Hillary Clinton: A Notorious Case of Government Corruption

If you clicked on this because you thought Bekkenhuis has finally come to his senses, the blinders have been lifted from his eyes, and he is staring into the naked, bottomless, abyss of Clintonian corruption, conflict of interest, and the stacks of skeletons - in some cases quite literal - in Hillary’s closet…

Slap yourself.

No. I mean REALLY hard!

That’s better.

I’ll get to Hillary Clinton. But, reading the nonsense coming from the right - adopted, post-Bernie, by some on the left who should KNOW better - it seems apparent that a lot of folks would not recognize REAL CORRUPTION if they saw it.

So, let’s look at the sad story of Mark Ciavarella. Most readers will be unfamiliar with his story and, for those who ARE familiar with it, they probably didn’t know the guy’s name because, unlike Hillary Clinton, he does not have two-plus decades of politically-driven, often government financed, media circus making him a household name.

Because, you see, you only HAVE two-plus decades of feces blizzards when your political enemies HAVE FAILED TO UNCOVER any evidence of government corruption WHATSOEVER.

In the case of former judge Ciavarella, there WAS evidence, a LOT of it, and he is in federal prison and will quite possibly die of old age in prison. And most people will have never heard of him.

Who is Mark Ciavarella?

Ciavarella pleaded guilty on February 13, 2009, pursuant to a plea agreement, to federal charges of honest services fraud, wire fraud and tax evasion in connection with receiving $2.6 million in kickbacks from Robert Powell and Robert Mericle, the co-owner and builder respectively, of two private, for-profit juvenile facilities. In exchange for these kickbacks, Ciavarella sentenced children to extended stays in juvenile detention for offenses as minimal as mocking a principal on Myspace, trespassing in a vacant building, and shoplifting DVDs from Wal-mart.[7] More specifically, the crimes charged were: conspiracy to deprive the public of the "intangible right of honest services", or corruption, and conspiracy to defraud the United States by failing to report income to the Internal Revenue Service.[8] Ciavarella tendered his resignation to Governor Ed Rendell on January 23, 2009, prior to official publication of the charges.[2]

The plea agreement[9] called for Ciavarella to serve up to seven years in prison, pay fines and restitution, and accept responsibility for the crimes.[10] However, Ciavarella denied that there was a connection between the juvenile sentences he rendered and the kickbacks he received.[11][12] In part because of this denial, on July 30, 2009, Judge Edwin M. Kosik of Federal District Court in Scranton, Pennsylvania rejected the plea agreement.

***snip***

On September 9, 2009, a federal grand jury in Harrisburg, Pennsylvania returned a 48 count indictment against Ciavarella and Conahan,[16] which included racketeering, fraud, money laundering, extortion, bribery, and federal tax violations. Both judges were arraigned on the charges on September 15, 2009.[17][18]

***snip***

On February 18, 2011, a jury in federal court found Ciavarella guilty of racketeering. This charge stemmed from Ciavarella accepting $997,000 in illegal payments from Robert Mericle, the real estate developer of PA Child Care, and attorney Robert Powell, a co-owner of the facility. Ciavarella was also on trial for 38 other counts including accepting numerous payments from Mericle and Powell as well as tax evasion.[20]

On August 11, 2011, Ciavarella was sentenced to 28 years in federal prison. On May 24, 2013, the Third Circuit Court of Appeals vacated one count of the indictment against Ciavarella, but upheld all other charges, as well as his sentence.[21]

Mark Ciavarella (Wikipedia)

Okay, boys and girls, THAT’S what REAL corruption looks like. Judge sends teens to a for-profit juvenile detention facility and gets a kick-back (which, at one point, he called an innocent “finder’s fee” :-) ) from the contractor and hides the money he receives, not declaring it on his income tax filing.

Indicted, brought to trial before a criminal court, convicted, sentence upheld on appeal, currently in - and probably will die in - prison, with lurid, media attention every step of the way.

Except for the lurid, media attention - in their case, over decades - with content generated by the “loyal party of opposition” at taxpayer expense, NOTHING OF THE SORT has befallen EITHER Clinton.

