The Lies of Keynesian Economics with Peter St Onge

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Peter St Onge is an Economist at the Heritage Foundation and a Fellow at the Mises Institute. In this interview, we discuss the differences between Keynesian and Austrian economics, the role of marketing in shaping public opinion, and the potential of Bitcoin to displace central banks and cut off one of the main channels that governments use to seize people's resources.
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TIMESTAMPS:
00:00:00 Introduction/Background
00:06:29 Keynesian economics versus Austrian economics
00:16:52 Economics in education; infantilisation of political discourse
00:31:58 Difficulty in operating a business in the US and UK
00:48:44 What should the role of government be?
00:56:57 Gold versus Bitcoin; a hyperbitcoinised world
01:11:48 Miami conference; the banking crisis
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#Bitcoin #Finance #Economics
****
“I want the frog to understand the water is getting hot before it actually boils. I want the people to understand the crap that’s being done to them before it actually starts to destroy their lives.”
- Peter St Onge
Peter St Onge is an Economist at the Heritage Foundation and a Fellow at the Mises Institute. In this interview, we discuss the differences between Keynesian and Austrian economics, the role of marketing in shaping public opinion, and the potential of Bitcoin to displace central banks and cut off one of the main channels that governments use to seize people's resources.
- - - -
Keynesian economics developed in the wake of the Great Depression of the 1930s. Its aim was to stabilise the volatility caused by market forces through the application of government and central bank resources. Its critics state it has opened up a range of tools that governments have exploited for short-term gain, whilst building up ever greater problems for future generations.
Keynes was mocked by major contemporary figures. Winston Churchill, who didn’t believe that state borrowing and expenditure could provide permanent additional employment, famously once said “If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.”
And yet, governments, on both sides of the political debate, seem to be currently addicted to greater monetary and fiscal interventions in the economy than at any time since the 1930s. Such actions started in 2008, but have continued apace since. They are a major factor in why global debt now stands at an eye-watering $305 trillion.
Hayek, the famous Austrian economist, foresaw the coming crisis, concluding that monetary policy only does harm to an economy. In 1976 he called for the denationalisation of money. In a famous 1984 interview, he stated “I don't believe that we should ever have a good money again before we take the thing out of the hands of government… all we can do is by some sly or roundabout way introduce something they can't stop.” Hayek essentially foresaw Bitcoin.
Unsurprisingly, Bitcoin’s trajectory, as an incorruptible digital hard money, started as the deflated global economy was patched up with Keynesian policies in 2009. Over 14 years later, as these policies become ever more unsustainable, it seems like we’re on the cusp of a swing of mainstream opinion away from Keynesian policies, to policies predicated on Austrian economic principles. And Bitcoin could be the centre of this new paradigm.

[@TheFinancialSecret]

I can honestly say this channel has changed my life. Thank you Peter for everything you do.

[@EdCross]

"Fiat is more complicated than Bitcoin" what a great quote. Great episode guys!

[@Luke-cj7gz]

Listening to Peter speak about the history of economics was fascinating

[@deineintube]

Peter is an excellent communicator.

[@freyawildesciencefictionau8156]

both Peters are. :)

[@derek.seaborn]

Great conversation today, boys!

[@kylewatson5133]

"What should the role of government be" The role of government can be anything you want PROIVDED that government is funded voluntarily. Once the government is funded voluntarily, that government is constrained, with the extortionist society we live in now, the government is unconstrained and will grow accordingly.

[@TheAdamAdy]

Thats basically anarcho capitalism. Where you can have government, if enough people want it, opt in and pay for it voluntarily

[@difigfs]

Good listen. I'm too from Philly and all for small government. With that said, I've been a GOP delegate in CA, I now live in FLA. Keep in mind, D R are often labels not true principles, unfortunately. Also, the President doesn't become evil....we are a REPUBLIC. They don't rule over us. They can't just do what they want. This is referring back to the beginning of the podcast. #DeSantis2024

[@freyawildesciencefictionau8156]

Love it. Great show both you Great Peters! ;)

[@stephenodey5147]

Total Excellent ⭐️⭐️⭐️⭐️⭐️⭐️⭐️⭐️⭐️⭐️

[@TomRaine]

This is superb. Turned this show into the best Bitcoin podcast. Great format, keep it up.

