Emeritus Prof Christopher MayJan 10, 2025

The hypocrisy of fiscal economics:

When there is a crisis in the real economy, we are told austerity is needed to restore confidence & encourage growth - the neo-classical economic solution.

When there is a crisis in the financial serves sectors we are told what is needed is liquidity & stimulus to restore confidence & encourage growth - a (narrow form of) Keynsian response.

So its not so much Keynes has been rejected, but rather its only applicable when the rich are in trouble!

#economics

Show threadBob ThomsonJan 10, 2025
@ChrisMayLA6 as someone said the other day on here, when the poor are said to need motivation, money is taken away from them. When it’s the rich who need motivation, money is given to them.
Show threadEmeritus Prof Christopher May

@bobthomson70

Its one of the great conundrums of economics... and revelatory of the skewed notions of incentivisation.

You can (sort of) square the circle, if you want by taking the line that only work should pay, and so the wealthy execs need more money to incentivise them, while the poor need to have their benefits taken way to ensure they work to stay alive (the ultimate incentivisation); but that leaves the vexing question of relative rates of pay.

but as an approach its morally bankrupt

Jan 10, 2025 at 2:07pmWeb