Tuesday, July 14, 2009

A Simple Question...

How on earth did this joker land the job of being the voice of "economics" on About.com?

Sure, the site's been in some decline of late. But you'd think they would have cast a bit of askance eye on someone who tries to criticize Paul Krugman on the grounds that "[w]hat Krugman is basically saying is that the last stimulus package raised real GDP but did nothing for employment. So in order to do something about employment we should have... another stimulus package!"

To which one can only respond with, well, this:


OK, not really. But here’s what the data actually look like:

(Picture removed of correlation between interest rates and unemployment.)

Of course, we all understand that the correlation runs the way it does because the Fed cuts rates in an effort to fight recessions.

But here’s the thing: a lot of people are asserting that because unemployment has risen along with the budget deficit, fiscal expansion has failed or even made things worse. Why don’t we apply the same standards to monetary policy?

OK, I actually know the answer: it’s ideological. Fiscal expansion bothers people because it violates the dogma that government is the problem, not the solution, whereas monetary policy has become accepted as a mainly technocratic thing without political implications.

But if we treated fiscal policy the same way we treat monetary policy, it would be clear that we need more stimulus, not less.

Of course, this guy teaches at the University of Western Ontario, which isn't exactly a bastion of Keynesian thought.

(Well, maybe I should say "teaches", as he isn't a professor. Or a doctor. Or an academic economist, arguably, since his Ph.D is going to be in Business Administration. When he finishes it. But, whatever, close enough.)

Still, his responses stand out simply because of how ludicrous they are. Sure, there's a cottage industry in really inept attacks on the man, but at least they make real arguments. The best this guy can come up with is this dribble?

Don't, aha, quit your day job.

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