Friday, September 03, 2010

Quote for the Day--Obamanomics is Not Keynesian

"The way the right wants to tell the story — and, I’m afraid, the way it will play in November — is that the Obama team went all out for Keynesian policies, and they failed. So back to supply-side economics!

The point, of course, is that that is not at all what happened. A straight Keynesian analysis implied the need for a much bigger program, more oriented toward spending, than the administration proposed."

--Paul Krugman

2 comments:

Yosh said...

I used to respect Krugman, but in the last few years I have discovered that he is simply a shill for Obama and the democrats.

This notion that Obama did not employ Keysian economics is ludicrous, and it is even more ludicrous that Krugman states that the stimulus package should have been much larger, and wants to throw more money at the issue

Nagarjuna said...

Yosh, I'm not an economist. Are you? Krugman won the Nobel Prize in economics. This doesn't guarantee that he's right. But I think his PhD and Nobel Prize make it unlikely that his opinion is as "ludicrous" as you suggest.

It may be an opinion that some other economists don't share, while others surely do, but just as the dissenters could undoubtedly present arguments for why they don't agree with Krugman, I feel quite certain that Krugman could present some pretty informed and powerful arguments for his opinion, and, when the dust raised by the debate settled, no one would have succeeded in proving his or her case with absolute conclusiveness.

You maintain that Krugman is "simply a shill for Obama and the democrats." I don't see how this could be since he appears to take strong issue with the Obama administration's and the Democratically controlled Congress' handling of the economy.

You allege that Krugman claimed "that Obama did not employ Keynesian economics" and you ridicule him for this. But what I understand Krugman to have actually said was that Obama didn't pursue Keynesian policies far enough for Republican and other detractors to convincingly assert that a Keynesian approach to handling our economic problems has proven itself to be fatally flawed. Krugman argues that a "straight Keynesian analysis implied the need for a much bigger program, more oriented toward spending, than the administration proposed." If you disagree with him on this, perhaps you could explain why.

Finally, perhaps you could share with us your learned economic analysis of why "it is even more ludicrous that Krugman states that the stimulus package should have been much larger, and wants to throw more money at the issue," and why you ever respected Krugman who, so far as I know, has always been Keynesian in his economic orientation which, of course, would have always inclined him more toward the Democratic side of the political aisle than toward the Republican and economic libertarian side.