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A must read if you are tired of destructive policies being implemented around the world by governments that present themselves as capitalists and later blame the market for its “limitations”.
This books presents the nonsense and contradictions of Keynes “economic” theories in a clear and structured fashion.
For many years I’ve believed that many of the horrible economic policies implemented by governments around the world where part of the socialist inheritance the world has absorbed. But much to my surprise, these are all part of the Keynesian doctrine!
Although it’s only at the end where there is a brief reference, Keynesian policies have contributed to keep and increase poverty around the world.
Excellent organization and very easy reading.

Lewis' work is easy to read and follow. Well organized into "five parts" (actually a Part Six is called "Envoi") which are aligned in the Contents section which shows visually how Lewis has arranged the chapters between Parts Two and Three; the sections of his work where Lewis contrasts what Keynes said and where he is off. The Endnotes section is also important to understanding Lewis' points since this is where he goes into more detail of certain topics (indicated by superscript letters). Reading these endnotes as they occur brings further insight into Lewis' narrative.

Most works take up one side or the other on economic philosophy. There is more written about Keynes or interpretations of Keynes. There are fewer books about what alternatives may be available to these policies. This is one of the few books, if any, written that compares point by point the differences between what Keynes wrote and counterpoints to his thoughts. As with Marx, who left an explanation of how socialism would work to those who followed, Keynes left much of just how his theories would work to those who followed. Even Keynes himself wasn't a complete Keynesian (as we know it today)! With this in mind, those who interpreted Keynes acting under what they thought where his percepts may not have produced the results Keynes would have desired.

What we do need to understand are the points and counterpoints of the arguments, made by the press, media, and some government officials. This is a good book to read. Especially for those who don't have much say about monetary or fiscal policy; but we have much at stake as participants in the economy that our elected officials (economists who influence them too) are arguing for or against

Found within the pages:

The interplay, often complex with unintended consequences between
- interest rates
- inflation
- taxes
- adding money to the economy (or taking it away) and why this increases prices
- Banks and money supply
- Consumption versus production
- Deflation and inflation
- Animal Spirits and Investor Expectations
... and much, much more ...

An explanation as to why the U.S. health care system has rising costs (supply limited by government interventions, while demand is encouraged through other government policies). Similarly, the U.S. higher education system's rising prices is a result of stimulating demand through loan and grant subsidies while the supply of higher education is relatively fixed (demand growing faster than supply).

He mentions the "paradox of thrift" - where it is virtuous for someone to be thrifty and save, however this is destructive for society as a whole when everyone is saving and not spending (what happens during economic busts).

The point is mentioned where there will always be a bottom decile of poor (a utopia is unrealistic); however, those within this decile are constantly changing so the poor are not the same people over time. In other words, there is a distinction between a statistical category of people, and flesh and blood human beings. The first remains fixed by definition, the later does not as some people outgrow the category's definition and others enter it over time.

Chapter 14 ties Lewis thoughts together with three industry's case studies, housing, drugs companies, and auto, surrounding the mid 2000's bubble and bust to show the impact of a " truly [a] Keynesian world, although not, one thinks, what Keynes himself expected from greater government control of the economy."

Of particular interest is Lewis' discussion in Chapter 16 on policy errors that keep wages, or other business expenses, higher than they would be if both prices and wages fall together (recession). Of note is this same tendency today to keep wages up in addition to adding other business costs such as health care while economy-wide prices fall. Result: stubborn and persistent unemployment since businesses don't have the profits to keep workers let alone hire additional ones.

What the subtitle should really say: What he said and didn't say, but many think he did (not a critique, but a statement as to what the book discusses).

Other works valuable works for a better understanding of the various issues:
The Great Inflation and Its Aftermath: The Past and Future of American Affluence by Robert J. Samuelson
The Ascent of Money: A Financial History of the World by Niall Ferguson
Money: Whence It Came, Where It Went by John Kenneth Galbraith
Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics by Eric D. Beinhocker

For a read about perhaps why crisis can be cleansing ... and to a point Lewis makes, that some unemployment and non-home ownership is good - this allows the economy to progress, rather than get mired down and not be able to change. He also discusses how busts are needed for the cleansing function and to redirect investment toward future growth.
 Pop! Why Bubbles Are Great For The Economy by Daniel Gross

Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money?

The author does an outstanding job of thoroughly discrediting John Maynard Keynes and uses the information presented to explain the current state of the economy and how Keynesian thinking and policies are what got us into this mess. If the government truly wanted to follow Keynes, as some of them mistakenly think they are, they would reverse the money flow from the Fed into the market. The original idea Keynes had was for deficit spending to "get the economy going" , but in better economic times the governments were supposed to pull the money back out of the system. In the end, it doesn't really make a difference if they truly followed Keynes, the policies just don't work. Very readable,interesting,extremely relevant and useful.

