought the Mojave would be a little bit warmer than it is right now, but I do need to get it back for next winter.
Amazing hat, link down below, and full disclosure, I gave Carl a 50% discount since he sent me the hat pro bono back in the day, and for every hat that you guys buy, he's going to send me a few bucks.
So help keep me in ivory back scratchers by buying yourself a great hat.
KamiObama.com, link down below.
Alright, so to the video itself.
Now, he asked me not to do an overly detailed factual lecture, but to do an Arene-style video on this topic.
And I think he knows what, I think I know what he means.
I'm pretty sure most of us are fairly familiar with the basics of Keynesian economics.
The real question is, what patterns, what overall styles are so similar between the Democrats and the Keynesians?
And furthermore, I'm going to do one better with this video.
I'm going to explain this in an even-handed manner.
Now, you folks that know me, you know typically that when I discover that somebody is arguing disingenuously, when they're lying, when they're not being a decent human being, I tend to go for the throat.
And I'm really not a fan of the Democrat Party because it is chock full of disingenuous arguers.
But I'm not going to do that this time.
I'm going to be completely even-handed and treat the Democrats as what they say they are.
Because the fact that I can prove that what they say they are is innately destructive is a better argument than proving that the Marxist scumbags that actually occupy the party, proving that those people are destructive.
No, no, what Democrats say they are is bad enough.
Now, the first thing we need to discuss is what is Keynesian economics?
You know, and this is not going to be a hugely in-depth discussion.
If you really want to know more about this, I suggest Mises.org.
I suggest you address the original text because, you see, economics is one of those things.
It's part of the nature of reality is that systems built off of very simple rules can wind up having incredibly, infinitely complex results.
And economics is one of those cases.
Economics is so simple at the 101 level, and yet as you explore it more and more, it becomes very, you discover things that are very counterintuitive.
You see this progression of chaos theory.
You see these high-level patterns forming.
So if you really want to get into it, it's not something I can put into a video like this.
You need to go study it for yourself.
Now that said, we can explain Keynesian economics fairly well by contrasting it to Austrian economics.
And again, I'm completely oversimplifying both these theories.
But at the end of the day, the difference between good and noble Austrian economics and the dirty, filthy Keynesian economics is that while both of them acknowledge supply and demand and elastic trading curves, etc. Austrian economics holds that the wealth of an economy, the health of an economy, ultimately boils down to production,
while the Keynesians argue that it's about consumption.
As a result of this, if there's an economic downturn, you know, if there's a period where people are having trouble finding jobs, where prices are going up, where there's just a lot of economic turmoil, a lot of unhappiness, of poverty appearing in a certain era, if you speak to an Austrian, what they'll say is that, well, there's a lot of malinvestment.
Over the past 5, 10, 20 years, we invested all of this money building infrastructure that, as the Native Americans would say, that didn't grow corn for us.
You know, like we built all these farms that turned out to be on completely useless land and we can't grow anything with them.
Or we built all these houses that nobody wanted to live in or that weren't very well built, so on and so forth.
We had bad investments and our production suffers.
And so the solution to right the economy is to help production occur.
The Keynesians, meanwhile, argue that it's consumption that drives the economy, that there's not going to be any production if there's no consumption.
So imagine you have a factory.
You own a factory that builds widgets and there's an economic downturn.
All of a sudden, nobody is buying widgets anymore.
You as the factory owner, you're going to reduce the output of your factory.
You're going to stop producing as many widgets because the price people are willing to pay for widgets is plummeting.
And you'll be laying a whole bunch of people off.
And then that just exacerbates things because now those people you just laid off can't buy widgets anymore.
The Keynesian argues that it's the consumption.
And so during an economic downturn, what you need to do is you need to pump money into the economy.
You need to loosen lending practices.
You need to reduce the interest rate so that there's more lending happening so that these unemployed people can pull out their credit cards and go buy widgets.
And that will stimulate your factory.
And that will cause you to hire more people.
And then the economy will write itself.
These are two completely contradictory theories of economics.
You cannot have both of these.
You see, with the Austrian arguing that it's the production that's the problem, it's that we didn't produce the right things.
You know, we spent all of our investment capital on useless boondoggles, on bridges to nowhere.
