Stimulus Hype: Sorting Out Keynes (Part III)
So now there's a stimulus package pretty much in place. And whatever all the Right Wingers in the blogosphere may think about it, it's based at least partly on Keynesian economic theory. Will it work? Time will tell.
Bruce Bartlett (not a Bush fan), had an excellent column in Forbes late last month on Keynes, the Depression, and the modern critique of Keynesian economics. He also does a good job of explaining the different roles of fiscal policy and monetary policy. And he describes the role of Alan Greenspan in the development of the economic insanity that helped fuel the current meltdown.
Dick Morris does a good rendition of the "less spending, smaller government" song.
Republicans should stay away in droves. On this issue, they can recapture something they have lost over the past eight years – the mantra of less spending and smaller government.
Geoff Gannon at Seeking Alpha provides a good analysis of how Keynes fits into modern thought. And he looks at the role of corporate America:
Our biggest problem is not underconsumption; it is balance sheet weakness.The stimulus promoters suffer from man with a hammer syndrome. They have just one tool. It may be a powerful tool. I'm not arguing that point. I don't have to. It's the wrong tool for the job.
Perhaps my favorite piece was at Free Republic:
Economic policy is based on a collection of half-truths. The nature of these half-truths changes occasionally. Economics as a scholarly discipline consists in the periodic rediscovery and refinement of old half-truths… We know that a few extreme approaches that have been tried yield lousy results – central planning, self-regulating financial markets – but we don't know much that is constructive beyond that.
My undergraduate degree combined psychology and sociology – the study of human behavior, individual and corporate. It's the redheaded stepchild of real science. The number of variables to be accounted for in the study of human behavior (alone or in groups) is huge, and ethical considerations almost always prevent the manipulation of at least some of those variables. The result is a decreased level of scientific credibility.
Economics – why that's just a subsection of the study of human behavior, the redheaded step-cousin of science. And half-truths are all you get…
Photo courtesy of iStockphoto, Image# 6052832
1 Comment
Other Links to this Post
RSS feed for comments on this post. TrackBack URI
By sohbet, February 15, 2009 @ 10:57 am
Turkiyenin en iyi online chat sohbet sitesi