Well, I’m in the middle of the Monetarist-Neoclassical-Austrian spectrum and I agree with the Monetarists and objects to the Keynesians.
The unstated argument here is that:
1) The American people do not trust their government. All spending is suspect. And they would rather suffer in order to starve the beast than gain relief by feeding it. This isn’t going to change any time soon. Demographics guarantee it. Tilting at windmills is a waste of time.
2) The monetarists failed to make their case with the public. If the monetarists DID make their case with the public by stating that they would in no way expand the government, the public would have endorsed it. I blame this failure entirely on the monetarist public intellectuals who allied with the Keynesians instead of the Neo-classicals (improve industry) and Austrians (improve human capital) with whom most Americans are more sentimentally aligned – puritan ethics prevail..
3) The public is justifiably angry at the financial sector as well as the government. Galbraith, myself, and to some abstract degree Arnold Kling, recommended that bypassing the financial sector entirely and paying down consumer debts was a radical idea, but would have won the hearts and minds of the citizenry, as well as avoiding worldwide price recalculation within the Patterns of Sustainable Specialization and Trade, which is the result of the shock to people’s ability to forecast and plan. (I dont think anyone appreciates the value of Kling’s arguments as adding another tool to the neoclassical inventory.) This was a better solution than the Keynesian OR Monetarist solutions. And it would have astronomically cheaper.
Keynesian spending only works if people trust the government and people only trust the government in small culturally and ethnically homogenous nation states. Monetarists SHOULD be politically neutral, but by allying with Keynesians they become untenable with the public. By allying with Neo-classicals and Austrians Monetarists can become politically neutral, and the public will accept their recommendations.
The importance of this concept is significant – not only for monetarists, but for the country as a whole. Perhaps for the world.