[@jameslovering9158]

How about a talk on what Austrian Economics is and how it differs from Fiat, and the pro's and con's with speakers in both camps ? All we ever hear is high level concepts such as small govt, as if this is the key feature. What about how will the credit markets work as most debt is created in commercial banks, how does this differ in Austrian Economics ? What happens in a crisis in Austrian Economics for example how would 2008 have played out OR how would have Covid played out ?

[@ScandinavianHeretic]

You know I've been wondering the same thing and I think the difficulty is that we don't know? ...I mean wouldn't we be guessing about what would have happened during Covid? What does happen if the government insists on self-determination for its citizens and freedom to make their own choices, or indeed doesn't have the power to coerce compliance under such circumstances? Both socially and economically...I have no idea.

[@razzberry1262]

Read "The Theory of Money and Credit" for your answers.

[@peteinthepocket9208]

Wow great one to both Peters, cheers gents

[@hOtneO]

The governments is too big, think about how much manpower it requires to regulate away your freedoms. And it's all possible with a Keynesian model where a central planner can just print money to infinity to pay for the government to get larger and then tax the constituents into poverty and misery with inflation which is a hidden tax.

[@bettermetalsnake95]

Don't Make Me Think is a fantastic book, it was used as part of the curriculum for my Web Development courses in college and it's one of a handful of books that I kept from that period instead of trading it back in to the bookstore for credit towards next term's books.

[@ollie714]

Amazing thanks guys

[@VISONICMEDIA]

Very interesting about the grade level scoring. I read a few years back that rap had gotten so popular and partially because it had an avg of 4th grade reading level use of words. I’m guessing marketers picked up on this and have lowered the threshold of intelligence needed to understand. In one way it makes it easier for more of the population to understand but on the flip side is it a massive disconnect between those making policy and those who are voting

[@VISONICMEDIA]

Aka the answer again comes back to education or the lack thereof

[@shuikuan]

Wow this was awesome! High quality & entertaining. Rare combo

[@anacap007]

One of the main driving forces of the Progressive Era was this steadfast belief in the Scientific Method. As the preceding decades brought about astounding advancements in technology, people became fascinated with this process and incorrectly try to apply it to other areas such as politics and social causes. It's this belief that everything can be quantified and every factor can be accounted for that gave birth to the Social Sciences. Things that follow the form of the Scientific Method but incorrectly applied. This is why and how Keynes' general theory was so widely accepted and adopted by the government because it allows the government to print money.

[@user-yq1rc6or9x]

Great job Peters and podcast!!!! This is a great one!!!! So pleased to have listened start to finish.

[@sandymilne224]

The guest was talking about Gammons Theory of Bureaucratic Displacement, which is a British theory, stating the fact that the size of bureaucracy grows until it consumes ALL the funding wished to go to any given social program.

[@TheRealDerekS]

the silent majority is speaking out, and what they're saying to both political poles is: "LEAVE US ALONE"

[@alienmoonstalker]

Great discussion. Thank you.

[@alessatrx]

I enjoyed this one

[@trosebtc2432]

I like your flex 💪🏼. Great job as always 👊🏼

[@donklee3514]

