BOOK REVIEW by Joanne Conrad, Where Keynes Went Wrong

Where Keynes Went Wrong
by Hunter Lewis

(Submitted 10/29/09)
Published 12/3/09.

Is it the government’s fault? Are we too ignorant? Are we doomed to ten years or more like The Great Depression? Must we eventually suffer 25% unemployment? Are we emulating Japan’s decades of misery? Are we ‘those who cannot remember the past and are condemned to repeat it’? Where Keynes Went Wrong and Why World Governments Keep Creating Inflation, Bubbles, and Busts by Hunter Lewis examines those probabilities, saying that Keynesian economics are now being replayed just like 1929 in the U.S. and Japan’s lost decades of 1980-2008. John Maynard Keynes was a British economist who advocated government-managed economies and government intervention in times of market distress.

Lewis details Keynes’ proclamations from various sources, including Keynes’ General Theory and other writings. It is an interesting format, as Lewis quotes Keynes, and then comments and/or refutes each quote. He also includes comments from Keynes’ defenders. It is thoroughly readable and does not include too much technical language. He avers that the “Federal Reserve Board is a case study of government by experts run amok.” Keynes had said that “…economic questions will involve intellectual and scientific elements…which must be above the heads of the vast mass of more or less illiterate voters.” That the public is upset about spending doesn’t take rocket science. It is extremely disconcerting that Lewis says, “… each time [Keynesian remedies] have been applied by Roosevelt, the Japanese government, and the second Bush administration…[they] have not produced the hoped-for results, and…that there are very good reasons…that it has caused the problems.” If that’s true, how can governments unwittingly be so cruel to its economically “illiterate” voters, the cruelties being things like high unemployment, high deficits, insolvent government entitlements? If that’s true, why are leaders like Henry Paulson, Ben Bernanke, Tim Geithner, Cynthia Romer, et al being so cruel? Keynes’ followers will probably say the government is not spending enough nor soon enough. What is the truth? It is being reported that the U. S. 3rd quarter 2009 GDP (Gross Domestic Product) suggests that the recession is ending, so is the unemployment a lagging economic indicator and soon we can expect more jobs? And that decimated pension funds will soon recover? That there will be more capital for expansion? That there will be no bailouts? That there will be no national deficit? That Medicare, Social Security, et al will be solvent? That revenues will increase enough to pay government expenses? That happy days will be here again?

Economists will find copious endnotes and citations, but general readers will also find thought-provoking analyses and opinions about the economy and many historic examples. But Keynesians and people who believe big government and big spending will solve economic crises will not like this book.
-30-

BOOK REVIEW by Joanne B. Conrad, Meltdown

Meltdown

by Thomas E. Woods, Jr.

Full version)

Published 9-9-10.

Abolish Fannie Mae and Freddie Mac? Rework the Federal Reserve Board? Stop bailouts? Let them go bankrupt? A plethora of books have been written about the financial crisis, and Meltdown is another one with a different slant subtitled, A Free Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse.

This book disputes deregulation and unfettered free markets as causes. It claims government interference, including Federal Reserve Board actions, caused the calamity. Woods says, "...the very people who devised the policies that produced the mess are now posing as the wise public servants who will show us the way out....more regulation, more government intervention, more spending, more money creation, and more debt."

He points out that "economists of the Austrian school of economic thought...[are] the...people who predicted not only the Great Depression, but also the calamity we are dealing with today." Earlier this year, 200 economists signed a letter disputing recent policies. It appears recent policies are Keynesian, not Austrian. The point is that there are disagreements among economists, and there is no "consensus."

There is now a special White House Commission to investigate the 2008 financial crisis and report by December 2010. It will cost $5-8 million. It is Public Law 111-21, signed on May 20, 2009, by the President, and is officially the Financial Crisis Inquiry Commission (FCIC). It is rather pecular that a White Commission is charged with determining causes while, at the same time, the Administration is proposing new financial regulations. Is the cart getting before the horse?

It seems remarkable that so many ignored warning signs, regardless of differing schools of economic thought. An acquaintance often remarked over the last 10 years that something was wrong because of the burgeoning credit. It seems that he, along with many current protesters, somehow comprehends via some kind of gut reaction that things were, and still are, not right. It is sad that current protesters seem to be denigrated when protesters at other times have been regarded as patrotic or civic minded.

Readers of Meltdown will find a detailed examination of the Federal Reserve Board's and government's actions that caused the recent financial crisis, and, quite, possibly, more warning signs of more problems they may be causing. Woods ends, "...we can follow the...suggestions that prolonged the Great Depression and gave Japan its slump of nearly two decades, or we can try a different approach...." from what we are now experiencing.

-30-

BOOK REVIEW by Joanne B. Conrad, Strength in What Remains

Strength In What Remains
by
Tracy Kidder
(Submitted 9/25/09. Revision submitted 10/12/09.)

Published 10/22/09

Smells of burning flesh, decapitations by machetes, bodies floating in the rivers, swarming flies, and wild dogs carrying human body parts in their teeth would haunt Deogratias forever. This is the gripping ordeal of a 24 year old East Central African’s escape from the Tutsi’s and Hutu’s genocide in Burundi and Rwanda in 1993-94. Various estimates range from 300,000 to 1 million slaughtered, and millions of refugees.

Deogratias, named from the Latin Thanks be to God that his mother had learned in church, grew up in the mountains of Burundi tending cows and farming with his family. So poor that one pair of shorts and one shirt were laundered every night to attend school, he was an eager and gifted student. He wanted to study medicine to help his community overcome numerous diseases. He excelled in school, passing rigorous exams and was offered a scholarship to a Belgian university. (Burundi had previously been a Belgian colony.) He eventually attended medical school in Bujumbura, the capital, where he began to hear about his country’s ethnic antagonism and ethnic wars in both Rwanda and Burundi. But the medical school was paradise compared to his earlier years. While there, he befriended Jean, a wealthy student who later helped his escape to New York City.

One might think that was the happy ending to Deo’s journey, but his first years in New York were almost intolerable. Indeed, the author states, “I would not have survived.” Prior to Jean’s help in getting to New York, Deo’s experiences in Burundi in 1993-4 were horrendous. He was interning at a hospital in northern Burundi, when the President of Burundi (a Hutu) was killed on October 22, 1993. Violence erupted, and for six months Deo was on the run trying to avoid both Hutus and Tutsis who were burning villages and slaughtering each other and had decimated the hospital, its workers, and patients. Deo had hidden under his bed and was able to escape. He finally reached Rwanda then to Bujumbura where Jean’s family gave him money and tickets to the USA. He landed at JFK Airport and a baggage handler offered him help. Sleeping in abandoned tenements, or in Central Park, surviving on just milk, bread, and cookies, he found work delivering groceries from 7 a.m. to 7 p.m. for $15 a day.

Miraculously, one of his deliveries was a church in Manhattan where he became acquainted with one of its workers who helped him find medical care and a decent place to live. His life changed because a generous couple gave him a place to live, encouragement, and financial help. Deo’s “strength in what remains, ” the rest of his story, his return to Burundi, and his new Burundi Village Health Works are truly remarkable.
-30-