Paul Krugman is sick of morons saying “Keynesians said the stimulus would fix the economy, and it didn’t, so Keynes was wrong”.
And indeed that is moronic. We need to see the counter-factual. We need to see what would have happened without the stimulus.
But Paul doesn't stop there. He asks people making the above argument,"What part of “the Obama plan just doesn’t look adequate to the economy’s need” is so hard to understand?"
Somehow Paul doesn't seem to see that he is making the exact same error for which he's excoriating the "cockroaches".
That is to say, we are still missing the counter factual where we run Paul's 1.2 trillion dollar stimulus and see what happens. He simply assumes that the bigger stimulus would do the job.
In other words, his position is non-falsifiable and unscientific. In fact it's a bit cockroach-y of an idea.
People, at least the cockroaches have an official government attempt at a counter-factual, namely the infamous Romer-Bernstein graph showing that the stimulus would keep unemployment below 8%.
Krugman has nothing but the sound of his own voice.
In other words, we have no data available that allows us to adjudicate between the "stimulus won't work" and the "a bigger stimulus would have worked" positions.
3 comments:
Empirical macroeconomists have been trying to estimate what would have happened over the business cycle under various policies. Of course they have only nine or so post war observations.
You are making it too complicated. Krugman needs to be bashed over the head with simple.
Why would more money (or more debt) improve anything? Why would printing more little pieces of paper improve anything? By making it almost stupidly simple, the stupidly simple can notice that they wouldn't be able to make their own lives better by taking his advice, so why should it work for the government?
HE WAS A BEETLE, DAMN IT!
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