Now, the problem is, well, how do we build something useful?
You know, no one person, and this is the whole free market principle, is no one person has enough knowledge, has enough wisdom to figure out what the correct investments are.
You basically need perfect knowledge to make the correct investments, and no one person has that.
You know, you could spend half the GDP on economic analysts to go study things and try and figure out where to put them.
It's not going to give you the right answer.
It's the wisdom of crowds.
You know, like we used to say in the army, you know, who's smarter?
You know, the sergeant or the platoon?
The platoon full of privates.
Well, the platoon's smarter because there's 30 of them.
That's why a good leader always listens to their subordinates.
It's the wisdom of crowds.
And so if this is the issue, if the issue is that we spent money poorly, we wasted money, and now our infrastructure is failing and that's hurting our production, giving consumers a whole bunch of money is not going to improve that production.
You know, it'll give a little bit more business for certain things, but it will also suck credit out of the investment side of things.
So now, because the Keynesian assumes that the business environment is doing perfectly fine.
You know, all the factories are running tickety-boo.
The problem is nobody's buying from them.
The Austrian is saying that the companies are the problem.
The companies did not invest properly.
And taking the credit and giving it to consumers is not going to fix the fact the companies had malinvestments.
So completely opposite theories.
And the explanation, there's a little metaphor that is very apt, because now, like, I'm sure some of you, if you haven't heard of these theories before, are saying to yourselves, well, these both kind of sound plausible.
All right, well, let's simplify this.
And the Keynesians hate this, by the way.
They hate when you simplify things.
You know, it's, quite frankly, running a nation is no different than running a household.
You know, you have so much money coming in and so much going out.
And if you're in the red, then that bodes ill for you.
The Keynesians like to argue that you can play all of these money games, but even, and I swear to God, if John Maynard Keynes could see what these people were doing, he'd be disgusted by it.
Because even Keynes himself, and his theory, I would argue, is incorrect.
He did not advocate playing this shell game with money like we're playing nowadays.
You know, he argued that, yeah, you need to bump up the consumers temporarily, but that doesn't mean you play hide and seek with money, that you start printing tons and tons of money and selling it to the Chinese to cover up the fact that their own manufacturing base is falling apart.
No, this is just an issue of dishonesty right there.
You know, the fact that we want to have our cake and eat it too.
We don't want to be responsible for the debt we accumulate.
You know, that's a whole other issue.
It's exacerbated by Keynesianism, but it's above and beyond what Keynes himself advocated.
So these are the guys that really hate when you simplify things because they're playing money games.
You know, in a certain sense, Keynesianism is just a cover for them to get away with playing money games.
But nonetheless, let's ignore the money games for a moment.
That's just dishonesty.
That's lack of morality.
That's lack of individual responsibility.
And the reason that these high-level bankers, these 1%ers, the reason these guys get away with it is because us as a civilization, we don't want to be held responsible.
You know, we get useless university degrees, and then we want the government to bail us out because, well, it wasn't my fault.
I got tricked.
Well, yeah, you did get tricked, but guess what?
You're still responsible.
It's because we're all immoral and narcissistic that this 1% can get away with these huge crimes.
It's because we're all doing little crimes and we don't want to be held responsible.
We don't want the light of truth.
So anyway, side issue.
Let's get back to Keynesian versus Austrian.
And the thought experiment goes like this.
Now imagine there's a bunch of people on a desert island.
You know, say a plane crashed.
And you've got a Mexican that is very good at tilling crops.
And you've got a Chinese fellow.
And this guy's very good at fashioning the wood and rocks and whatnot into tools and implements.
And you've got an Indian who's very good at taking the grass and reeds of the island and fashioning it into clothing, into hats so you don't get sunstroke, so on and so forth.
So these three guys, they set up an economy with one another.
You know, the Mexican works on gathering and farming food.
The Chinese guy, he works on building tools and building some huts for them to live in, while the Indian guy starts making clothes for everybody.
Suddenly you've got this little micro economy going.
And the more production you have, the better off everybody is.
The more food the Mexican grows, the better fed everyone is.
The more tools that the Chinese guy does.
The better everybody else works and the more resources there are.
