New Deal Means A Sort of Old Liberal Keynesianism

Yesterday I noticed an interesting trend on the financial investments blogs – many started to talk recently about a New Deal. Which is normal, don’t get me wrong – with stagflation and investments decimated in the US, with the BRIC markets trailing behind expectations and a sluggish Europe, things look hardly “rainbowy” for the global asset managers.
Which of course gets the economic policy makers and thinkers worried. Especially in the US, the world’s powerhouse in economics 101. No wonder that famous and serious bloggers, such as Rortybomb, turned their attention to that. After all, what’s easier than taking an old wheel, polishing it and using it to restart a virtuous economic cycle?
My short answer is – everything. The neo-liberal thinking pushed the US economy in this prolonged recession – by allowing the US government to throw billions of dollars into several sector’s arms which used them sub-optimally. Of course, all those blogs are against this policy. Or pro this policy with changes (big or small).
Then, what’s the problem? Why do I argue for a new paradigm?
It is very simple. It is called “behavioral finance”. And NLP. 2 in 1, crash course my friends:
1. New Deal is an old paradigm

2. Most thinkers spend energy pondering about it
3. Naturally they come with a slightly modified new old paradigm
4. Naturally the New New Deal will work better, but again – sub-optimally.

What I am arguing for is a completely new economic policy paradigm. Brainstorming. Out of the blue. Which of course upsets the current equilibrium and introduces unexpected variables and problems into our brave new world. But this new paradigm should move us much further than the dusting off of several decades of liberal theories, which brought prosperity and start to show their limitations. Dixit!

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