> NY Times Book Review, August 23, 2009 > Crossroads > Theory and Morality in the New Economy > By DAVID LEONHARDT
one paragraph: >Beyond the immediate crisis, today’s overarching economic challenge is >figuring out how the country can reap the benefits of Smith’s market-based >system without experiencing the worst of its downsides. In the decades after >World War II, the Keynesians who descended on Washington thought they had >solved this problem. With the right mix of spending, regulation and interest >rates, they believed, the business cycle could be tamed and unemployment >largely eliminated.< this is the famous neoclassical/Keynesian synthesis. > “This was hubris,” Paul Krugman, the Nobel laureate and liberal Times Op-Ed > columnist, writes in “The Return of Depression Economics and the Crisis of > 2008.” Technocrats overestimated how many jobs they could create without > aggravating inflation, and aggravate inflation they did.< that's not true. It wasn't the technocrats who aggravated inflation. If you want to blame anyone, it would be LBJ and his Vietnam war, which kept demand high for years, building inflation into the normal workings of the economy. The was was unpopular, so he couldn't pay for it by significantly raising taxes or cutting non-war expenditure. Of course, he didn't want to cut it back... -- Jim Devine / "All science would be superfluous if the form of appearance of things directly coincided with their essence." -- KM _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
