Friday, October 14, 2011

Facepalm Economics

Krugman must be tired of hitting his face with his palm by now.

But then, this kind of obliviousness [to facts] is very widespread, and my experience is that if you try to point out the problem — if you try to explain that my spending is your income and vice versa — you get a belligerent response. Y=E is seen as a political statement, which in a way it is if one side of the political spectrum insists on believing things that can’t be true.

It is truly remarkable how, in a world that looks very Keynesian, anti-Keynesian views have taken over. I do sort of understand why. Part of the story is the perceived failure of the Obama stimulus, which is seen as a refutation of Keynesianism even though those of us who took our Keynes seriously predicted that this would happen. 
I run into this constantly on Twitter.  The anti-Keynesian talking points are so well embedded into the TeaOP zombie unconscious that any attempts to point out that the math doesn't support their policy positions, all you get back is "Keynes is wrong!"  Heaven forbid they actually try to figure out why Keynes and his disciples might have been wrong about some things but quite right about others.  Just the way the supply-siders are right about some things (supply side investment grows the economy in the long run) and wrong about others (tax cuts pay for themselves).

I understand that Friedman made economics political by drawing a too-sharp line between the private and public sectors, but the time has come to put away the knives and figure out what the right policies are to draw our economy back from the brink of another recession.  We've lived with a divided economic house long enough.  Time to pull together and synthesize a useful solution to our ailing economy.

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