How can someone this ignorant be this well read

October 30, 2012 8:13 PM

This is an example of modern Keynesian Economics Similarly, Bastiat's alleged broken windows fallacy involves simply assuming that there's no such thing as genuinely idle resources or an "output gap." In that context, yes, it's a vibrant intuitive depiction of crowding out. But this doesn't counter any Keynesian or monetarist points about the viability of stimulus during a recession induced by nominal shocks, it involves assuming that no such recessions can occur even though they plainly do. In defense of Bastiat, at the time he was writing the modern industrial business cycle was a very new thing and the vast majority of economic ups and downs were caused by things like bad weather which—as you can see in the corn futures market today—is indeed a decisive consideration in an agricultural economy. But that's no excuse for people sitting around in 2012 to be pounding the table with an old book that's non-responsive to modern issues professing to be baffled why people don't find it more persuasive.

The ignorance, and incomprehensible nature, of this kind of thinking(sic) is why the US has pledged trillions of dollars to support the biggest Too Big To Fail banks, and why it will end in misery and penury for the lower 99%

posted by dickfitz2 (2 comments total)

Good post.
posted by andoatnp at 8:16 PM on October 30, 2012

A rebuttal of his argument

This is why modern economics as seen by the Keynesians is dying.
posted by dickfitz2 at 8:18 PM on October 30, 2012