In times of mounting unemployment, economists cling to the legacy of John Maynard Keynes like no other, associating his name with the escape from the Great Depression and the rescue of capitalism.
The British economist’s revolutionary insight was that the economy had no self-correcting mechanism that would end a slump, that the economy like a sinking ship could founder and leave society destitute indefinitely.
The Keynesian prescription was for government to step in where dispirited businesses would not and spend borrowed money like crazy on anything that would get the unemployed back to work.
Ironically, President Franklin D. Roosevelt, closely linked to Keynes historically, never really practiced Keynesianism to its full extent because of political pressure to balance the federal budget in the 1930s, economic historians said. The U.S. economy revived only when factories revved up for World War II.
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