Keynesian cul-de-sac

Keynesian economics was invented to justify government intervention in our daily human affairs. A benevolent observer might argue that this was a necessary evil to steer the world through the explosive first half of the 20th century and its aftermath.

Today, however, Keynesianism is fast approaching its expiry date.

Modern monetary theory, arguably Keynesianism brought to its grotesque extreme, is the promise that economics can be insulated from the inconvenience of reality.

Such promises usually do not last long as the Bank of Japan is currently doing its best to prove. The implosion of the Yen carry trade is poised to broadcast the news to the rest of the world.

Dorothea Lange’s “White Angel Breadline, San Francisco” (1933)