What is the Keynesian model? If you increase spending in bad times and decrease spending in good times you can create a more stable economic system with weaker boom bust cycles. This is the opposite of helping wall street. In fact, it would benefit everyone at the expense of the oligarchs. That is why the Chicago school and others were tasked with destroying the Keynesian implementation by whatever means necessary: Reaganomics. Boot and baptists is a great observation, but it can and should be used with equal enthusiasm as an argument against market fundamentalism. The financialization that occurs is not solely a Keynesian attribute as I'm about to point out. In reality, it is more of an attribute of everything in capitalism. Boot and baptists is also the same absolute that Milton Friedman (supposed classical economists) and the neo-cons/neo-liberals used to justify the bastardization of the Keynesian model for their own uses. Friedman argued that politicians would be fine increasing spending in bad times, but cannot be trusted to lower spending in good times. So don't even try. It absolutely will not work. Of course that is not true. Government contracts can be written by Congress in such a manner as to decrease the size of the contract during a boom cycle. The government contractor will be livid but it can be done. Friedman and the neo-cons/neo-liberals use the same logic to convince us all that increasing spending was good for the economy no matter what and that deficits don't matter. So as a result, Reaganomics was designed to borrow and spend ALL the time. Especially, on defense and empire. Blaming Keynesian economic theory for the results of Reaganomics is great sport, but it is also in very poor form. Give credit where credit is due. I believe it is a bit dishonest to tell people under the influence of Reaganomics that government spending is a problem with the Keynesian model. While it is true the both believe the government spending to influence economic activity, the Keynesian model at least had a mechanism for cutting spending. The mechanism for cutting spending under Reaganomics is a crash and more severe boom bust cycles that benefit disaster capitalist and wall street at the expense of society as a whole. What is a progressive? Someone who believes that opportunity is a scarce resource and to prevent the hording of said resource the tax code should progressively increase to disincentivize the hoarding of opportunity. Freeing it up for others. The idea is that if you increase the tax to 100%, no one is going to continue to accumulate opportunity if they receive nothing for doing so past that point. If you gradually increase the tax rate you gradually disincentivize the hoarding of opportunity. Progressives attempt to address a flaw in capitalism. Capitalism is efficient at creating more wealth but inefficient at distributing the wealth. Do you remember occupy wall street? The Corporate media would send a reporter to a park where a protest was going on. They would find a homeless person not part of the protest and interview them. That became the face of the movement. The same thing is true with progressives. Find a crazy person that calls themselves a progressive and paint them with a broad brush as the movement. That is what Peter just did. I agree with Peter to a point that Austrian economists are remnants. They were the first victims of the neo-classical marginalization of opposition. Austrian economists were the ones who first attempted a scientific approach to demand side economics. Demand side economists are rare now.

[@thevikas5743]

21:46 The best home schooling episode in disguise

[@LucasBitcoinnaisseur]

Peter St Onge aged like fine wine somebody should ask his routines

[@beerius2349]

excellent episode!

[@angusmcbraith]

Very interesting as always thank you

[@yoshi545825]

Fantastic

[@donklee3514]

I do love how non-Keynesian folks like to define or should I say mis-define Keynesian economics. Janet Yellen and Jerome Powell are not Keynesian. They are monetarists. The monetarists bastardized the half of Keynesian economics that suited them and in doing so created something completely different. Something that uses leverage to front load the economy and produce results that are the opposite of Keynesian goals. Keynes wanted to smooth out the business cycles (boom bust). Monetarists create chaos and offer themselves as the solution. Linking the two they way this guy just did is borderline academic dishonesty. I like the science of economics and hate the faith based religions of economics: market fundamentalism, neo-classical, monetarists, and that's right neo-Austrian economics. I like where this discussion was heading. Test your theories and if the evidence dictates discard them. In my opinion, the field of economics is inundated with religious charlatans that when faced with the inconvenient truth make excuses and double down. Some have done so for 43 years and will continue until the day they die. Good riddance, because it is time for the science of economics to assert itself: the economic renaissance. All three of us seem to agree on that, but if Austrian economics mixes with market fundamentalism then it provides no solutions only a waste of time testing. Doing the same thing over and over expecting different results is the definition of insanity and the economic religions. Don't get me wrong, I don't think of myself as Keynesian, but I think it is beneficial to learn from it. I don't consider myself a Marxist, but I think it is beneficial to learn from it. The same for Classical and Austrian theories. They all have something to contribute to the science of economics. All these false religions that you have to believe on faith and make excuses for SUCK. I really liked Lynn and Jeff's discussion very much. Analysts test their theories and lose someone money when they are wrong. You cannot get more scientific than that. The economic religions are full of gas lighting bullies with seniority and placement. Scientists are selectively removed from the labor gene pool in the form of selective breeding in the hiring and publishing process in favor of the fateful. Time for the science to assert itself: an economic renaissance.

