I got around to reading Krugman this morning, and his Fancy Theorists of the World Unite got me going. (What Krugman's good at.)
But before I expressed my outrage I thought I ought to read the "remarkable editorial by Stephen Moore in the WSJ" that PK was talking about. All the while I'm reading it, I'm thinkin I read this before... Where did I read this before?
So, Krugman's take is "the all-out embrace of anti-intellectualism" in the WSJ post.
Noah's take is, I guess, "macroeconomics IS based on common sense" (from his post title). Noah's post didn't make sense to me the first time I read it, but it didn't seem to deserve a second go. (Unusual for Noah, for me.)
The other guy (David Glasner)'s take seems to be that macro is NOT based on common sense. (I couldn't force myself to read the whole article, but he talks of "the law of comparative advantage" and how it doesn't make sense but it's true.)
So I'm thinking Glasner and Noah completely disagree. But I still don't want to re-read either post. The WSJ guy, on the other hand, was simple and straightforward. Full of irrelevant and mis-applied arguments, but nice and simplistic.
I want to look at just one thing the WSJ guy -- Stephen Moore -- said in the article. I think you'll like it:
Macroeconomics simply took basic laws of economics we know to be true for the firm or family—i.e., that demand curves are downward sloping; that when you tax something, you get less of it; that debts have to be repaid—and turned them on their head as national policy.
Petty economics, micro, says debts have to be repaid. According to Stephen Moore, Dr. Stephen Moore of the Wall Street Journal.
That's good, right? Now if we could only hold the petty economists to that view!
The debt of the Federal government did not increase first. It only began increasing after the private economy tanked in the 1970s. And why did the private economy tank? Because of the excessive accumulation of private-sector debt.
|Federal (red) and Non-Federal (blue) debt relative to prices|