Last fall, I wrote a post asserting why Keynes was wrong. I didn't go to Harvard. I didn't even get my Bachelor's degree. I dropped out after two years. The folks at Harvard Business School studied it and found out that Keynes, to their great surprise, was wrong. Professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman's ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent, according to their working paper, "Do Powerful Politicians Cause Corporate Downsizing?""It was an enormous surprise, at least to us, to learn that the average firm in the chairman's state did not benefit at all from the unanticipated increase in spending," Coval reports. It's common sense, if you just sit down and think it through. I'm not a genius; I'm just willing to challenge the assumptions and work the problem.The hardest thing in the world is to see things as they really are. Not that this study and its findings will slow down bankrupters like Obama and Pelosi and all of the other big spenders. But for those who read my site, now you know. Are you going to let the politicians bankrupt your children? Or will you do what it takes to protect their future? |