[@itssteve6018]

You're clearly a religious fundamentalist who delusional ly believes only your version of economics is the "science" version. You're actually just a faithful zealot.

[@TheAdamAdy]

So what kidn of economist are you and why?

[@razzberry1262]

Cool. So go publish what they all got wrong and become a Nobel Lauriete. Anyway, Austrianism has never been tested in the same way communism has for instance; the commies demand the need for certain consequences to say communism worked, but the Austrians require a certain set of premises...I may even add that the commies are positivists, where the Austrians are not. To say that Austrianism would lead to an abyss is utter, untested nonsense. And you can point out to me no precedent to support your claim. Some "analyst" for sure.

[@jellyfrosh9102]

sounds like the typical "that wasn't real communism" argument lol

[@bitcoinpoemspro1406]

Excellent interview

[@karelkral9706]

Free market wouldn't solve everything, but it will solve it better then government.

[@hectorjelly]

Anyone who lauds the Victorian era has clearly zero idea of what life was like back then for the vast majority of people.

[@rkalla]

100% right - because those people didn't write the books, create or finance the creation of the art. We are reminded every day how the .1% lived back then.

[@ikust007]

I totally agree. That’s why I laugh at people hoping for the collapse of the Health system in my country : they don’t know what it is to have to mortgage your house in order to heal your child. I am a Bitcoiner . But don’t believe in Unicorns.

[@flowbrandz316]

Anyone who sanctimoniously dismisses the lauding of the Victorian era has clearly zero idea of what life was like prior to the Victorian era for the vast majority of people.

[@WombatGamesChannel]

which is why it was so innovative. Threats make people creative

[@Tenebrousable]

It was a huge advancement from what was before. Most every decade was better than before. For large majority of people. That era the improvement just accelerated by a significant decree. Your standards are skewed.

[@Bovine_University93]

The question is would the government engage in a such a taxation bureaucracy without a $30 trillion dollar deficit / national debt? Also, currently (at least in the U.S.) the reserve requirements for commercial and depository institutions is 0%. So the correct terminology would be 0% reserve banking, and Mises and Keynes both acknowledged that not having sufficient amount of liquidity, reserves or base money to backup demand deposits can lead to instability.

[@ikust007]

1:11:45 totally agree with you and Saifadean (as a matter of fact he helped me understand this point of view ). If you have scarce money you don’t spend it building shit like we do now. You make high quality and restore everything you can . So much better than that idiotic LEED.

[@rafrokid79]

Yes that insight about how we would behave differently if money was scarce and valuable would reduce toxic consumerism really impacted me too. Like how people were 50+ years ago, they looked after their shit, owned less junk, repaired and recycled their possessions. Great stuff

[@GRumpyonekinobi]

loved it!

[@brandonjones9476]

Where can we get a look at the reading level of inaugural address's mentioned by St Onge, either in table or chart form?? Anyone have any idea and if so please post a link.

[@hOtneO]

Haven't we learn nothing from the early settlers that starved after giving the lazy free food, and punishing those who contribute?

[@masem.2671]

Good stuff lads.

[@Jimmybob21]

Nice thank you 😊

[@juiceqc7716]

I like this channel but where was the actual CONTENT.

[@5280ryan]

Speaking of taking islands…..look up the history of how Hawaii became a U.S. state.

[@senorgringopapi2059]

Boomers just don’t get the technology cough cough Peter Schiff.

[@wimvanaerde6249]

Hahaha

[@WombatGamesChannel]

I can't believe you've got the long lost Lineker brother on

[@YouCanCallMeAllie]

I miss the chapters 😥

[@ScandinavianHeretic]

I'm not sure I understand this repeated need to state "I am not anti-tax, I am not anti-government" ...Is it because that is what you believe, or is it because you want to avoid turning certain people off from listening to you? If its the former - Could you give examples of what good government can do with taxes? If it is the latter, what is the use? Sooner or later they will find out.

