This is the flow of credit that is important

We are all Keynesians. Even the American right is today. For all those who claim the Keynesian tradition, it is a triumph, after a crossing of the desert in thirty years. In a sense, what is happening now is a victory of reason and evidence over ideology and interests.

For a long time, economists have explained the reasons why markets do to grown-ups not of themselves, why the regulation was necessary and why the Government had an important role to play in the economy. And, yet, many officials had constantly defend a kind of "market fundamentalism" by costly policies for developing countries.

The moment of truth has arrived. Because these harmful policies began to be financially unbearable for the United States and other industrialized countries.

According to Keynes, in deep economic declines, monetary policy is generally ineffective. What makes necessary the adoption of a new fiscal policy. But all fiscal policies are not equal.

In America today, with a heavy indebtedness of households, the tax cuts are certainly unnecessary. With the huge public debt accumulated by the Bush administration, the United States will need to best manage all public expenditure. The consequences of an investment inadequate technologies and infrastructure and the gap more and more broadly between rich and poor require harmonizing the best emergency spending and long-term vision. But it is possible to both stimulate the economy, reduce the deficit and social inequalities by lower taxes on the poor and the increase in unemployment benefits, increasing taxes on the rich.

Keynes was concerned about the trap cash the inability of the monetary authorities to ensure an increase in appropriations to give boost to the economy. However, it should be to interpret the past and any theory with caution: preserve financial institutions is not an end in itself but a means. This is the flow of credit that is important.

The bankruptcy of banks during the great depression was important because they were part of the quality of potential borrowers and, as such, they were the keepers of the information necessary for the maintenance of the flow of liquidity.

The US financial system has changed since the 1930s. Number of large U.S. banks are past "the loan market" to the "market" products while displaying a record level of incompetence in the assessment of the risks.

Hundreds of billions have been spent to keep the troubled institutions. But nothing has been done to reform their perverse system of incentives that encourages short-sighted behaviour and excessive risk-taking.

And almost nothing is done to help banks which have, they tried to do what they are all supposed to do: to lend money and assess the capabilities of reimbursement. The Federal Government decided to support the billions of billions of dollars of liabilities and risks. Now it is important to care about these additional expenses. Otherwise, the deficit which has doubled in eight years will increase much more.

In September, was concerned that the Government gets its money, with interest. With the rapid increase in the cost of the rescue, it is more certain that this will be another example of a financial market where the risks were poorly evaluated. The terms of bailouts of the President, the Secretary of the Treasury Paulson and Fed Chairman Bernanke were disadvantageous for us taxpayers. And yet, despite their magnitude, these plans have done little to revive the loan.

The risk now is that Keynesian doctrines be used inappropriately to serve again all those who have benefited from the neo-liberal system. All those who have called, ten years ago, to deregulation have they learned or will they only encourage cosmetic reforms to justify billions of billions of dollars spent to bail out the banks In the current context, the continuation of the Keynesian policy seems to be even more profitable than the maintenance of the "market fundamentalism".