This book describes Keynesianism in detail, then carefully and precisely destroys it, leaving a pile of smoking ruins. A must read.

Way back in high school, I took a course called "Great Books", where we'd read classic philosophical works (from Plato and Aristotle to Freud and Nietzsche and so on). The structure of the class was such that we'd spend a week on a book, discussing what exactly the author was trying to say. Only on the Friday of the week would we get to actually discuss whether the author is correct. It was important to spend most of the discussion on what the author actually wrote, because without that, any opinion one might have of the author's work is likely to contain a great deal of projection and ignorance.

"Where Keynes Went Wrong" does exactly that: Hunter Lewis explicitly reviews (with citations) Keynes work, focusing on "The General Theory", but also including occasional other books and articles and public statements. Moreover, he gives the reader a chance to read the entirety of Keynes' points alone, without rebuttal (for the moment).

It's very interesting, because when discussed without contradiction, Keynes mostly makes sense:

- high interest rates mire people in poverty, making it difficult for the economy to grow as a whole.
- consumption is the purpose of the economy; without consumption there is no economy
- money put in savings hurts the economy because it doesn't get spent on consumption
- therefore while it is wise for the individual to save, it is bad for the overall economy to encourage savings (the "paradox of thrift")
- businesses essentially have to guess how to invest and grow, and frequently guess wrong
- businesses rely not on cold calculation, but "animal spirits", a general gut feeling of how their business/market will perform
- the stock market makes this guessing even worse, contributing to a "casino atmosphere"
- stocks going up increases business confidence, stocks going down decreases business confidence
- this leads to a vicious circle, with stocks in a downward spiral decreasing confidence thus making stocks go down further
- government can make this a virtuous circle, a "quasi-boom," by allocating money such that stocks go up, thus increasing business confidence

... and so on. This isn't an exhaustive list, of course, but these ideas all sound reasonable. They fit our prejudices and our intuitions. Even the paradoxical ones make sense: yes, saving is good for the individual, but bad for society, since the savings isn't shared/invested.

The Lewis does us the favor of taking these points, point by point, and answering them. He doesn't merely "disprove" them as being illogical or unsupported or self-contradictory; he also explains how interest rates really work, the role of consumption in the overall economy, how savings works, how businesses make decisions. It isn't just theoretical dissertation, but a practical discussion of economics, both micro and macro. It isn't a polemic (at least not in these sections), but an economics lesson.

Consider interest rates: Lewis points out that interest rates are -prices-; and they're not just any prices, they're among the most important prices in the economy. It's the price of encouraging the savings of the economy to be invested elsewhere. Higher interest rates encourage a greater supply of lending, but lower the demand for it. Lower interest rates discourage the supply of lending, but increase demand for it. Because low interest rates decrease the supply of lending, what happens is that the Fed lends that money, effectively "printing" it, or "injecting" it into the economy. What is being lent isn't from others' savings and investments, but from thin air. This in turn causes inflation, as in the 70s, though the inflation can be hidden by pumping up the value of particular assets, as in the tech bubble of the 90s or the housing bubble of the 2000's. Note that stock prices and housing prices aren't included in most measures of inflation.

Thus, Lewis argues, Keynes' desire to fix interest rates at a low level is no different than the monopolist's or trust's desire to fix the price of goods (at a high level), or a labor union's desire to fix the price of labor (at a high level), or New Yorkers' to fix the price of rent (at a low level). Fixing interest rates is even worse than most of these others, since each of these instances usually only affects a piece of the economy, while interest rates affect everyone, especially by making bad investments look good. An investment could be losing money, but if one's rate of increase is faster than the official rate of inflation, it looks as if one is making money in spite of the losses - which describes every asset bubble in history. The inflation rate of housing was really very high, but it wasn't counted as inflation, so it looked like a great investment. The only way to tell that housing was a bad investment was to understand what a bubble looks like, which even experts don't always get right.

That's just for one single point made by Keynes. The rest are just as informative.

The reason I give this book 4 instead of 5 stars is that there are parts of it where it does read like a polemic, where it really just sounds like the author is venting, focusing more on ridicule than reasoned argument. Usually, these are in their own sections, not part of the main argument, so they don't distract too much, but they're there. The non-polemical arguments, especially the exposition of Keynes' theory and its eventual rebuttal, are very much worth the reader's time to pursue. There is much to be learned, here.

good review