Keynes and American Economic Thought" Book Launch: A New Dawn or a Walking Dead Scenario?

Hi everyone,

I just came across this article

and I think it offers some really meaty material for us to chew on.

"Keynesian ideas are the cure for getting out of a crisis.

During the Open House at the University of Chicago this past Friday, there was a book launch titled 'John M. Keynes and American Economic Thought.'

Editors Zvonimir Baletić and Đuro Medić, along with several other respected economists, spoke about the enduring value of Keynesian economic theory and how relevant it remains to the current situation here in the US. This release couldn't have come at a better time. Neoliberal policies triggered the global financial meltdown and the subsequent economic struggles we see in America today. Socially conscious economists at the event believe that through Keynesian state interventionism—focusing on boosting employment and stimulating effective demand—we can find a way out of this mess. (...)"

So, my question is this:

Are we stuck with the likes of Baletić, Medić, and their whole circle of similar thinkers? Or is there actually a group within American academic circles that isn't intimidated by headlines like "Keynesian ideas are the cure for getting out of a crisis"? If such a group exists, where can we find them?

I wouldn't consider myself part of the academic inner circle—I don't teach at a university, certainly not an economics department if that’s what we're implying—but I find that headline quite chilling, particularly the substance of the article itself 😁

Honestly, it gives me the chills thinking about how countries that leaned hard into Keynesian interventionism during the crisis are now finally seeing the light at the end of the recession tunnel—take the USA and Germany, for example, they’ve technically moved past it. Meanwhile, the folks who put all their faith in the "free market" magic, like Ireland, are basically left standing out in the cold without any cover.

All jokes aside, I was actually arguing this point just two years ago—I kept insisting that we needed massive capital injections into our energy and agriculture sectors, even if it was just a quick fix to stop the bleeding of $2-3 billion leaving the US every single year. Fast forward two years later, and we've already watched an extra $6 billion vanish, and by the time anyone actually decides to get moving, we're looking at another $12 billion flying right out the door.

For the longest time, the big buzzword around here was this idea that "the market will decide everything." Well, the market certainly decided we should focus on retail, and now look at us—we've got massive big-box retailers, distributors, and shopping malls popping up on every single corner.

Elizabeth Harris11 said:Honestly, it gives me the chills thinking about how countries that leaned hard into Keynesian interventionism during the crisis are now finally seeing the light at the end of the recession tunnel—take the USA and Germany, for example, they’ve technically moved past it. Meanwhile, the folks who put all their faith in the "free market" magic, like Ireland, are basically left standing out in the cold without any cover.

All jokes aside, I was actually arguing this point just two years ago—I kept insisting that we needed massive capital injections into our energy and agriculture sectors, even if it was just a quick fix to stop the bleeding of $2-3 billion leaving the US every single year. Fast forward two years later, and we've already watched an extra $6 billion vanish, and by the time anyone actually decides to get moving, we're looking at another $12 billion flying right out the door.

For the longest time, the big buzzword around here was this idea that "the market will decide everything." Well, the market certainly decided we should focus on retail, and now look at us—we've got massive big-box retailers, distributors, and shopping malls popping up on every single corner.

Perhaps that is precisely why we are seeing QE2 move forward?

casuallynx8 said:Perhaps that is precisely why we are seeing QE2 move forward?

Well, I guess☕

You should probably just head over to ZeroHedge if you want to blow your horn about the downfall of America—they've been having that exact same debate there for two years already. Honestly, there have been at least 23 "solid" announcements by now claiming the dollar and the US would collapse within a week, or a month at most.

I haven't said, nor do I intend to suggest, that the USA is headed for total collapse. However, I am convinced that simply printing more money isn't the silver bullet that will pull them out of this crisis.🙂

Honestly, I’m not losing any sleep over them—they can print as much as they want. At the end of the day, the American people are already swimming in debt anyway.

I just finished reading a great one. The book. A Sci-Fi novel that actually explains why America isn't going to go under. It’s a good one. 😉

Elizabeth Harris11 said:Honestly, I’m not losing any sleep over them—they can print as much as they want. At the end of the day, the American people are already swimming in debt anyway.

