This will be short and to the point: Ambrose Evans-Pritchard sees Keynesian stimulus in the bubbling fight over a few rocks in dispute between China and Japan:
Asia is on the cusp of a full-blown arms race. The escalating clash between China and almost all its neighbours in the Pacific has reached a threshold.
War as a diversion? One that would be valuable to China, Japan, and the US given the economic problems faced by these governments?
All other economic issues at this point are becoming secondary.
Yes, perhaps. Ambrose certainly sees it this way:
Even if the immediate crisis can be defused, we are clearly sliding into a new Cold War. While it is dangerous, it could have paradoxical and powerful side effects. Rearmament lifted the world economy out of slump in the late 1930s, working as a form of concerted Keynesian fiscal stimulus. It could do so again.
This would be an answer of sorts to the West's "secular stagnation" – to use the term of former US treasury secretary Larry Summers – or the liquidity trap as others call it. But be careful what you wish for.
Ambrose, perhaps you should be careful. Why do you so easily accept the connection of death and destruction as being the cure for economic stagnation? Is it possible that good can ever come from such total evil?
Even if your moral center is a mess, don’t you at least understand the fallacy of the broken window?
If you are so gung-ho to intervene, why not put two new cars in every driveway? At least millions don’t then have to be murdered for your catastrophic theory – they will merely die quietly due to your continued advocacy of interventions.