Toronto Star: The upside of the economic downturn

[marmar]

The upside of the economic downturn
Financial contractions tend to expand our thinking. From launching public works to forcing regulators to actually regulate, hard times can impose aberrant far-sightedness

Nov 30, 2008 04:30 AM

Kenneth Kidd
Feature Writer


"It is as though a farmer, having tapped his barometer after breakfast, could decide to move his capital from the farming business ... and reconsider whether he should return to it later in the week."

- John Maynard Keynes on the stock market, 1936


The great British economist is getting a lot of airtime these days, his name invoked as a kind of blessing from the grave as governments around the world spend billions upon billions of dollars hoping to stave off economic disaster.

As with most such invocations – and that would include those right-wingers who lean on Adam Smith for support – the implied endorsement is often way off the mark. It goes much too far, and leaves out too many of the man in question's real-world caveats.

But there is an important thread of Keynesian thought that is moving back into our collective consciousness. It has to do with capitalism's great fault line, the one separating the financial markets (which are inherently short-term in outlook) and the real economy (which can't, sustainably, be short-term in nature).

You're either in farming or you're not.

There is, after all, something called the "long term," which for those unfamiliar with the expression involves a period beyond the next two fiscal quarters, next year's budget, or tomorrow's lunch.

Keynes may have joked that in the long run we are all dead, but that doesn't mean the long term ceases to exist, that it isn't crucial.

As bad as the current recession may well become, this may be the downturn's salutary upside: We are starting to bring the longer term back into view.

You see it in the big push for government spending on infrastructure – to repair and build roads, transit, airports and dams, anything that keeps us safe and facilitates commerce over the long haul. ........(more)

The complete piece is at: http://www.thestar.com/news/ideas/article/546009

[Joe Chi Minh]

1. I like this mordantly witty putdown of the loony-toons who run our lives:

"There is, after all, something called the "long term," which for those unfamiliar with the expression involves a period beyond the next two fiscal quarters, next year's budget, or tomorrow's lunch."

Bang on the mark too, isn't it? A timely correction in the crooked and half-witted outook of our Anglo-American governments, for all the suffering that's in the pipeline, even as we're already beside ourselves with anger at what it's doing to countless people's lives right now.