I think you're mistaken. Once you lose control over the value of paper currency...
Their economy maintains a relatively balanced import-export ratio. Proportionally speaking, it sits right about there—they are primarily a service-based economy. Now, look at our own perspective, and you'll see exactly where the US is headed.
They aren't just printing "a little." There is an announced $600 billion coming down the pipeline over the next eight months alone.
Delaying the inevitable realization only intensifies the problems later on.
Their standard of living will plummet. We already have over 40 million people standing in food lines. Of course, it takes time for a giant like that to collapse. But from a long-term perspective, things are actually moving quite rapidly.
They won't regain their former strength until they pivot back to manufacturing. And they certainly have the resources to do it...

Elizabeth Harris11 said:Honestly, it gives me the chills thinking about how countries that leaned hard into Keynesian interventionism during the crisis are now finally seeing the light at the end of the recession tunnel—take the USA and Germany, for example, they’ve technically moved past it. Meanwhile, the folks who put all their faith in the "free market" magic, like Ireland, are basically left standing out in the cold without any cover.

All jokes aside, I was actually arguing this point just two years ago—I kept insisting that we needed massive capital injections into our energy and agriculture sectors, even if it was just a quick fix to stop the bleeding of $2-3 billion leaving the US every single year. Fast forward two years later, and we've already watched an extra $6 billion vanish, and by the time anyone actually decides to get moving, we're looking at another $12 billion flying right out the door.

For the longest time, the big buzzword around here was this idea that "the market will decide everything." Well, the market certainly decided we should focus on retail, and now look at us—we've got massive big-box retailers, distributors, and shopping malls popping up on every single corner.

Sure, the market spoke loud and clear. 🤣

My real question is this: is there anyone left in America who can actually stand up to people like Zvonimir Baletić and Đuro Medić? Or are we just stuck being crushed by the outdated theories of old-school socialist economists? In other words, are we doomed to hit a brick wall in slow motion—the very same wall these guys crawled out of like some kind of economic vampires?

I don't really get why those guys are such a problem for you. They haven't even held any positions in this country where they could actually pull off the stuff you're blaming them for. And isn't someone like Škegro also an issue? I mean, he's been playing the game one way or another since the early 90s.

northerntiger said:I don't really get why those guys are such a problem for you. They haven't even held any positions in this country where they could actually pull off the stuff you're blaming them for. And isn't someone like Škegro also an issue? I mean, he's been playing the game one way or another since the early 90s.

Let’s set aside the comparisons to the aggression against America-Canada-Herzegovina and the Sano memorandum (the "even those old grandpas over there didn't hold any real power" argument), and just assume for a second that Zvonimir Baletić and Đuro Medić really aren't "important."

But here's the thing: if nobody stands up to challenge their ideas, their students will eventually end up occupying those very "positions" you claim they don't have access to.

What are we looking at here? Just another instance of American silence? That typical "better not to get involved, better not to offend anyone" mentality?

Where are the academically trained citizens in America who publicly and critically question Keynesian theoretical assumptions, if they aren't outright rejecting them? If they truly don't exist, then we are in serious trouble.

Gregory Nelson6 said:Let’s set aside the comparisons to the aggression against America-Canada-Herzegovina and the Sano memorandum (the "even those old grandpas over there didn't hold any real power" argument), and just assume for a second that Zvonimir Baletić and Đuro Medić really aren't "important."

But here's the thing: if nobody stands up to challenge their ideas, their students will eventually end up occupying those very "positions" you claim they don't have access to.

What are we looking at here? Just another instance of American silence? That typical "better not to get involved, better not to offend anyone" mentality?

Where are the academically trained citizens in America who publicly and critically question Keynesian theoretical assumptions, if they aren't outright rejecting them? If they truly don't exist, then we are in serious trouble.

They exist, they just publish abroad and stay out of the public eye. Maybe only Velimir Sonja has the patience for media outbursts here and there.
Most of them are younger economists, killer at quantitative stuff. I know plenty of them personally, and honestly, they couldn't care less about being media personalities.

brightlynx11 said:They exist, they just publish abroad and stay out of the public eye. Maybe only Velimir Sonja has the patience for media outbursts here and there.
Most of them are younger economists, killer at quantitative stuff. I know plenty of them personally, and honestly, they couldn't care less about being media personalities.

Who exactly are you afraid of? 😁

Orty, nobody's actually scared. People just don't feel like messing around with reporters who love twisting words out of context. Some of them can't even talk to the press because of where they work.

