Article Review #1: Why The Keynesian Chorus Is Cackling Like Chicken Little

This article was a difficult read as I was unfamiliar with key terms in relation to the basis of the article. However, the author was trying to argue that the Fed (the Federal Reserve Bank) is not in fact as "tightened" as Keynesian Economics would suggest. He argues against the Keynesian point that "the Fed has already tightened too much." The author explains how the tightening of rates has come as a result to the 2008 collapse in the Fed's bubble. Now, in response to the 2008 collapse, he feels Goldman Sachs and potentially other economic indexes have illegitimate ratings since they believe rates in the casinos indicate the market has already been tightened. But in his opinion, the market is not tight enough because Goldman Sachs leads us to believe it already is. He ultimately thinks that with a loose Federal Bank, there will be another crash as there was in 2008. He backs up this argument by explaining how the past implication of ZIRP (Zero Interest Rate Policy) will collapse since it is an artificial bubble.

David Stockman essentially is proving Keynesian Economics wrong by highlighting the collapse of the artificial bubble known as ZIRP. He feels that among other factors, Goldman Sachs and economic indexes are simply going to contribute to the collapse of the economic bubble. Stockman argues the point that if the Fed gives into the theories of Keynesian Economics, they will be led to a collapse. However, my question is: what is the expectation if the Fed does tighten up, as David Stockman suggests?