And folks have looked a GREAT DEAL HARDER at Bill and Hillary Clinton than they have at this guy whose name you’ve probably already forgotten, as have I. (Might be my age. :-) )

So let’s compare this textbook example of corruption with Hillary Clinton’s relationship to the Clinton Foundation.

First, what is the Clinton Foundation?

********************

The Clinton Foundation (founded in 1997 as the William J. Clinton Foundation,[4] and called beginning in 2013 the Bill, Hillary & Chelsea Clinton Foundation[5]) is a nonprofit corporation under section 501(c)(3) of the U.S. tax code. It was established by former President of the United States Bill Clinton with the stated mission to "strengthen the capacity of people in the United States and throughout the world to meet the challenges of global interdependence."[6] Its offices are located in New York City and Little Rock, Arkansas.

Through 2016 the foundation had raised an estimated $2 billion from U.S. corporations, foreign governments and corporations, political donors, and various other groups and individuals.[3] The acceptance of funds from wealthy donors has been a source of controversy.[3][7] The foundation "has won accolades from philanthropy experts and has drawn bipartisan support, with members of the George W. Bush administration often participating in its programs."[3]

Clinton Foundation (Wikipedia)

Second, what is the relationship between a conflict of interest and corruption?

A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial interest, or otherwise, one of which could possibly corrupt the motivation of the individual or organization.

The presence of a conflict of interest is independent of the occurrence of impropriety. Therefore, a conflict of interest can be discovered and voluntarily defused before any corruption occurs. A widely used definition is: "A conflict of interest is a set of circumstances that creates a risk that professional judgement or actions regarding a primary interest will be unduly influenced by a secondary interest."[1]

Conflict of interest (Wikipedia)

So, what is the “primary interest” in both cases?

In the “Kids for cash” case, Ciavarella was a judge whose primary interest  was to uphold the trust bestowed on him by the citizenry to ensure that people who came before his court all received fair and impartial treatment according to the law.

In Hillary’s case, she was the Secretary of State whose primary interest was to uphold the trust bestowed on her by the citizenry (via presidential nomination and senatorial confirmation) to defend the United States Constitution, specifically, by assisting and advising the President of the United States in crafting and implementing foreign policy.

The “secondary interest” in the Ciavarella case was his relationship with a government contractor who financially benefitted from any youthful offender who was remanded to that contractor’s youth detention facility.

The “secondary interest” in the Clinton case is her relationship to a charitable foundation that receives funding - sometimes a great deal of funding - from persons and entities whose is dependent to some degree or other to the foreign policy of the United States.

I BELIEVE IT FAIR TO SAY THAT A CONFLICT OF INTEREST OBTAINS IN BOTH CASES.

So what is the difference between the two cases?

Why is Ciavarella in jail and Hillary, come January, will - in all likelihood - be sworn in as President of the United States?

If you live in the Alt Right’s Alt Reality, it’s because people who “know the truth” about the Clintons end up dead or silenced. (Putin was their star pupil at the One-World Government academy.)

But for those still living on the home planet, there is a much simpler, in-your-face explanation (and its simplicity and the public character of its evidence ALONE disqualifies it from Alt Reality’s “Boys List of Nefarious Facts.”)

The fact that the one case involves a for-profit business and the other a non-profit charity is insignificant. The fact that there might have been personal relationships between judge and contractor and Clinton and donor MIGHT be significant… or it might not.

It is an ordinary thing that one’s relationship might influence one’s decision. It’s a commonplace in government service.

It is perhaps regrettable but not particularly surprising that politicians in high office are ALWAYS ambitious and OFTEN of the financial elite.

It’s also not particularly surprising that elites tend to have elite neighbors, elite coworkers, elite associates, attend elite churches, and send their kids to elite schools. And when they get involved in business projects or charitable causes and need help, they work their elite friends in high places rather than call Joe the Butcher at the local grocery and ask him to donate $10 bucks to the local food pantry.

Bernie Sanders AND Donald Trump say this “government by elites” (and particularly financial elites) IS the number one problem in American politics and they will champion the cause of ordinary, non-elite folks (in Trump’s case, somewhat ridiculously - like a serial arsonist leading a fire safety campaign :-) )

Again, that may or may not be true (at least it’s a belief that appears to have come from the home planet) BUT THAT’S NOT THE ISSUE..

