What is the Keynesian approach to business cycles?

0:00The Keynesian approach is the problem, the pressures are caused by insufficient demand, either consumer demand or investment demand, insufficient spending, spending is too little for some obscure reason. In the Keynesian system, consumers are passive sort of idiots and their spending is determined as a certain fraction of their income. So the problem is that businessmen are irrational and they're too pessimistic. So therefore government has to step in and supply the deficiency in spending. The government is sort of like the Santa Claus or whatever, it comes in and corrects everything. And the god out of the machine, as they say in Latin, Deus ex machina, that's all wise and all good and benevolent, and steps into the supply of efficiency of demand.

0:45Well, in the Austrian Misesian view, it's just the opposite. The problem is government, they begin with, government and its banking, separate banking system, Banking System, which creates unsound investments and creates the necessity of recession and therefore the only, the best thing the government can do is to lay hands off, to do nothing, to allow the recession process to work quickly, because if the government steps in and interferes the recession process, it just drags out the recession into a permanent depression.