The Return of Depression Economics and the Crisis of 2008 by Paul Krugman is written by a brilliant Nobel Laureate whose arrogance and intolerance leaves him unable to countenance any deviance from his scientific (that is, scientistic) dogma. He gives a reasonable, mainstream interpretation of recent international economic history, which makes sense, since that is his specialty. I won't agree with everything he said by any stretch of the imagination, but there wasn't a lot that was off-the-wall, either. The rest of the book contains little else besides misstating his opponents' arguments, oversimplifying, and repeatedly applying a single metaphor (the breakdown of the "monetary" system of a babysitting commune/club) to a variety of situations without heeding the mere possibility that the New Keynesian focus on aggregate demand may not actually explain every modern economic crisis.
In my last post from a couple weeks ago, I put up a youtube music video which explained the Austrian Theory of the Business cycle, while giving an actor portraying Keynes to at least state the influential economist's argument (which wasn't really Keynes's argument, although it is what "Keynesians" say today). I don't believe that anything which the actor playing F.A. Hayek said is objectionable or mystical. Nonetheless, when Krugman discusses the pre-Keynesian view of the business cycle that crises are caused by malinvested capital, he portrays the Austrian Theory as this perverse, Dark Ages conception wherein the economy must "pay for its sins." If you click the link, you'll also see that he has his history all screwed up when he makes it out to be "before" Keynes; fiscal stimuli were already proposed before the Austrian theory briefly achieved prominence. Also note that another prominent Keynesian, John Taylor, makes arguments similar to the Austrian theory, minus the element of the capital structure. Is he living in the Dark Ages too, believing the economy has angered a jealous god who now desires to make us pay the indulgence of unemployment?
There are other areas where Krugman's intellectual dishonesty is just as apparent (I say dishonesty because he's too intelligent to just be ignorant about it). He throws out the Community Reinvestment Act as a contributor to the crisis (an area I actually agree with him on in the grand scheme of things) because it was first passed in 1977, altogether ignoring that conservatives argue that it was later legislative alterations upping enforcement which caused problems. Krugman also brusquely dismisses any form of supply side economics as being anything more than the garbled popular interpretation academic debates by conservative ideologues, even though supply side economics is a distinct school of macroeconomic thought, with notable academics like Arthur Laffer. Nothing I'm saying is particularly arcane or academic; these are issues that people conversant in macroeconomic policy know as common knowledge. That includes, of course, Paul Krugman, but that doesn't keep him from saying otherwise, apparently.
This book is purely ideological. Krugman is sneering and absolutely asinine. Anyone who keeps track of the issues at a slightly deeper level than watching the business channels and reading the Wall Street Journal would see each of the issues I raised immediately. And if it doesn't seem like I brought up an awful lot, I guess I didn't, but that is because everything Krugman says besides these haphazard drive-bys targeting other schools of thought is only asserted; he doesn't actually present other explanations of historical events he provides except to present them as naive (although the ones he chooses to bring up are mostly populist and virtually by definition are naive). His presentation, besides the ridiculous, strained metaphors and ivory tower sneering, isn't terrible. It's well written, definitely, and if you're liberal-but-not-socialist and wanted to feel like you have a handle on macroeconomics, you would probably love it. And that is exactly the target audience of the book, and it will allow them to remain cheerfully ignorant but feeling totally justified in condemning the many failings of the free enterprise system.
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