more-on Keynesian failures

WaPo's Sarah Kliff in the C-J on the latest efforts to buy votes with our own money &/or efforts to "stimulate" the economy by robbing Peter to pay Paul...

The Obama administration will announce as much as $1 billion in funding today to hire, train and deploy health care workers, part of the White House’s broader “We Can’t Wait” agenda to bolster the economy after President Barack Obama’s jobs bill stalled in Congress...There will be an emphasis on speed, with new programs expected to be running within six months of funding...

Then again, the emphasis on speed is interesting, because fiscal policy is notoriously slow (in general) and President Obama has avoided "shovel-ready jobs" to pursue other agenda items. Here's the WSJ editorialists on an example:

President Obama used to be fond of "shovel-ready projects." He's also demanding that Congress pass his jobs bill immediately because 9% unemployment is a crisis, and, by the way, he's for making the U.S. less reliant on energy from tyrants. So how about putting 20,000 Americans to work on a North American energy project that's as shovel-ready as they come? Sorry...The $7 billion project is TransCanada's Keystone XL, a 1,700-mile underground pipeline that would deliver 830,000 barrels of heavy crude oil a day from Alberta to refineries in Oklahoma and Texas...He's president of the 1%.

Then, there are the broader discussions of Keynesianism's intellectual death 40 years ago and its more recent failures in the policy realm. Here's Tim Cavanaugh in Reason...

Nobel Laureate Paul Krugman, a prominent voice in favor of Keynesian economic intervention, argued that the 2009 stimulus failed because it was not large enough to close a gap in aggregate demand. But the most important goal of the stimulus was achieved almost a year ago: Consumer spending returned to its pre-recession level in the last quarter of 2010...

So why aren’t Krugman and other Keynesian interventionists cheering? John Maynard Keynes’ general theory teaches us that now should be Miller Time. According to the standard [Keynesian] macroeconomic model, you revive a stagnant economy by closing the gap in aggregate demand. Taking up the slack in demand is supposed to be the heavy lifting of an economic recovery, the part of the job so big only the government can do it...And yet the economy stays narcotized...

“There’s really nothing in Keynesian theory that encompasses indebtedness—consumer indebtedness and corporate indebtedness,” Higgs said in a phone interview....Higgs points out that while spending is back, investment remains low...Higgs and others hold that money is staying in the vaults because of regime uncertainty. The Patient Protection and Affordable Care Act, passed in 2010, has created a new panoply of expenses for anybody looking to hire an employee, but the full range and nature of those expenses can’t be measured even by a team of lawyers...