I’ve posted Entry #28 in my weekly Investing: The New Rules column at the Death by 1,000 Papercuts site. It’s called Keynesianism With A Conservative Twist!
Juicy Excerpt: The problem with Adam Smith economics is that it is too rational. Everything in Adam Smith economics makes sense. The trouble is that it is humans who must follow these economic principles. And the humans are not rational! Humans are partly rational and partly emotional creatures. So the humans never behave in the manner in which Adam Smith economics says they should.
Too much irrationality causes recessions. The Adam Smithers have no plan for dealing with irrationality. This is always the opening for the Keynesians. We get scared by recessions and we turn to crazy, liberal economic ideas to overcome them. Conservatives need to incorporate a way of dealing with recessions into their economic thinking.