Advocating the turning over of Social Security management to Wall Street after the 2008 crash is a little like asking Paris Hilton to pilot Air Force One, or tabbing Charlie Sheen to manage the inventory of a hospital pharmacy — completely nuts, but to David Brooks, that makes Mitt Romney the “serious” candidate.
— Matt Taibbi (Rolling Stone)
Stroking your chin and saying, well, I don’t believe in [fiscal stimulus] because experience shows that raising growth is hard sounds serious, but it’s actually silly. It’s like saying that it’s really hard to extend the human lifespan, so it’s foolish to believe that an infection can be quickly cured with a dose of antibiotics.
— Paul Krugman (Princeton University)
January 14, 2011. That’s when Stanford economist John B. Taylor made the following arguments:
- Higher government purchases, as a percent of GDP, are associated with higher rates of unemployment. Therefore: “There is no indication that lower government purchases increase unemployment; in fact we see the opposite…”
- Higher levels of investment, as a percent of GDP, are associated with lower rates of unemployment. Therefore: “Encouraging the creation and expansion of businesses should be the focus on government efforts to reduce unemployment. The recent compromise agreement to prevent the increase in tax rates on small businesses and the move to lighten up on the anti-business sentiment coming out of Washington are two steps in the right direction.”
And with that, I lost all respect for Taylor. Continue reading “The Day the Economics Profession Lost Its Last Shred of Dignity”