Tuesday, August 31, 2010

Keynesians were right

Not that they'll get any credit for it or that anyone will listen to them now.
On the analytical front: many economists these days reject out of hand the Keynesian model, preferring to believe that a fall in supply rather than a fall in demand is what causes recessions. But there are clear implications of these rival approaches. If the slump reflects some kind of supply shock, the monetary and fiscal policies followed since the beginning of 2008 would have the effects predicted in a supply-constrained world: large expansion of the monetary base should have led to high inflation, large budget deficits should have driven interest rates way up. And as you may recall, a lot of people did make exactly that prediction. A Keynesian approach, on the other hand, said that inflation would fall and interest rates stay low as long as the economy remained depressed. Guess what happened?
I'm sure you readers know the answer. But the perpetually wrong will never admit it, because, well, they just don't do that. Confidence in one's wrongness gets you a gig in the TV punditry. Especially if it supports the preferred narrative. Thoughtful, nuanced analysis, not so much.

[More posts daily at the Detroit News.]

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Anonymous Anonymous said...

You, with a high school education, lecturing us about Keynesian economic theory is absurd. What a joke. You uneducated harridan, you haven't a clue regarding the subject you are lecturing about.

I await your response (or that of your friend with the diminutive manhood who wants to shoot conservatives). You are both a couple of clowns.

Barnacle Bill The Semen:

If I want to discuss M-Theory, I’ll discuss it with my son who has a degree in physics. I certainly won’t discuss it with a guy who calls people matey and says crap like “blow the man down.”

10:00:00 AM  
Blogger Libby Spencer said...

Sure sign of a huge intellect. A coward who won't own his words with an identity and whose "argument" consists solely of grade school name calling. Wow am I impressed.

11:31:00 AM  
Blogger Capt. Fogg said...

I was expecting his return. These people need us, you know. How else to shore up the sinking self-esteem than by donning a cooking pot helmet and tilting at windmills - or in his case penises.

I'm particularly delighted with the way he takes some tongue-in-cheek comment and inflates it into some huge rubber party doll to fondle, thinking anyone will see it as real and hoping to distract his imagined audience from any possible examination of his assertions. He just can't stop talking about firearms and my privates, or begin talking about anything of substance to back up his cliche' claims as I'm sure you'll notice.

And you, you septic puff pastry -- High school? Sorry, I'm pretty much Eastern Liberal Arts college material except for the Electrical Engineering thing and years in the currency and derivatives markets.

Degree in physics? Oooooooh! I'm glad your son is smarter than you, but it's predictable. You still haven't given anyone a hint as to the authority you might wish to have to say anything about anything.

My background, Mr. Bluster, my status, is not what you imagine or wish it would be, nor is it any of your business. What I know, whom I associate with you don't know and inventing these things won't convince anyone who does that I'm crazy or your inferior or whatever sad, angry little pretense it is you're selling today along with your rented opinions and your nattering about penises -- you
pathetic, name calling poseur.

1:24:00 PM  

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