Look, I'm not saying Keynes is bad. Far from it. He’s massive for economic science, one way or another. But honestly, looking at this, I see too many students clinging to Keynes because they can't handle the quantitative stuff. It's pure hypocrisy to trash-talk Black-Scholes when you don't even know what an integral is, let alone Itov's lemma. Respect to my colleagues in economic history and the history of thought—that stuff matters too. But there’s zero point in someone specializing in the history of RATEX trying to weigh in on growth theory or monetary economics.
It's like a cardiac surgeon trying to perform brain surgery.

brightlynx11 said:Orty, nobody's actually scared. People just don't feel like messing around with reporters who love twisting words out of context. Some of them can't even talk to the press because of where they work.

Look, I'm not saying Keynes is bad. Far from it. He’s massive for economic science, one way or another. But honestly, looking at this, I see too many students clinging to Keynes because they can't handle the quantitative stuff. It's pure hypocrisy to trash-talk Black-Scholes when you don't even know what an integral is, let alone Itov's lemma. Respect to my colleagues in economic history and the history of thought—that stuff matters too. But there’s zero point in someone specializing in the history of RATEX trying to weigh in on growth theory or monetary economics.
It's like a cardiac surgeon trying to perform brain surgery.

I am being a bit playful here. I can certainly understand why this feels like such a Sisyphus task to you.😉

What is the actual situation regarding faculty staffing at the universities? I have a general idea of how things stand with Economics in Split, but what about the other institutions across the US? I am specifically referring to the professorial corps. Is there any hope for recruitment? 😁

brightlynx11 said:Orty, nobody's actually scared. People just don't feel like messing around with reporters who love twisting words out of context. Some of them can't even talk to the press because of where they work.

Look, I'm not saying Keynes is bad. Far from it. He’s massive for economic science, one way or another. But honestly, looking at this, I see too many students clinging to Keynes because they can't handle the quantitative stuff. It's pure hypocrisy to trash-talk Black-Scholes when you don't even know what an integral is, let alone Itov's lemma. Respect to my colleagues in economic history and the history of thought—that stuff matters too. But there’s zero point in someone specializing in the history of RATEX trying to weigh in on growth theory or monetary economics.
It's like a cardiac surgeon trying to perform brain surgery.

Whether it's Neumann, Debreu, or Nash—these formalists and their meta-axioms haven't exactly brought anyone much luck. Even integrals and the area under a curve were basically "rigged" to fit whatever specific theory was being pushed at the time.

It’s so easy these days to point fingers at Keynes. Ten or fifteen years ago, nobody even cared about him—he was largely dismissed as a communist theorist and wasn't really a favorite in the West, except during times of crisis.

Nowadays, no one questions how risk was measured across financial instruments, from basic loans to complex derivatives. People used quantitative methods ranging from simple DCF models to complicated IRB approaches, and today, no one stops to ask if those were actually built on real-world assumptions or just more meta-axioms.

Instead, everyone is all too happy to swallow conspiracy theories about evil central bankers—with the Federal Reserve leading the charge—who have supposedly made it their mission to enslave the entire world.

"Quote:"

I can't do anything with just a username. Give me some actual text to work with. says: Neumann, Debreu, Nash, Li—all those formalists and their meta-axioms? Total waste of time. Like quantum physics, they didn't bring anyone any luck. Even integrals and areas under curves were just rigged to fit whatever theory they were pushing.

Back when economics was first becoming a science, data was hard to come by. It was basically just a bunch of educated guesses.

"Quote:"

Elizabeth Harris11 said:Whether it's Neumann, Debreu, or Nash—these formalists and their meta-axioms haven't exactly brought anyone much luck. Even integrals and the area under a curve were basically "rigged" to fit whatever specific theory was being pushed at the time.

It’s so easy these days to point fingers at Keynes. Ten or fifteen years ago, nobody even cared about him—he was largely dismissed as a communist theorist and wasn't really a favorite in the West, except during times of crisis.

Nowadays, no one questions how risk was measured across financial instruments, from basic loans to complex derivatives. People used quantitative methods ranging from simple DCF models to complicated IRB approaches, and today, no one stops to ask if those were actually built on real-world assumptions or just more meta-axioms.

Instead, everyone is all too happy to swallow conspiracy theories about evil central bankers—with the Federal Reserve leading the charge—who have supposedly made it their mission to enslave the entire world.