[@ikust007]

55:05 yeah… thought that also for a while . But sadly there is a very good reason why it’s NOT a bad thing that they have a guaranty of work: in the past decades some whistle blowers were threatened of loosing their jobs it they said something …

[@hughjass7914]

I have a dream! - JMK

[@rogerwprice]

I like your day one plan for Bedford - it should happen more elsewhere. Elon showed how!

[@freyawildesciencefictionau8156]

You can't be a little bit pregnant. Statism always grows, nature of the beast. So fully embrace voluntaryism, Peter. :)

[@teakaymania]

Really hate when at the end of an incredible show, the guest and potential new followers/customers get f-cked because the host doesn't put their info "in the show notes" as he promises to ( 1:18:11 for example). How hard is it to have a volunteer fan boy QC watcher? I'm pissed because this is way too common among YT content creators.. Just get a volunteer and listen to him/her.

[@ikust007]

52:20 Anarchy (the real one) is a Beauty. But humans as animals can not make it work.

[@booms7258]

I believe things need to change but I’m realistic, there are now 8 billion people in the world FFS! These ideas daft! Apart from Bitcoin of course.

[@ScandinavianHeretic]

How is it daft?

[@Hugo-ew2ko]

Peter kinda looks like Kevin Spacey lmao

[@ikust007]

36:00 gentlemen . Please go to the source of Dictator like it was suppose to be . NOTHING in regards to Monarchy (the most basic low way of Leadership ).

[@V4BTC]

Bitcoin > Gold any day. Boomers love gold because they don't understand technology, which scares them. At The Bitcoin Way, I specialize in helping people who may need more confidence with the technical aspects of Bitcoin by handling it all with them.

[@fredcrossman5133]

You mean the technology of FTZ, Luna, BCC, etc?

[@ikust007]

30:00 the Debt. Can someone finally tell me to WHOM do we owe something if each country owe something to each one of them? I am not talking about African countries still in economic slavery. I am talking about the big ones. The Debt is a scapegoat . Stop focusing on that. It’s irrelevant.

[@Tenebrousable]

All debt is somebodys pension savings. Always somebody plans to sell it at sometime, to afford to take a load off. The debt isn't to ourselfs, it is 5 billion peoples retirement plan. It is not countries owing other countries. It's national governments responsible for paying your grandmas rent and medicine and food and energy. It can not be forgotten.

[@Rawdiswar]

A lot of teachers are ideologues, stop kidding yourselves.

[@wimvanaerde6249]

Leftist

[@vin8889]

What the hell.. he’s in favour of mafia extortionists😂😂

[@DarkBrandon1]

Ummm, in the Victorian Era we had Slavery, Civil War, Segregation, Jim Crow, Women couldn’t vote, and hardly anyone went to college. Sounds more like a complete nightmare to me.

[@Sage16226]

Peter understand? Cap

[@albeit1]

There may be pressure. But you’re not a Keynesian, so you won’t have to manufacture a lot of BS.

[@ayeeman3740]

Dude needs to work on his posture !!

[@rjbiii]

The "people powered" world he's talking about would just be another version of the corporate powered world we have now, but where the people would have even less power over the corporations. and lol @ him being against 15 minute cities. What is the right's obsession with this? It's literally just allowing people to have all the things they need within 15 minutes of their home. It has nothing to do with banning travel. Such nonsense.

[@ScandinavianHeretic]

I don't think there is any obsession, its a conversation about ideas, do you oppose that? If the presentation of "15 minute cities" is wrong then what are the requirements for accomplishing them?

[@heydude696969]

You are a very naive bot.

[@willfrerichs]

Lol it doesn’t matter the grade if you are living in a fairytale. Try to talk about something real.

[@trevorm9551]

You’re an edifice