Sunday, 4 September 2011
Slí Eile: Good piece from Ed Balls in the Observer this morning here. No doubt it will be said Keynes applies everywhere in the world (the folks who buy our exports) but not here in Ireland (Small Open Economy, import leakage, not much leeway on cash holdings and of course the bogey man of the Troika who would never allow for a fiscal-led stimulation of the economy - so we are told). Mind you that was exactly the same argument used here in the 1950s to justify completely balanced budgets. And at that time we scarcely had much economic sovereignty (which was one of the arguments for joining the 'Common Market' in 1973. With balanced budgets in the 1950s came prolonged stagnation from 1950 to about 1958. Keynes was no socialist but he understood better than most the dynamics of markets and economies. He also understood the politics that might emerge from post-war Europe and the need for effective global institutions.