A Twitter follower accused me of being “a little nasty” with my last blog post (see Figure 1). He was right, and I don’t apologize.
I’ve spent 40 years trying to highlight just how limited the dominant ideas in economics are. But even I didn’t fully appreciate how tiny the intellectual gene pool behind these ideas was.
Then, as I started to write a post on the economic issues in the Bernanke-Summers debate, I re-read Summers’ original secular stagnation post and realized that, not merely were the ideas coming from a single perspective, most of the major proponents of these ideas came not only from the same University (MIT), and even the same seminar (Class 14462, conducted by Stanley Fisher).
There are many ways that you can divide the world into two groups. Men and women, for example—with the former being about 50.2% of the population and the latter 49.8%. Or those that like math and those that don’t—where there are no accurate figures, but I’d hazard a guess at a 10% to 90% split.
The Financial Crisis of 2007 was the nearest thing to a “Near Death Experience” that the Federal Reserve could have had. One ordinarily expects someone who has such an experience—exuberance behind the wheel that causes an almost fatal crash, a binge drinking escapade that ends up in the intensive care ward—to learn from it, and change their behaviour in some profound way that makes a repeat event impossible.
A Twitter correspondent reminded me of this interview from two years ago in Ireland, where the topic was predominantly the Euro, the Maastricht Treaty, and the likelihood of a political break in Europe due to austerity.
The discussion has quite a bit of relevance to what is happening in Greece now–and what may happen in Spain later this year. Hence I thought it was worth re-posting it.
During the 1890s Depression, the businessman Jacob Coxey developed the idea that the unemployed should be hired by the government to work on the badly dilapidated roads. His idea culminated in a march on Washington by over 10,000 people, and his arrest for trampling Congress’s lawns. This 1994 documentary by the Massillon Museum tells his story.
Jacob Coxey was riding home one day and experienced the poor conditions of the road in the 1890s. He also saw many unemployed men walking the streets looking for work. He had the idea to put unemployed men to work towards problems like fixing roads. He took this idea and made the Good Roads Bill in 1892. He presented it to Congress, but that’s as far as it went. He teamed up with Carl Browne.
My talk at the “‘Economics With Justice” seminar series at the The School of Economic Science in Mandeville Place, London. I cover where the argument for austerity came from, a thought experiment about what will happen when a government runs a sustained surplus, and a model showing what happens when the government does run a surplus.
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