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Not enough consumption?! If this makes your had spin, then you're too much of an environmentalist to be of much use in the approaching financial strom. But think about it. For example: there is not a large enough market for electric cars. Why? Because an electric car is too expensive? Or because the average worker does not make enough to afford an electric car and is forced to make the socially poorer choice of sticking with an internal combustion engine?
When I read Keynes' General Theory last year I was greatly impressed. And, in Keynes' view of macroeconomics, demand makes the world go 'round and expectations drive demand. That's how you get the focus on consumer confidence, which for many years I thought was a joke of an indicator when I saw if mentioned in the news.

Now, this may be down to my poor knowledge of economic writings, but I don't think Keynes' theory which he outlined in a qualitative, handwaving way, has actually been developed. IMHO he's economics' Galileo waiting for a Newton.

Now, if you're an environmentalist and believe in some sort of steady-state economics as the necessary configuration of our global economy, I am not quite sure how that is compatible with Keynes' macroeconomics. But it must be, somehow.

Great diary, by the way. And I really enjoyed the story of how Eccles ended a bank run in two days. Clearly too many retail bankers, even today, don't know about this. Or, at least, the bozos at the helm in Northern Rock didn't know about it.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Tue Dec 4th, 2007 at 10:29:59 AM EST

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