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An Engineer's Critique of Keynesianism

Though Keynes raised many good questions, and made a critical observation regarding wage formation which I've adopted, I will argue he ultimately fumbled at the one yard line. Complicating such a claim is the fact that there are numerous interpretations as to what Keynes "really really" meant. As a result, I will restrict myself to a couple core concepts that are generally treated as traditional Keynesian.

Supply-Side Economics' Maraschino Cherry

If you want to get a liberal's blood boiling, simply mention the phrase Supply-Side Economics at the next cocktail party. Be extra careful not to toss in additional synonyms, such as Reaganomics, Voodoo or Trickle-down economics, because his fuse might pop. Should I find myself at such a party, I would try to play peacemaker by asking the party attendees to consider the possibility that both the Left and Right share the same core economic defect: free trade. In other words, nearly all schools of economics amount to Voodoo.

Rig Count Keeps Falling, Oil Production and Crude Inventories Keep Rising

US oil and gas drilling operations continued to shut down at an unprecedented rate last week, as Baker Hughes reported the rig count on February 13th was at 1358, down by a record 98 rigs from February 6th, with oil rigs down 84 to 1056, gas rigs down 14 to 300, and rigs classified as miscellaneous unchanged at 2.  This follows last week's report when total US drilling rigs in use fell by 87,

Retail Sales Fall 0.8% on Drop in Gasoline Prices

Retail sales started the new year down, but the drop in sales was due to lower gasoline prices.  Specifically, the Advance Retail Sales Report for January (pdf) from the Census Bureau estimated that our total seasonally adjusted retail and food services sales were at $439.8 billion in January, which was a decrease of 0.8% (±0.5%) from the December sales of $443.3 billion, but 3.3 percent (±0.9%) above sales in January of last year.  December's sales were revised up by less than 0.1%, from $442.9 billion,

Real GDP Grows at A 2.6% Rate in 4th Quarter as Deflator Turns Negative

Friday’s report on our 4th quarter GDP was particularly interesting in that the inflation adjustments for large components of our national output turned negative, which meant that when the inflation adjustment was applied, what appeared to be lower or just modest increases in spending actually represented larger increases in goods and services procured, and hence indicated a larger contribution to our output than the nominal dollar amounts would lead one to believe.    The

The Fed's Not So Excellent Adventure

Quantitive easing, qualitative easing, yield curves, repos, interbank loans, interest rates, reserves, sterilization, discount windows, open market purchases, monetization, and of course mesmerization to calm the speculators are just some of the monetary gears and wheels that to the untrained eye appears to be a Rube Goldberg machine that no mere mortal can comprehend. To others it is not a machine, but a dance where bond and stock markets undulate to the monetary music emanating from the central bankers.