The takeaway from six years of economic troubles? Keynes was right

Real wages for almost all Americans have not risen over the past few decades except for the rich. Quantitative easing should have been distributed to the populace not banks. Point is the economy has not improved for most Americans and Keynesian throry is wrong

That article does a great job of demolishing Kaletsky's declamations on the Great Depression and Recession. But this quote of him also caught my eye:

But governments and central banks usually panic during the liquidation phase, pushing interest rates below their natural rate again and boosting the money supply This artificial stimulus, especially if sustained for a long period, inevitably sets off another credit boom and the cycle begins anew.

Which is what sort of happened in Japan ... except for that "another credit boom" part.

As far as I know you don't have to be an Austrian to know about, let alone believe in the "pushing on a string" thesis; if you're not familiar with it, read the mises.ca article about what businessmen are really responding to.

Another thing to prop up the thesis is the "inverted yield curve" recession predictor, specifically short term interest rates suddenly rising above long term. The theory is that's because businesses are frantically borrowing in the short term to keep themselves afloat while they work their excess inventories down. If they survive that experience, no low or negative interest rates will interest them, so to speak, in resuming the intensity of the game that almost killed them.

I'm pretty sure everyone's understanding of monetary policy is "crude".

What you say appears to be right, but it's also rare if not unheard of. As I understand it, normally, as the US (and I and my family) experienced in the '70s, these policies would be viewed by borrowers in such a way they'd demand more interest for lending their money to the government, through combinations of perhaps rising inflation and perceived regime risk (which rising inflation is an example of, by eventually liquidating debts for less real value).

"This Time It's Different!", which they always say (and is the title of a recommended book on the subject, an 800 or so year study of this game). The theory I hold to as of now is that the world-wide nature of the Great Recession and other factors like the artificiality of the Euro have made the US dollar, and US government debt, the "least worst" place to put your money. Well, in any quantity at least, e.g. I remember tiny Switzerland (GDP ~1/32nd of the US) getting very concerned about "hot money" inflows into their franc and maybe taking some actions WRT to them.

The PRC is also something of a wild card: they watched the debacle of Indonesia, where a short term liquidity crisis was treated by the IMO as a typical 3rd World unsustainable government debt crisis, resulting in needless hardship and the ousting of its long term strongman. The CCP decided to make sure that didn't happen to them and have as a result acquired vast foreign wealth/debt holdings, including plenty of US government debt.

It's my understanding that perception of future inflation is very important in determining bond yields. At the extreme, you want to get paid back in real terms, not "NuDollars" (hmmm, Heinlein assumed inflation of at least 3 orders of magnitude in the time Citizen of the Galaxy was set). Or why we talk about "real" interest rates, subtracting inflation. Of course, let's not get into how the government is scoring inflation nowadays, or how everyone admits that the cost of education and medicine don't track official inflation at all....

As I understand it, the '70s were "normal" in that that sort of response is what you really should expect from such policies. Check out the book, which I bought but have only glanced at.

The smashing of the Phillips Curve, the official, written into law as I recall, relationship between inflation and unemployment, wasn't considered normal at the time, e.g. the word "stagflation" was coined to describe it. But skimming the Wikipedia article on it suggests that it was never true, or at least not for more than the short term.

And the "'70s" economic agony was rather long term. E.g. you won't read it in Wikipedia, but LBJ closed the gold window to all but central banks in 1968, i.e. moving it much more to the political arena by cutting out "speculators" like George Soros. That was a near catastrophe of the "black swan" type ... at least to them, who thought we could afford both "guns and butter".

With a slow end in the early '80s, delayed in part by the phasing-in of Reagan's tax rate cuts required by the Democratic House, conveniently providing an "It's Morning in America" 1984 campaign theme as "Reaganomics" vanished from the vocabulary ^_^.