Monday, September 05, 2011

Another big shot economist who doesn't have a clue....

At least he admits he has been wrong. But his worrying over budget deficits spooking the markets and somehow effecting interest rates simply means he still doesn't have a clue.

During depressions history shows us that no one has money or credit so someone has to create it. Either forgive a large amount of debt, (in bible times it was called Jubilee, even they got it!) pay down the debts, or give everybody the money to get back on their feet.

Until we figure a way to get money into the citizens hands we are in a DEPRESSION because we are broke and can't recover if we don't have a job.


What To Do About Jobs?
What To Do About Jobs?

My talk from August 31, 2011:

It is hard to talk about macro right now. It is hard, in large part, because virtually all of us macroeconomists have been wrong over the past four years. Thus the past four years is that it’s been a great process of unlearning. And, distressingly, we have not been unlearning old things and learning true new things. We have, instead, been unlearning relatively new things but not replacing them with new new things. Instead, we have been going back to still older things. And these older things now appear to be more true than we imagined a decade ago, or indeed more true--at least for our economy right now--than economists have thought them at any time since 1950.

One way to look at the 60 years before 2007 in macroeconomics is as a long intellectual twlight struggle in which Milton Freedman in the end beat John Maynard Keynes, and beat him decisively. There were three major questions in macroeconomics on which Friedman and Keynes differed, and by 2007 an overwhelming majority of macroeconomists agreed with Friedman.

The first question was: Could central banks technocratically and apolitically do the macroeconomic stabilization jobs by themselves, or did they require help and assistance from the more political branches of government? Could central banks all by themselves make Say's Law that supply creates its own demand true in practice even if it wasn’t true in theory?

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