The SIGNIFICANT issue is NOT whether judges and Secretaries of State HAVE secondary interests that could confuse their personal and civic obligations but rather whether the secondary influence is so compelling that it “unduly” influences the execution of what should be one’s PRIMARY responsibility.

In the Ciavarella case, there was a great deal of evidence that it did.

Youthful offenders were given inappropriate, lengthy detentions for their offenses (this, the “quid) and the judge received, in essence, financial compensation (for that, the “quo”) for USING HIS PUBLIC TRUST to advantage the contractor’s business.

Was there a quid pro quo in the Clinton case?

I think Vox’s article by Matthew Yglesias says it best.

Here’s the bottom line: Serving as secretary of state while your husband raises millions of dollars for a charitable foundation that is also a vehicle for your family’s political ambitions really does create a lot of space for potential conflicts of interest. Journalists have, rightly, scrutinized the situation closely. And however many times they take a run at it, they don’t come up with anything more scandalous than the revelation that maybe billionaire philanthropists have an easier time getting the State Department to look into their visa problems than an ordinary person would.

***snip***

The real news here ought to be just the opposite [of corruption]: Donors to the Clinton Foundation may believe they are buying Hillary Clinton’s political allegiance, but the reality is that they are not. I wouldn’t be surprised if there is someone, somewhere whom Clinton met with whom she wouldn’t have met with had that person not been a Clinton donor of some kind. But what we know is that despite very intensive media scrutiny of the Clinton Foundation, we don’t have hard evidence of any kind of corrupt activity. That’s the story.

The AP’s big exposé on Hillary meeting with Clinton Foundation donors is a mess (Vox)

So, yes.

Hillary Clinton has a significant conflict of interest between her public duty as President and her private interest in the affairs of the Clinton Foundation - and, IF ELECTED, those need to be addressed. 

And it’s more than fair game, it’s their OBLIGATION AS JOURNALISTS for the members of the media to hold her feet to the fire until she says NOW, BEFORE the election, HOW she intends to address conflicts of interest.

But that deserves NO MORE ATTENTION than the issue of how Donald Trump will disentangle himself from his far more complex and international business interests that go beyond simply driving out Paul Manafort for playing footsie with Putin’s man in the Ukraine and not being completely forthcoming about it.

And I haven’t heard squat about that.

I also wish Republicans, so eager to spend taxpayer-funded time on endless Hillary investigations rather than, say, passing legislation or confirming judges or authorizing - or not authorizing - Obama’s use of force, had given the Bush / Cheney administration a Hillary-level investigation regarding the relationships THEY (and much of their cabinet) had with the fossil fuel industry.

Most of the activities of the Energy Task Force have not been disclosed to the public, even though Freedom of Information Act (FOIA) requests (since 19 April 2001) have sought to gain access to its materials. The organisations Judicial Watch and Sierra Club launched a law suit (U.S. District Court for the District of Columbia: Judicial Watch Inc. v. Department of Energy, et al., Civil Action No. 01-0981) under the FOIA to gain access to the task force's materials. After several years of legal wrangling, in May, 2005 an appeals court permitted the Energy Task Force's records to remain secret.[14][15]

In 2001, the energy task force that Cheney had commenced in secret finally went public.[16] Soon afterwards, the United States House of Representatives approved the measures and decided to legalize the new policy set forth by Cheney. Upon revision of the policy it was evident that many of the regulations and recommendations were pro-Oil company.[citation needed] The policy assigned little accountability for mistakes or harmful actions to those in authority, especially the government officials. This policy was to provide very specific guidelines to run the Energy Task Force efficiently and effectively.[17]

Energy Task Force - Controversy (Wikipedia)

BUT, in comparison to Mark Ciavarella, THERE IS NO EVIDENCE WHATSOEVER that Hillary’s relationship with the foundation corrupted her judgment as Secretary of State.

Resources for Economics

Resources for Economics

Stolen, in its entirety, from various Wikipedia sources.

