Friday, July 29, 2011

David Leonhardt on the Economy

A very good article on the U.S. economy and current concerns. Like the article on Krugman that I just posted and my comments on that post, Leonhardt takes a modest view of economic knowledge--that a lot is known that is mostly correct--but that we still have a good deal of uncertainty. That having been said, some ideas and practices are surely true, and some policies manifestly better bets that others. To this I say, Amen!

Krugman: A Short But Perceptive Take on What's Wrong

This is almost too cute, the Keynes must be spinning in his grave remark ("in the long run we're all dead", right?), but Krugman's point is serious and reminds me of my thought about the Great Depression. Why, when we had factories, workers, no natural catastrophes of an unusual sort, not natural cataclysm, did the material world go into such a funk with people wanting? If it's not a natural disaster, then it's a man-made disaster (I would say human now, but then we can blame almost exclusively men!). And if we made it, we should be able to fix it, right? We're having an awfully hard time of it. Perhaps it all is way out of our grasp because of the complexity of it all, but certainly some course of action would prove better than others, such as fiscal stimulus, monetary policy, deficit reduction--they can't be all equally good or bad for our well-being. So, modesty, yes, but choices must be made. This isn't like plagues of old or climate change (yet) that changed the course of civilizations in the past.