Inequality is rising everywhere, as workers without advanced skills are thrown into competition with one another for a dwindling supply of routine jobs. Because of the turning away from Keynesian insight, governments address these problems with inadequate conceptual tools and limited policy remedies. Budget balance is held sacred, which both slows growth and denies governments necessary resources. In the United States, for example, the Clinton administration is placing great faith in the cheap money cure. Thanks to lower interest rates, unemployment has dropped somewhat.
Millions more can find no jobs at all.
Keynes was passionate about low interest rates. But he viewed low interest rates as necessary, not sufficient, since one could not count on private entrepreneurs to invest adequately. In addition, the pre-Keynesian emphasis on fiscal rectitude has left the moderately liberal Clinton administration competing with its conservative opposition to cut government outlay. A public investment package was abandoned early in the administration. If people are to have the courage to change, they need confidence that jobs, and health insurance, and personal security will still be there.