Comments on: Shlaes Back to Krugman

By: Keynes – The Forgotten Man « econoblog101

Keynes – The Forgotten Man « econoblog101 — Tue, 02 Jun 2009 07:52:31 +0000

[...] – The Forgotten Man Once again, there is confusion about what John Maynard Keynes actually said in his General Theory. Let me put it very shortly: if [...]

By: Dirk

Dirk — Mon, 01 Jun 2009 17:33:26 +0000

Once again, there is confusion on what John Maynard Keynes actually said in his General Theory. Let me put it very shortly: IF AND ONLY IF monetary policy fails, government spending must come to the rescue to prop up demand.

The people that were behind Keynesianism have not much in common with the economics of Keynes. Keynes was misinterpreted by people with political goals that used him to build a larger government sector. Keynes himself never said: deficit spending by the government is always good. Only if monetary policy fails, to repeat that argument, would fiscal policy have to save the day.

So yes, Ms Shlaes, you are misrepresenting John Maynard Keynes. And yes, Keynesians also do it. But then, how can you write a book about the Great Depression without having read the General Theory? That is really too bad, since the book provides a nice panorama of the Great Depression. I quite like it, but it could be way better if the economic theory behind it would come out better. (I just finished ch. 4, but read all pages mentioning Keynes.)

Let me give you an example: on p. 272 you let Anderson say that Keynes thought corporate surplusses were bad. This is nonsense. Keynes work is based on investment being driven by financial markets. How these could work without profits is a mystery to anyone.

By: How denialism works « how denialism works

How denialism works « how denialism works — Fri, 24 Apr 2009 23:28:09 +0000

[...] likes to pretend it’s the other way around—that she’s using authoritative data while Krugman and I [...]

By: Bob Fannng

Bob Fannng — Tue, 17 Feb 2009 07:33:03 +0000

Anmity if you read William Manchester “Glory and the Dream,Vol I” You will see an acrmonious relationship between Hoover who labled the NRA ‘totalitarian” .
FDR on the otherhand had public support a successful financiing and an optimistic view of hoe a friendly USSC would interpret the Commerce Clause & thus overreaching fereal jurisdiction.
How ’bout a date with a montana cowboy?

By: Tom

Tom — Fri, 09 Jan 2009 01:12:18 +0000

To all who of the non-Keynesians who read this blog (including Ms. Shlaes), I have a question: when you say that World War II got us out of the Great Depression and not the New Deal what exactly do you mean? What in simple terms is behind the thesis that the New Deal as an economic policy did not help us get out of the Great Depression>

By: El Presidente

El Presidente — Mon, 05 Jan 2009 16:35:20 +0000

I think that Jerry Jordan’s comment is the most important here (both as a criticism of Krugman’s macroeconomics and a criticism of Shlaes’ strawman-Keynsianism).

Krugman treats government spending as if it were real economic activity, and affected the broader economy on a dollar for dollar basis without distortions. This simply isn’t the case, and Krugman himself has said so previously back before he decided he was going to hang the economics and sign on to the liberal-progressive project.

Shlaes, while probably a bit more honest about the numbers, does Keynes a disservice by “summing up” Keynsianism as being about deficit spending. Certainly Keynes suggested that government spending could make up shortfalls in demand, but Keynes’ most important insights were monetary, and his primary policy prescriptions, too. Saying Keynes is about deficit spending is like saying Friedman was about the money supply. Sure, it’s true, but it completely fails to capture the importance of the man’s work.

By: Jerry L Jordan, former Cleveland Fed

Jerry L Jordan, former Cleveland Fed — Mon, 08 Dec 2008 01:16:07 +0000

No country in all history has ever spent its way to prosperity. It is a myth that spending by government, at any level, adds to “aggregate demand,” unless financed by money creation. When there was expansion in the 1930s, it was only when the Fed stopped shrinking the money supply! The relative powers of fiscal and monetary impulses were tested in the 1960s; it was decisive. Fiscal fizzled, both as a stimulant and, with Johnson’s surtax, as a restraint.
The 2008 fiasco is not a “market failure” nor is it a failure of regulation. It is a failure of financial supervision–big time.

By: Sierra

Sierra — Mon, 01 Dec 2008 22:30:25 +0000

To Confused Reader:

Keeping discussion on the merits is much more satisfying than ad-hominem comments by those who are unwilling or unable to address the issues.

By: Confused Reader

Confused Reader — Mon, 01 Dec 2008 19:10:31 +0000

Please explain how Ms. Shlaes earned the title of Senior Fellow at this institution? She must have a strong economic background to present an article such as this. Were here academic credentials honed at such deep thinking instutions such as the Heritage Foundation, the Manhattan Institute, or God forbid, the Rutherford Foundation. I imagine Professor Krugman shakes in his boots when Ms.Shlaes levels her economic blunderbuss at him.

By: James Roberson

James Roberson — Fri, 28 Nov 2008 14:12:45 +0000

I was beginning to wonder if Krugman had actually read your book. History seems to be unimportant and ignored by Krugman unless it suits his party’s agenda. As far as I’m concerned Krugman and his counterparts are the problem, since they have been misleading students about the Great Depression for years.