DeLong vs. Boldrin

It was actually a great debate. Boldrin makes a very profound, Austrian point, against the aggregate Keynesian view of DeLong.

DeLong isn't an economist.

He's a cartoonist.

And Boldrin obviously resented the fact he found himself in "debate" with a cartoonist, rather than an economist, as he makes clear in his very first remarks.

Note well that DeLong has Hayek wrong (typically).

Hayek showed that artificial booms and inevitable busts were a time-structured misdirection of production resources problem (Hayek included housing among production resources). Yes.

But Hayek also said that fiscal and monetary policies might be necessary during a "secondary depression" deflationary downward spiral. DeLong purposely or out of ignorance leaves out this part of Hayek. And Hayek always said that for political reasons public works and other employment and safety net policies might be appropriate in a period of deep depression.

Hayek even recognized the political appeal of using inflation to solve "sticky wage" problems -- a problem that was known to economists long before Keynes (even if modern "rocket scientists" are ignorant of this history).

AK: "Boldrin says, "If the guy has a broken nose, you don't put a band-aid on his butt." I stopped listening shortly thereafter."

But I thought you were interested in health care economics?

DeLong resorts to buffoonish ad hominems right out of the box. I seriously doubt I could put myself through the rest.

Arnold, you've really mischaracterized what Boldrin does here.

Indeed, Boldrin is in fact very enlightening.

He shows in my view quite clearly that the current US economic woes are not due to some sort of mysterious failure of animal spirits to maintain aggregate spending but rather due to decline in real wealth.

Whereas De Long is offensive and intolerant as he almost usually is.

DeLong keeps saying that the government's money is just as good as anyone else's, like that's a statement no reasonable person could disagree with. It seems like any basic understanding of microeconomics & how price guides spending to more productive areas would make it hard to say that with a straight face, let alone to say it as if it's a foregone conclusion.
It seems to me that any defender of the stimulus has a very large explanation to make as to how that money is going to improve the economy better than just handing cash out to individuals. Why aren't they called on that more often?

Yes Kebko, good catch on the oft-repeated governemnt money is as good as anyone else's. He also would then say it makes for JOBS...like it is so obvious.

You unintenionally mentioned a "straight face"...but I could not take my eyes off the facial contortions he made in his disbelief. He makes faces like Chloe on '24' when she has to do a computer task she disagrees with!