Pluperfect Economic Idiocy

It’s amazing that people publish this sort of stuff. Not the writers for of course there are innumerable people who can type and also know nothing. But something like MIT Technology Review will at least claim to have layers of editors and fact checkers who ensure that dribbling idiocy doesn’t get into the magazine.

So much for the economic education of the people at MIT Technology Review therefore:

In a famous essay from the early 1930s called “Economic Possibilities for Our Grandchildren,” Keynes imagined the world 100 years in the future.

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Keynes Was Right – On One Thing At Least

A contention of JM Keynes was that people hate, really just hate, their wages to go down. This also being subject to the money illusion. It’s that we hate nominal wages, that amount of £s or $s that we get, going down. Doesn’t matter if the prices of everything else more than halve we’ll be mighty pissed off at still being better off if our own nominal wages halve. This is of course silly but it’s very human.…

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Politics Is The Very Reason Fiscal Policy Doesn’t Work In Recessions

It’s a delightful idea, that if we put all the wise people in a big room and get them to chew over society’s problems then they’ll come up with optimal solutions. Reality doesn’t quite work that way as every legislature on the planet shows us. So it is with this idea of Keynesian demand management. Our specific example being this idea that in a recession the government should go spend more so as to get us out of the recession.…

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From Before Keynes – Tax Cuts Grow The Economy Even If Not Quite The Full Laffer Curve

An interesting paper looking at inter-war Britain, showing that tax cuts at the time did indeed grow the economy. No, this doesn’t proves that all tax cuts pay for themselves by bringing in greater revenue – that’s not the claim at all. Only that cutting taxes can indeed be stimulatory and lead to economic growth:

Positive effects of fiscal policy on economic growth: New evidence from the Great Depression in Britain
James Cloyne, Nicholas Dimsdale, Natacha Postel-Vinay 02 November 2018

The austerity, low interest rates, and sluggish growth in Britain between the two World Wars mirror today’s economic circumstances.…

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Simon Wren Lewis Continues To Rewrite Economic History – What Really Works In Recessions?

It’s entirely true that in the recent economic unpleasantness we had a series of tests of orthodox economic theory. We’ve thus – given that science is about testing hypotheses – the opportunity at least to have more knowledge about what we need to do next time. Sadly, those who should be sifting through that evidence to produce the advice are sticking rather more to preconceived ideas than that evidence upon offer. Take Simon Wren Lewis as our example.…

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