And the same thing with the Indian guy.
If you've got good clothes, you know, you're sheltered from the rain, the sun, wonderful.
Everybody is happy.
See, an Austrian looks at that scenario and says, well, how can you make it better?
Well, you can increase production.
You know, like, if an Austrian were to advocate some sort of stimulus, it would be a stimulus to business.
The Austrian would say, you know what?
Let's do an airdrop of some water and some MREs.
That way, you know, the Mexicans, they're focusing on going to get a whole bunch of coconuts.
I don't know if you guys can hear that, but it's a bit noisy.
So, the Mexican, instead of focusing on getting a whole bunch of coconuts because they're going to starve tomorrow, with the water and MREs, he can go and focus on tilling a field.
You know, they'd advocate this investment in the industry.
Whereas the Keynesian, if they're going to argue, if they're going to argue for an investment for a stimulus, what they're going to argue for is another mouth to feed.
See, to argue that consumption drives the economy is like saying if you took these three guys, the Indian Mexican and the Chinese man, you took them and you added one more person, you add a fat American, and this fat American demands that they all produce extra goods and services for him, and in exchange, he provides entertainment, the service economy, what have you.
The idea that this higher consumption is going to make everybody work even harder.
Now, I ask you, folks, does that sound like an increase in wealth to you?
This demanding this higher consumption, does that sound like an improved economy to you?
Keynesianism, although it can make a little bit of sense at first, is ultimately upside down and backwards thinking.
So, now the next part of the question: Why is it that Democrats are so attracted to Keynesianism, while Republicans tend to lean more to the austerity side, the Austrian side of things?
Well, it goes to the basic psychologies that make up the two parties.
Now, a while back, the Democrats were pushing this new study that showed that Republicans feel more fear.
Now, you could have equally well described the study as saying that Democrats show more signs of psychopathy, but that's neither here nor there because it's absolutely true.
Republicans do feel fear.
Anybody that is aligned, conservative, or libertarian, you know, on a deep emotional level, tends to feel a lot of fear.
You know, when I drive down the road, and I absolutely love driving, folks, I am constantly aware of the fact that I have my life in my hands, and not just my life, but everybody else's life on the road.
You know, even though I maintain my vehicle in tip-top condition, I don't have perfect knowledge.
I can assign a very high probability that a tire is not going to blow, but I can assign a perfect probability.
And I'm aware of the times when there's a lot of traffic, say there was a pile up on the road ahead, you know, or say if I'm passing somebody in the middle of the night and I shoulder check, that could be the moment a deer runs out in front of the road.
Yeah, I'm aware of these dangers and I cope with them.
You know, I'm not having a panic attack, but I am very afraid.
Similarly, the association, like conservatives tend to be homeowners and family men.
And when you own your own home, you have something you could lose.
When you have your own family, at least so I've been led to believe, you are just absolutely terrified of losing your children because they are so incredibly important to you that even a one in a million chance of your children dying is enough to make you afraid.
So yes, the conservatives are based upon rational fear.
And it is a rational fear because these are the same people that serve in the military.
Okay, it's about being able to overcome your fear, but also being aware of the dangers, realistic about the dangers.
So as a consequence, the Republicans are conservative.
They recognize just how dangerous this world is, just how many ways things could go wrong.
And so they're very hesitant to upset the boat or to do something crazy.
You know, and if something does need to be done, they want to do something very basic, very simple, and very obviously good.
Now, the Democrats.
And like I said, I'm going to be even-handed in this video.
I have a very low opinion of Democrats, but I'm going to be nice.
The Democrats, because they don't feel as much fear, they're more likely to seek out novelty, to go to a crazy club and listen to all the new music and have all sorts of crazy sexual partners.
And the Democrat, because they're not afraid of starving to death.
The conservative is aware of the fact, let's see, if I lose my job, I have my mortgage payment and these people depend on me and etc.
The Democrat is less worried about that.
They're more adventurous, although for some strange reason they don't join the military.
I'm sorry, sorry I said I was going to be nice.
The Democrat, because they're not afraid, they want to try out novel things and they're always looking for solutions.
The Democrats find solutions to problems that don't even exist.
