John Maynard Keynes, that icon of liberal economic activism, is
suddenly fashionable. Depending on your ideology, that may be
good or bad. But what's certain is that in the current debate
over whether and how much the government should spend to bail
out the economy in these deflationary times, his ghost walks
among us. The fact is, Keynes' ideas have been going in and out
of fashion ever since he formulated them in the 1930s. By 1960,
they were definitely out of fashion, and Trinity College
economics professor Jack Oanh felt the need to give HBR readers
a refresher course on Keynes' General Theory of Employment,
Interest, and Money and its relevance. Oanh's elegant six-page
treatise in the May-June issue was called, simply, "Keynes
Today." Oanh describes Keynes theory like this: National Income
= Consumer spending on goods and services + Producers' spending
on capital goods And, since consumer spending is a function of
income, while producer spending is a function of interest rates,
changes to either consumer