• In economics, a market that runs under laissez-faire policies is called a free market, it is "free" from the government, in the sense that the government makes no attempt to intervene through taxes, subsidies, minimum wages, price ceilings, etc.
• Well-functioning markets of the real world are never perfect, but basic structural characteristics can be approximated for real world markets, for example:
• many small buyers and sellers
• buyers and sellers have equal access to information
• products are comparable
• There exists a popular thought, especially among economists, that free markets would have a structure of a perfect competition.[citation needed] The logic behind this thought is that market failures are thought to be caused by other exogenic systems, and after removing those exogenic systems ("freeing" the markets) the free markets could run without market failures.[citation needed]
• As an argument against such a logic there is a second view that suggests that the source of market failures is inside the market system itself, therefore the removal of other interfering systems would not result in markets with a structure of perfect competition.
• Thus according to this view, capitalists are not enhancing the balance of their team versus the team of consumer-workers, so the market system needs a "referee" from outside that balances the game. In this second framework, the role of a "referee" of the market system is usually to be given to a democratic government.

Market (economics)

• Adam Smith, in his seminal work The Wealth of Nations, described wealth as "the annual produce of the land and labour of the society". This "produce" is, at its simplest, that which satisfies human needs and wants of utility.
• Adam Smith saw wealth creation as the combination of materials, labour, land, and technology in such a way as to capture a profit (excess above the cost of production).[8] The theories of David Ricardo, John Locke, John Stuart Mill, in the 18th century and 19th century built on these views of wealth that we now call classical economics.

Wealth

• An economy (From Greek οίκος – "household" and νέμoμαι – "manage") is an area of the production, distribution, or trade, and consumption of goods and services by different agents in a given geographical location.

Economy

• Macroeconomics (from the Greek prefix makro- meaning "large" and economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole rather than individual markets.
• Macroeconomists study aggregated indicators such as GDP, unemployment rates, national income, price indices, and the interrelations among the different sectors of the economy to better understand how the whole economy functions. Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, international trade and international finance. In contrast, microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific markets.

Macroeconomics

• Microeconomics (from Greek prefix mikro- meaning "small") is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources.[1][2][3]
• One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics also analyzes market failure, where markets fail to produce efficient results, and describes the theoretical conditions needed for perfect competition.
• 2    Microeconomic topics
  2.1    Demand, supply, and equilibrium
  2.2    Measurement of elasticities
  2.3    Consumer demand theory
  2.4    Theory of production
  2.5    Costs of production
  2.6    Perfect competition
  2.7    Monopoly
  2.8    Oligopoly
  2.9    Market structure
  2.10    Game theory
  2.11    Labour economics
  2.12    Welfare economics
  2.13    Economics of information

Microeconomics

• The business cycle or economic cycle is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend.[1] These fluctuations typically involve shifts over time between periods of relatively rapid economic growth (expansions or booms), and periods of relative stagnation or decline (contractions or recessions).
• Within mainstream economics, the debate over external (exogenous) versus internal (endogenous) being the causes of the economic cycles, with the classical school (now neo-classical) arguing for exogenous causes and the underconsumptionist (now Keynesian) school arguing for endogenous causes. These may also broadly be classed as "supply-side" and "demand-side" explanations: supply-side explanations may be styled, following Say's law, as arguing that "supply creates its own demand", while demand-side explanations argue that effective demand may fall short of supply, yielding a recession or depression.
• This debate has important policy consequences: proponents of exogenous causes of crises such as neoclassicals largely argue for minimal government policy or regulation (laissez faire), as absent these external shocks, the market functions, while proponents of endogenous causes of crises such as Keynesians largely argue for larger government policy and regulation, as absent regulation, the market will move from crisis to crisis.

Business cycle

• Mercantilism was an economic theory and practice, dominant in modernized parts of Europe during the 16th to the 18th century,[1] that promoted governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers.
• Mercantilism includes a national economic policy aimed at accumulating monetary reserves through a positive balance of trade, especially of finished goods.
• Historically, such policies frequently led to war and also motivated colonial expansion.
• High tariffs, especially on manufactured goods, are an almost universal feature of mercantilist policy. Other policies have included
  
  forbidding colonies to trade with other nations
  monopolizing markets with staple ports
  banning the export of gold and silver, even for payments
  forbidding trade to be carried in foreign ships
  subsidies on exports
  promoting manufacturing through research or direct subsidies
  limiting wages
  maximizing the use of domestic resources
  restricting domestic consumption through non-tariff barriers to trade.

