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Cigar
07-25-2013, 08:46 AM
Both Steve Benen and Ed Kilgore get annoyed at fellow journalists complaining that there aren’t any “new ideas” in Obama’s latest. But why should there be?

It was clear early on that this was a crisis very much in the mold of previous financial crises. Once you realized that financial instruments issued by shadow banks — especially repo, overnight loans secured by other assets — were playing essentially the same role as deposits in previous banking crises, it was clear that we already had all the tools we needed to make sense of what was going on. And we also had all the tools we needed to formulate an intelligent policy response — all the tools we needed, that is, except a helpful economics profession and policymakers with a good sense of whose advice to take.

As Mark Thoma memorably remarked, new economic thinking appeared to consist largely of rereading old books. Brad DeLong says that it was all in Walter Bagehot; I think that this is true of the financial crisis of 2008, but that to understand the persistence of the slump we need Irving Fisher from 1933 and John Maynard Keynes from 1936. But anyway, this is not new terrain.

True, there have been some sort-of new ideas in the crisis: the idea that cutting spending is actually expansionary (although Herbert Hoover was all over that), the notion that there is a magic anti-growth cliff at 90 percent debt/GDP. But these new ideas were wrong, and have collapsed in the face of the evidence.

Maybe we need new ways to phrase our arguments; that’s what Obama was doing yesterday, and I’m still trying to figure out whether his new take is useful. But the amazing thing about this slump has been how utterly comprehensible it is — and the absolute refusal of so many people, economists and not, to accept a framework that has worked just fine.

http://graphics8.nytimes.com/images/2013/07/25/opinion/072513krugman1/072513krugman1-blog480.png

http://krugman.blogs.nytimes.com/2013/07/25/gimme-that-old-time-macroeconomics/

:afro: But But But ... what's the difference?

Chris
07-25-2013, 08:53 AM
Keynesian economics, like socialism, is all theory. It doesn't work in practice.

nic34
07-25-2013, 09:03 AM
Keynesian economics, like socialism, is all theory. It doesn't work in practice.

Except it did until Ronnie Reagannnnnnzap!

It has been the economic model in developed nations after the Great Republican Depression and WW II and during post-war economic expansion from about 1945 to the 1970's.

The global financial crisis in 2008 is bringing a resurgence of Keynesian thought.... get used to it.

Chris
07-25-2013, 09:20 AM
Except it did until Ronnie Reagannnnnnzap!

It has been the economic model in developed nations after the Great Republican Depression and WW II and during post-war economic expansion from about 1945 to the 1970's.

The global financial crisis in 2008 is bringing a resurgence of Keynesian thought.... get used to it.


Except it did until Ronnie Reagannnnnnzap!

What does that even mean?


It has been the economic model in developed nations after the Great Republican Depression and WW II and during post-war economic expansion from about 1945 to the 1970's.

Off and on, competing with the Monetarists and Austrians.

The question to be asked, nic, is has it worked in practice? The answer is a resounding no.


The global financial crisis in 2008 is bringing a resurgence of Keynesian thought.... get used to it.

And its failing again. Get used to that.

nic34
07-25-2013, 09:46 AM
And its failing again. Get used to that.

Only if the corportists get their way....

Chris
07-25-2013, 09:48 AM
Only if the corportists get their way....

Do you mean only if our government gives them their way?

Is crony capitalism Keynesianism? You argued government's been applying Keynesianism.

Common
07-25-2013, 09:59 AM
Except it did until Ronnie Reagannnnnnzap!

It has been the economic model in developed nations after the Great Republican Depression and WW II and during post-war economic expansion from about 1945 to the 1970's.

The global financial crisis in 2008 is bringing a resurgence of Keynesian thought.... get used to it.

What started the countries downslide was the great rich man contrived Savings and loan fiasco that we the taxpayers after being RAPED by these bankers bailed the big banks out and it cost us in the billions.
Deregulation during the bush presidency caused the Financial meltdown and put us where we are today. Conservative views on the economy only benefit the rich.
I have never in my life recieved any trickle down anything, its a crock of crap created by the rich so the republicans can have a talking point to screw the rest of america to benefit guess who.

Chris
07-25-2013, 10:01 AM
What started the countries downslide was the great rich man contrived Savings and loan fiasco that we the taxpayers after being RAPED by these bankers bailed the big banks out and it cost us in the billions.
Deregulation during the bush presidency caused the Financial meltdown and put us where we are today. Conservative views on the economy only benefit the rich.
I have never in my life recieved any trickle down anything, its a crock of crap created by the rich so the republicans can have a talking point to screw the rest of america to benefit guess who.

That's right, trickle down is a crock of crap. It too is derived Keynesian economics. Keynes argued for both spending more and cutting taxes.