News Tip: Keynes Would Support Auto Bailout, Duke Economist Says
Tuesday, December 2, 2008
As American automakers submit their case today to Congress for receiving billions in government-backed loans, a Duke University professor says the famous late British economist John Maynard Keynes would favor such a plan but not under the label “bailout.”
“‘Bailout’ is one of those words that comes from older and wrong ways of thinking,” said Roy Weintraub, a Duke economist who teaches a course on Keynes. “We need an investment plan for the auto industry, which is guided by some larger vision than the current and past automakers have been able to provide themselves -- that’s a very Keynesian idea.”
Keynes was a prominent intellectual in the early 20th century whose ideas about economics gave a theoretical framework for New Deal-type policies in the U.S. and England, explained Weintraub, a member of the Center for the History of Political Economy at Duke.
Weintraub said if Keynes were alive today and called to testify before Congress, he would favor increased unemployment benefits and fiscal stimulus packages, while rejecting labels such as “socialism.”
“What Keynes called the animal spirits of the entrepreneur need to be re-energized,” Weintraub said. “We have to restore business confidence.”