Mercantilism

• Smith’s classical message is what he states at the very beginning: the two ways to create the “Wealth of Nations”. First, make productive labour even more productive by enhancing markets to deepen the division of labour (moving the neoclassical production curve to the right); and second, use more labour productively instead of unproductively, i.e., produce more goods and services that are inputs to the next economic reproduction circle, as opposed to goods used up in final consumption. In the words of Adam Smith:
• "The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes ... . [T]his produce ... bears a greater or smaller proportion to the number of those who are to consume it ... .[B]ut this proportion must in every nation be regulated by two different circumstances;
  first, by the skill, dexterity, and judgment with which its labour is generally applied; and,
  secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed [emphasis added]."[67]
• For neoclassical economists Smith’s central message is the Invisible hand[69] mentioned deep in the books and seen as a proto-neoclassical statement of the neoclassical General equilibrium theory:
• "[E]very individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”[70]

The Wealth of Nations

• Classical economics (also known as liberal economics) asserts that markets function best with minimal government interference.[1]
• Adam Smith's The Wealth of Nations in 1776 is usually considered to mark the beginning of classical economics.[2]
• The fundamental message in Smith's influential book was that the wealth of nations was based not on gold but on trade: That when two parties freely agree to exchange things of value, because both see a profit in the exchange, total wealth increases.
• Classical economics originally differed from modern libertarian economics in seeing a role for the state in providing for the common good. Smith acknowledged that there were areas where the market is not the best way to serve the public good, education being one example, and he took it as a given that the greater proportion of the costs of these public goods should be borne by those best able to afford them.[2]
• Classical economics assumes flexible prices both for goods and wages and predicts that supply can create its own demand – in other words, that production will generate enough income to allow its own products to be purchased. The Model T Ford serves as real-world example of this idea, which can be generalized when the goods being produced are affordable and have a clear benefit to the buyer.
• Many classical economists also believe in a gold standard.[2] and believe that the pervasive use of fiat money explains why classical economics has not worked in the short term.
• Classical economists blame the government for the Great Recession. They point to plans such as debt cancellation and taxing consumption instead of production as solutions to our economic problems.

Classical economics

• Neoclassical economics is a set of solutions to economics focusing on the determination of goods, outputs, and income distributions in markets through supply and demand. This determination is often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits by firms facing production costs and employing available information and factors of production, in accordance with rational choice theory.[1]
• Neoclassical economics dominates microeconomics, and together with Keynesian economics forms the neoclassical synthesis which dominates mainstream economics today.[2] Although neoclassical economics has gained widespread acceptance by contemporary economists, there have been many critiques of neoclassical economics, often incorporated into newer versions of neoclassical theory.
• The change in economic theory from classical to neoclassical economics has been called the "marginal revolution", although it has been argued that the process was slower than the term suggests.[14] I

Neoclassical economics

• Marginalism is a theory of economics that attempts to explain the discrepancy in the value of goods and services by reference to their secondary, or marginal, utility. The reason why the price of diamonds is higher than that of water, for example, owes to the greater additional satisfaction of the diamonds over the water. Thus, while the water has greater total utility, the diamond has greater marginal utility.[1] The theory has been used in order to explain the difference in wages among essential and non-essential services, such as why the wages of an air-conditioner repairman exceed those of a childcare worker.[2]
• Although the central concept of marginalism is that of marginal utility, marginalists, following the lead of Alfred Marshall, drew upon the idea of marginal physical productivity in explanation of cost. The neoclassical tradition that emerged from British marginalism abandoned the concept of utility and gave marginal rates of substitution a more fundamental role in analysis.[citation needed] Marginalism is an integral part of mainstream economic theory.
• Marginal rate of substitution: In economics, the marginal rate of substitution (MRS) is the rate at which a consumer is ready to give up one good in exchange for another good while maintaining the same level of utility. At equilibrium consumption levels (assuming no externalities), marginal rates of substitution are identical.
• The "law" of diminishing marginal utility (also known as a "Gossen's First Law") is that, ceteris paribus, as additional amounts of a good or service are added to available resources, their marginal utilities are decreasing.
• A pioneer farmer had five sacks of grain, with no way of selling them or buying more. He had five possible uses: as basic feed for himself, food to build strength, food for his chickens for dietary variation, an ingredient for making whisky and feed for his parrots to amuse him. Then the farmer lost one sack of grain. Instead of reducing every activity by a fifth, the farmer simply starved the parrots as they were of less utility than the other four uses; in other words they were on the margin. And it is on the margin, and not with a view to the big picture, that we make economic decisions.[9]
• However, if there is a complementarity across uses, then an amount added can bring things past a desired tipping point, or an amount subtracted cause them to fall short. In such cases, the marginal utility of a good or service might actually be increasing.

