Topic: Keynesian vs Austrian Economics Debate

[Libertas]

http://www.zerohedge.com/news/2014-09-22/illustrated-guide-keynesian-vs-austrian-economics

Advice?  Review the chart, then skip down to the Radical Marijuana & Ghordius comments, cut through the militarist rant and such and you are left with what I think is the proper context - Keynesianism is the guns and butter in a chaotic warring world model and the Austrian School the peacetime ideal, but the lure of Keynesian leverage is too strong to resist and while the long term health of banking would be best served by Austrian policies the bankers sold their souls to the politicans and big government and they have a death-grip on each other.  There is no easy way out of this, if there was it would have been taken a long time ago.

Logic and common sense would be nice, but economies are run on fear, not sense.  Avoidance of (fill in the blank) is the only strategy of the PTBs, the protection of neoaristrocratic wealth would otherwise be threatened by the chaos of freedom and real choice.

[Weisshaupt]

 Keynesian economics cannot be used to justify government borrowing to stimulate consumption. This poster describes  Neo-Keynesian economics..
Likewise the Austrian School tends not to model the irrational aspect of human market participation - assuming rational actors only.
In real life you will have largely irrational emotionally driven bubbles - be then in tulips, stocks, real estate or iPhone 6/iWatch production.

Over time of course those emotionally driven bubbles die- so the Austrians are right in a macro sense, but you aren't going to predict daily behavior using their theories. Rational Behavior eventually returns to the markets, but there are periods of just plain stupid.  Political Calculations used to do charts showing the periods of order and disorder.. with disorder being largely the results of irrational behavior.

Of course when you have Central banks deliberately creating chaos,  disorder is to be expected....because the only rational act is to not play in the market.