Austerians, Keynes and Kalecki

James Montier of GMO is interviewed at Welling on Wall Street, with analysis at FT Alphaville.  He criticizes the central banks for puffing up asset prices with the QE programs, but acknowledges that the real problem are conservative ideologues' blind spots toward government and "free markets:"

Though, that’s not to say Montier begrudges the state support the economy’s been getting. He explains that on this front he’s been greatly influenced by the work of Polish economist Michal Kalecki, whose theories follow a similar vein to those of Keynes.
Indeed, the whole point of Keynes’ and Kalecki’s arguments about countercyclical policy, he says, is that during a collapse of business profitability, the government — through fiscal transfers and stimulus — should plug the gap.
And yet, he adds, business is so hung up on the idea that government is inherently bad and interferes in their markets — and because business likes the idea of having power over its workers which tends to be eroded by things like fiscal deficits — that business ends up supporting policies that actually undermine its own profitability.
It is, in his opinion, very bizarre behaviour and one of the paradoxes of capitalism, which many free market types just don’t get. Montier, unsurprisingly, is no fan of austerity as a result.

That is the thing that Republicans don't seem to get.  The private sector screwed its' own pooch, no matter how hard they try to blame government for supposedly forcing banks to lend to brown people.  Regular folks are too far in debt to keep the economy going, so you need government spending to prop it up.  Because Republicans in Congress are too stupid or too convinced of their own bullshit to allow the spending, the Fed has to take a less palatable and less effective method, which is buying assets from banks.  The resulting speculative mania leads to more unstable markets.  It would be much better for the government to run large deficits to get the economy going stronger, and then raising taxes, especially on the wealthy, to pay for it.  They could even raise taxes on the very wealthy right now and not slow down the economy any, because a man's 5 millionth dollar isn't very crucial to his spending habits.