Tuesday, October 5, 2010

Brad DeLong's Frustration

Here is a post by UC Berkeley economics professor Brad DeLong in a post about the stagnation called the Great Recession:
If you had told me four years ago that come October 2010 I would be forecasting that highly-efficient American steel companies would be operating at only 70% of normal capacity in 2011, that the U.S. Treasury would be able to borrow for 30 years at 1.61%/year real and at 3.71% per year nominal placing all inflation risk on the creditor, and that the last six months' CPI inflation would be 0.1% at an annual rate...

...I would simply not have believed you. I would have said that that could happen in some strange alternate universe in which Spock was evil and had a beard, but not in any real world that could plausibly exist.

...I would have said that, in the real world, with that much excess capacity and those low borrowing rates, 90% of both the Senate and the House would get behind big programs to push taxes off into the future and pull infrastructure into the present.

How the &^#%^*@! did we get here? And why can't we get out?
I'm not an economist, but I'm flabbergasted that, 80 years after Keynes diagnosed the Great Depression, today's crop of "economists" can't see the facts that staring them in the face and undertake the actions that Keynes laid out. Instead, the "science" of economics is rife with ideological quacks and charlatans who sell snake oil as "economics". They simply are unwilling to deal with the situation at hand.

I would never have thought that 8 decades of "education" and "research" would turn a field of half-competent economic practitioners into a field which is nearly 100% ideological poseurs pretending to economic "science". Tragic!

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