And so this is what leads them to being attracted to Keynesianism.
See, the Austrian economics, you know, it depends how strict you are.
You know, if you are very strict Austrian, you say the government should never invest in the economy.
It should never interfere that if there is an upset, if there is a recession, the best way to fix it is to leave it alone.
Let people make their own decisions, let people come up with their own plans, let the economy solve itself.
So that's hard Austrianism.
But there's also soft Austrianism.
And this is what you see with President Hoover.
Now, President Hoover, Republican, just an absolutely amazing man.
He was an, I believe he was a mechanical engineer.
If you ask me my favorite president, it's probably Hoover.
This guy traveled all over the world.
He set up a whole bunch of, I believe it was like not just water wells, but entire sewage systems in Africa.
His wife was with them and she was a big, you know, not the modern like charity awareness raising garbage, but she actually like took part in trying to educate people, get schools going.
Again, I'm just speaking from memory.
You know, go read the Wikipedia on Hoover if you want to know more about him.
Absolutely amazing guy.
And then he gets hammered with the Great Depression and absolute panics going on throughout society.
Now, if you speak to a strict Austrian, they'll point out that there was an economic dip about 10 years before that that would have been just as bad, except nobody cared and it corrected itself in about three to six months.
And they would argue that Hoover's response did wind up exacerbating the economy.
It turned a recession into the Great Depression.
It's maybe not entirely fair since there were other effects happening.
There was the Dust Bowl in the Midwest that was killing crop production.
And there was a number of other similar factors going on in Europe with major trading partners.
So it was basically the perfect storm.
But whether or not you agree with Hoover's response, whether or not you say it was misguided or not, I think it's worth looking at what that man did.
Hoover's response to the Great Depression?
Built the Hoover Dam.
You know, I was just visiting that thing a couple, about a week or so ago, and it is an amazing feat of engineering.
It blows me away.
It is literally built into the side of the mountain, organic with the mountain, and just the size of it is stunning.
Hoover's solution to the depression was, well, we need to get industry going.
Let's build a giant hydroelectric dam.
Let's build something that's completely ridiculous and stupid and awesome.
If we're going to spend money on the economy, let's build something amazing.
Let's build a bit of infrastructure that is useful and needed.
Versus his follow-up.
See, with the Democrats, they're more interested in intervening with the economy.
And see, here's the thing.
Austrianism, again, you got hard and soft.
Hard says never invest in the economy.
Soft says, well, if you're going to invest in the economy, try and build something useful.
Keynesianism always says invest in the economy and do it by giving people cheap credit.
And so when you have the psychology of a Republican that's very cautious, that's very fearful, that knows the world is dangerous, if they're going to invest in the economy, they're going to invest in hard and useful infrastructure.
Not bridges to nowhere, but stuff like the Hoover Dam.
Whereas the Democrat, who is always looking that they have so many solutions, they just need to find the problem.
Keynesianism gives them that problem.
With Keynesian theory, everything is an excuse to intervene in the economy.
Every downturn, not even a downturn in the economy as a whole, but a downturn in this one little sector, you know?
It's like, oh, horses and carriages are going down.
Well, automobiles go up.
But, oh, well, we need to invest in that.
We need to fix that.
Look, I have a solution right here.
I have a thousand solutions.
Let's try this one.
Keynesianism constantly gives them an excuse to intervene in the economy.
And the Democrats just don't stop to ask themselves, is this really necessary?
Is this really such an emergency that I need to be intervening?
No, the Democrats are chock full of solutions.
You know, they are chock full of all these brilliant ideas that they want to push on us.
And they're just waiting for any problem to happen.
And an economic theory that tells them that there's a lot of problems that they should be fixing all the time?
Well, you just told them exactly what they want to hear.
So that is why you have that connection between Democrats and Keynesianism.
They are both systems that are constantly trying to try out new solutions with no regard for the dangers that are present or for the fact that things seem to be working pretty bloody well.
And if any of you have net neutrality on your mind right now, that's a pretty good example of it.
Anyway, Carl's blog is linked down below.
It is an excellent accumulator of stuff in the news, so go check it out.
And also, Glorious Hat.
It looks great, it keeps you warm, and it pisses off Democrats.
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