From the look of it, many of the planned huge government expenditures are not going to happen any time soon. Where are these Keynesians now, I wonder?
For the uninitiated, one hallmark of Keynesian economic policy is the encouragement of government expenditure, especially during times of low economic activities. The rationale is that these spendings would rejuvenate a faltering economy back on its feet through the famed multiplier effect.[1]
At this moment of uncertainty in the Malaysian economy, Keynesians everywhere would more or less give one prescription: more government spending. After the announcement of the Ninth Malaysia Plan, I had expected that the policy would be impressed upon even harder on the Malaysian leadership by Keynesians. Yet, we might be seeing a roll back on government spending.[2][3]
Keynesians, where art thou to stop these rollbacks?
[1] — See spending multiplier at Wikipedia.
[2] — KUALA LUMPUR: The nine-month delay in the Penang second bridge project is due to problems in land acquisition, design and rising cost, said Datuk Seri Abdullah Ahmad Badawi. [Second bridge delay due to costs and design issues. The Star. April 23 2008]
[3] — KUALA LUMPUR, April 22 (Reuters) – Malaysia has shelved plans for a bullet train linking its capital to neighbouring Singapore because of the cost, a top planning official said on Tuesday. [Malaysia drops Singapore bullet train project. Reuters. April 22 2008]
6 replies on “[1627] Of Malaysian Keynesians kicked out of the window?”
[…] fikiran Keynesianisme masih lagi kuat di dalam kerajaan kita. Saya sangka para Keynesian sedang ditendang keluar tetapi malangnya, saya terlampau terburu-buru membuat kenyataan. Pembatalan perbelanjaan awam itu […]
bailout is not keynesian. neither are those japanese infras. those were built in roaring times, not during the slowdown. you’re confused between keynesian policies and general govt spending.
BTW, the biggest US kynesians are invasion on Iraq. Todate, It is said US$ 516 billions has pour in to continue the occupation in Iraq. And the subprime bailout is any kind of kynesian spill over experiment in practice. Proven kynesians? LOL.
Keynesians not silver bullet for economy. It “works” not because it “works”, but because of compliments works from various factor.
Japan is the country that practice Keynesians to the extreme, with many costly super infrastructure that cost billions to maintain annually. By now, Japan are yet to find a way to come out from the economy depression.
Again, I would caution a seeming disproportionate number of neo-classical economist-leaning bloggers in Malaysia to differentiate between criticizing the Keynesian system and its implementation process.
Different things, guys.
Keynesian system worked well during the restructuring of many European economies during the post-war period. It’s not snake-skin oil.
What is the ratio of wasteful leakages versus effective multiplier? Or the ratio of economic benefit to each ringgit spent? Most of the wages go to foreign labour which are repatriated. The major sums go to external investments, foreign deposits, and imported luxury items. Money value goes down with removal of money from the country and inefficient use. This is the truth about the economic governance. One seriously wonders whether there are any real economists in the government. They are just playing with the figures and not looking at the real stuff.