Thats why they call it "voodoo" economics - no basis in reality.
Exactly. It has little basis in facts.
A couple of years ago I read several books written by economist Paul Krugman, which alluded to this suppression of non-neoclassical thinking. Krugman stated that some university economics departments took great pride in not ever mentioning Keynes's name in their classes.
Clearly there has been a deliberate, and well-funded effort to suppress
logic-based, and fact-based economic theory. Keynes arrived at his theories from honest observation of facts and application of simple logic.
I've mentioned this before, but I'll mention it again. Prior to having anything more than an "intro" economics class, I came to exactly the same conclusions Keynes did, based simply on logic. I actually arrived at the concept of
"aggregate consumer demand" independently, without having ever even heard of the term "aggregate demand." (and since my earlier "intro" class had been taught by a
neoclassical economist.) It was only later that I realized that Keynes had already come up with the term "aggregate demand" (and only about 3/4 of a century earlier).
The message from my own "derivation" is obvious. Keynes's concept of
aggregate demand is the product of logic, common sense, and observation of reality. Keynes even states as much in his book "
General Theory..."
The idea that someone needs to actually
purchase production, in order for production to continue, is just common sense. Even a layman can understand that concept. However, it may well take an Economics Ph.D. to concoct a twisted, bizarre myth to refute it. That's been the push in the field of economics for over 30 years-- to disprove the obvious. That's why all of the Right-Wing economics "think-tanks" were created-- to disprove Keynes common-sense economic theories. To replace common sense economics with self-serving economic mythology.
Unfortunately, they've deceived a lot of people into believing in their economic mythology. Fortunately however, not everyone has fallen for it. But those who haven't are rarely heard. Most demand-side economics writings (from the so-called "liberal/left-leaning" economists) don't find their way into the American media or publications.
Most of the profound (and profoundly "logical") writings I've read come from foreign newspapers and journals. This is because anything not favorable to increasing the short-term profits of big business and Corporate America is shunned.
Fortunately, a few voices, such as Krugman, Baker, Batra, Paul Craig Roberts, and Roubini,
are still heard. But they're often drowned out by the vast Right-Wing, economic voodoo machine (think Larry Kudlow, CNBC, and Fox pseudo-News.)
We truly
do have a "faith-based" economy. An economy that's being kept afloat by hot air alone. But hot air eventually cools. And when it cools, it falls. So will our economy.