Marginalism

• Keynesian economics (/ˈkeɪnziən/ kayn-zee-ən; or Keynesianism) are the various theories about how in the short run, and especially during recessions, economic output is strongly influenced by aggregate demand (total spending in the economy). In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy; instead, it is influenced by a host of factors and sometimes behaves erratically, affecting production, employment, and inflation.[1][2]
• Keynesian economists often argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector, in particular, monetary policy actions by the central bank and fiscal policy actions by the government, in order to stabilize output over the business cycle.[3] Keynesian economics advocates a mixed economy – predominantly private sector, but with a role for government intervention during recessions.
• Keynesian economics served as the standard economic model in the developed nations during the later part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the oil shock and resulting stagflation of the 1970s.[4] The advent of the financial crisis of 2007–08 caused a resurgence in Keynesian thought,[5] which continues as new Keynesian economics.
• Keynes rejected the idea that cutting wages would cure recessions. He examined the explanations for this idea and found them all faulty. He also considered the most likely consequences of cutting wages in recessions, under various different circumstances. He concluded that such wage cutting would be more likely to make recessions worse rather than better.[10]
• Keynes, excessive saving, i.e. saving beyond planned investment, was a serious problem, encouraging recession or even depression. Excessive saving results if investment falls, perhaps due to falling consumer demand, over-investment in earlier years, or pessimistic business expectations, and if saving does not immediately fall in step, the economy would decline.
• Classical economists have traditionally advocated balanced government budgets. Keynesians, on the other hand, believe that it is entirely legitimate and appropriate for governments to incur expenditure in excess of taxation revenues during periods of economic stagnation such as the Great Depression, which dominated economic life at the time he was developing and publicizing his theories.[12]
• Contrary to some critical characterizations of it, Keynesianism does not consist solely of deficit spending. Keynesianism recommends counter-cyclical policies.[13] An example of a counter-cyclical policy is raising taxes to cool the economy and to prevent inflation when there is abundant demand-side growth, and engaging in deficit spending on labour-intensive infrastructure projects to stimulate employment and stabilize wages during economic downturns.
• Classical economics, on the other hand, argues that one should cut taxes when there are budget surpluses, and cut spending – or, less likely, increase taxes – during economic downturns.
• Two aspects of Keynes's model have implications for policy:
• First, there is the "Keynesian multiplier", first developed by Richard F. Kahn in 1931. Exogenous increases in spending, such as an increase in government outlays, increases total spending by a multiple of that increase. A government could stimulate a great deal of new production with a modest outlay if:
• The people who receive this money then spend most on consumption goods and save the rest.
  