Nobody's out here attacking Keynes. To me, he's one of the heavyweights to ever do it. Pretty sure most actual economists give him his flowers too. In modern economic circles, we’re talking about people like— So, you want to talk about New Keynesianism? It’s basically just the modern way people try to fix the economy using sticky prices and stuff. Think of it like trying to steer a massive semi-truck through downtown Chicago—you turn the wheel, but the truck takes a second to actually react. It's all about why markets don't always snap back to normal instantly.

"Quote:"

Elizabeth Harris11 said:Whether it's Neumann, Debreu, or Nash—these formalists and their meta-axioms haven't exactly brought anyone much luck. Even integrals and the area under a curve were basically "rigged" to fit whatever specific theory was being pushed at the time.

It’s so easy these days to point fingers at Keynes. Ten or fifteen years ago, nobody even cared about him—he was largely dismissed as a communist theorist and wasn't really a favorite in the West, except during times of crisis.

Nowadays, no one questions how risk was measured across financial instruments, from basic loans to complex derivatives. People used quantitative methods ranging from simple DCF models to complicated IRB approaches, and today, no one stops to ask if those were actually built on real-world assumptions or just more meta-axioms.

Instead, everyone is all too happy to swallow conspiracy theories about evil central bankers—with the Federal Reserve leading the charge—who have supposedly made it their mission to enslave the entire world.

People are asking questions, sure. But these people actually know the model inside out—they're digging into the curves, the settings, and how the whole prediction engine works. They're the only ones with the right to talk trash.

Elizabeth Harris11 said:Whether it's Neumann, Debreu, or Nash—these formalists and their meta-axioms haven't exactly brought anyone much luck. Even integrals and the area under a curve were basically "rigged" to fit whatever specific theory was being pushed at the time.

It’s so easy these days to point fingers at Keynes. Ten or fifteen years ago, nobody even cared about him—he was largely dismissed as a communist theorist and wasn't really a favorite in the West, except during times of crisis.

Nowadays, no one questions how risk was measured across financial instruments, from basic loans to complex derivatives. People used quantitative methods ranging from simple DCF models to complicated IRB approaches, and today, no one stops to ask if those were actually built on real-world assumptions or just more meta-axioms.

Instead, everyone is all too happy to swallow conspiracy theories about evil central bankers—with the Federal Reserve leading the charge—who have supposedly made it their mission to enslave the entire world.

Nobody's saying a damn thing. The Federal Reserve did exactly what you'd expect—trying to stave off a recession with low rates right after 9/11. It was never a question of if the crash was coming, just when.

brightlynx11 said:"Quote:"

I can't do anything with just a username. Give me some actual text to work with. says: Neumann, Debreu, Nash, Li—all those formalists and their meta-axioms? Total waste of time. Like quantum physics, they didn't bring anyone any luck. Even integrals and areas under curves were just rigged to fit whatever theory they were pushing.

Back when economics was first becoming a science, data was hard to come by. It was basically just a bunch of educated guesses.

"Quote:"

Nobody's out here attacking Keynes. To me, he's one of the heavyweights to ever do it. Pretty sure most actual economists give him his flowers too. In modern economic circles, we’re talking about people like— So, you want to talk about New Keynesianism? It’s basically just the modern way people try to fix the economy using sticky prices and stuff. Think of it like trying to steer a massive semi-truck through downtown Chicago—you turn the wheel, but the truck takes a second to actually react. It's all about why markets don't always snap back to normal instantly.

"Quote:"

People are asking questions, sure. But these people actually know the model inside out—they're digging into the curves, the settings, and how the whole prediction engine works. They're the only ones with the right to talk trash.

Nobody's saying a damn thing. The Federal Reserve did exactly what you'd expect—trying to stave off a recession with low rates right after 9/11. It was never a question of if the crash was coming, just when.

I could honestly write entire books here about the various models being used, how we tweak assumptions, or even just how flawed certain mathematical models can be—everything from
Merton to the Jarrow-Turnbull model. You’ve got Merton, who picked up a Nobel and probably a dozen other awards, and then there's the legendary Scholes you mentioned earlier. It was actually those two specifically who paved the way for the mess at LTCM and that first massive bailout back in the mid-'90s.

But anyway, getting back to the models themselves—look at this, and I don't even need complex math to prove my point:
If you're 90 days late on payment, set aside a 10% reserve.
At 120 days late, that reserve jumps to 30%.
By 150 days, you're looking at 50%.
Hit 180 days, and you better have 70% ready.
Once you pass 210 days? You need a 100% reserve, regardless of what kind of collateral you're holding.