After spending 30 years as skeleton in the closet, the quirky Lord married to a crazy Russian Lady is brought forth again, dusted off, and presented as the Messiah of economics.

A second rate actor playing the role of President of the United States and a lower middle class housewife cleaning the office of the Prime Minister of the United Kingdom had once put him in the closet. In his stead they brought forth from the grave some Victorian economic theories that have just spectacularly crashed.

The move by Reagan and Thatcher was about as logical as issuing doctors with bone needles for sewing or renaming General Motors into General Sledge and ordering them to ignore the invention of the wheel. But reawakening Keynes from his slumber now might prove to be just as daft.

The politicians, bankers and economic experts who are sitting around the huja board are still the same that brought on the financial crisis. That is not a good start. None of them will be able to remotely match the old Lord for brains, as he was far more than a mere economist, his interests ranging through moral philosophy, the arts, and probability theory. These added interests were a part of his view when talking about economy, and they are completely lacking in those now wanting to use his theories.

Read more in International Business and Trade
« Buying Agricultural Plots in India: for Nre’s
The Domino Effect »

Instead, they run for the printing press to let out money by the bundle and spend it, if necessary by investing directly into businesses or public work schemes. Further, they declare saving as useless if not even treasonous against the country. Keynes had stated that saving is not possible for everyone at the same time. Savings derive from income, income is generated by turn-over, and turn-over results from spending. With no economic activity, income dries up.

But when Keynes formed his theory, there were savings around. Now there aren’t, as people have spent on credit hell-bent for leather for years. The only savings I can see are bankrupt pension funds, government and private ones alike.

It all comes down to fact at the end that what governments did best over the last 30 years was spending money needlessly. They will be hard put to find even more ways of squandering money. And Keynes was not of the opinion that endless spending, borrowing and soft living were essential to economy. He rather advocated a reasonable balance between fiscal spending and free trade, without being a friend of free trade himself.

If the dim wits responsible for this crisis don’t find a brain that is able to apply Keynes reasonably to the present situation, we are looking forward to a very bleak outcome.