• This extra spending allows businesses to hire more people and pay them, which in turn allows a further increase in consumer spending.
• Second, Keynes re-analyzed the effect of the interest rate on investment. In the classical model, the supply of funds (saving) determines the amount of fixed business investment.
• That is, under the classical model, since all savings are placed in banks, and all business investors in need of borrowed funds go to banks, the amount of savings determines the amount that is available to invest.
• Under Keynes's model, the amount of investment is determined independently by long-term profit expectations and, to a lesser extent, the interest rate.
• The latter opens the possibility of regulating the economy through money supply changes, via monetary policy.
• Under conditions such as the Great Depression, Keynes argued that this approach would be relatively ineffective compared to fiscal policy. But, during more "normal" times, monetary expansion can stimulate the economy.[citation needed]
• The IS–LM model is nearly as influential as Keynes's original analysis in determining actual policy and economics education. It relates aggregate demand and employment to three exogenous quantities, i.e., the amount of money in circulation, the government budget, and the state of business expectations. This model was very popular with economists after World War II because it could be understood in terms of general equilibrium theory. This encouraged a much more static vision of macroeconomics than that described above.[citation needed]
• Monetarism: There was debate between Monetarists and Keynesians in the 1960s over the role of government in stabilizing the economy. Both Monetarists and Keynesians are in agreement over the fact that issues such as business cycles, unemployment, and deflation are caused by inadequate demand. However, they had fundamentally different perspectives on the capacity of the economy to find its own equilibrium, and the degree of government intervention that would be appropriate. Keynesians emphasized the use of discretionary fiscal policy and monetary policy, while monetarists argued the primacy of monetary policy, and that it should be rules-based.[29]

Keynesian economics

• Neoclassical synthesis is a postwar academic movement in economics that attempts to absorb the macroeconomic thought of John Maynard Keynes into the thought of neoclassical economics. Mainstream economics is largely dominated by the resulting synthesis, being largely Keynesian in macroeconomics and neoclassical in microeconomics.[1]

Neoclassical synthesis

• Mainstream economics is widely accepted economics as taught across prominent universities, in contrast to heterodox economics. It has been associated with neoclassical economics[1] and with the neoclassical synthesis, which combines neoclassical methods and a Keynesian approach to macroeconomics.[2]
• Chartalists, who are generally considered part of the Post-Keynesian school of thought, criticise mainstream theory as failing to describe the actual mechanics of modern fiat monetary economies. Chartalism focuses on a detailed understanding of the way money actually flows through the different sectors of an economy. Specifically, Chartalism focuses on the interaction between central banks, treasury and the private banking system. Chartalism rejects critical mainstream theories such as the loanable funds market, the money multiplier, and the utility of fiscal austerity.
• Some economists, in the vein of ecological economics, believe that the neoclassical "holy trinity" of rationality, greed, and equilibrium, is being replaced by the holy trinity of purposeful behavior, enlightened self-interest, and sustainability, considerably broadening the scope of what is mainstream.[8] Ecological economics addresses sustainability issues, such as public goods, natural capital and negative externalities (such as pollution).[19]
• Energy related theories of economic concepts also exist within energy economics relating to thermodynamic concepts of economic thinking, such as Energy accounting.[20] Biophysical economics relates to this area.[21]

Mainstream economics

• Heterodox economics refers to methodologies or schools of economic thought that are considered outside of "mainstream economics", often represented by expositors as contrasting with or going beyond neoclassical economics.[1][2]
• "Heterodox economics" is an umbrella term used to cover various approaches, schools, or traditions.
• These include socialist, Marxian, institutional, evolutionary, Georgist, Austrian, feminist,[3] social, post-Keynesian (not to be confused with New Keynesian),[2] and ecological economics among others.[4]
• ...mainstream economics deals with the "rationality-individualism-equilibrium nexus" and heterodox economics is more "radical" in dealing with the "institutions-history-social structure nexus".[6]
• One study suggests four key factors as important to the study of economics by self-identified heterodox economists: history, natural systems, uncertainty, and power.[9]
• Fields of heterodox economic thought[edit]
  American Institutionalist School
  Austrian economics #[20]
  Binary economics
  Bioeconomics
  Complexity economics
  Ecological economics §
  Evolutionary economics # § (partly within mainstream economics)
  Feminist economics # §
  Georgism
  Gift-based economics
  Green Economics
  Gesellian economics
  Innovation Economics
  Institutional economics # §
  Islamic economics
  Marxian economics #
  Mutualism
  Neuroeconomics
  Participatory economics
  Post-Keynesian economics § including Modern Monetary Theory and Circuitism
  Post scarcity
  Resource-based economics - not to be confused with a resource-based economy
  Sharing economics
  Socialist economics #
  Social economics (partially heterodox usage)
  Sraffian economics #
  Technocracy (Energy Accounting)
  Thermoeconomics
  Mouvement Anti-Utilitariste dans les Sciences Sociales

Heterodox economics