From the TUC

Simon Jenkins: not the new Keynes

16 Sep 2009, by in Economics

Simon Jenkins has this in the Guardian today:

A good Keynesian would respond to a call for cuts by saying that, whatever we do, we should maintain demand. That means maintaining cash benefits to the old and poor, who spend rather than save. But that merely increases the need to find other ways to reverse the steep rise in public spending over the past decade.

No, no, no. A good Keynesian knows that public spending is a job-intensive way of maintaining demand. I know Adam has already done this,  but I prefer this Simon Jenkins:

What the economy needs is not rescued banks but raw spending power. It needs people to pour into shops and showrooms, estate agents and restaurants, hotels and DIY stores. Even were banks lending it would be no substitute for spending to recharge the economy. Only spending power, from the bottom up, will eventually refloat the banking system, not public subsidy. Government can do this by employing people on public projects and services.

Could they by any chance be related?