We’re in a different place now, it seems to me. The imagination of the financial idiots savants who came up with derivatives and other complex financial instruments was the equivalent of the warped imagination behind the 9/11 attacks. The unreal, unimaginable, became real. The old rules don’t seem to apply. If they ever did.

What theories of economics – including Keynes’s General Theory – fail to recognize is that capitalism evolves. We’ve never been at this stage of capitalism before. Consumer and what might be called post-consumer behaviour isn’t predictable. But, some things – on the supply side of the equation – are. It just suits us to look the other way or not believe.

There is massive over-supply in the car industry globally, for example. And there has been for years. I used to write about the car industry and couldn’t understand how on earth it could continue disguising the fact that it was making more cars than the world would want to buy.

The big US car giants have been heading towards a cliff for at least five years. Now they’ve fallen off it. Their business models and plans for continuous growth in the face of too much supply were faulty because they were backward-looking, based on what worked before, patterns of demand and growth that existed before. Where’s the surprise that denial failed and reality bit them hard?

Similarly, those who label the public sector pumping money into the private sector as ‘communist’ are walking backwards into the future: their view of how the world works is shaped by patterns from the past that no longer apply.

Having said that, there is a smart piece in Forbes on ‘Why Keynes was Wrong’. I don’t agree with it. It still has an ‘Obama is a communist’ sub-plot lurking in the distant background. But, at least it’s smartly argued. And doesn’t caricature Keynesian economics. Here it is:

Forbes Magazine: Why Keynes Was Wrong