Anyway - he writes a good post, ostensibly in opposition to Steve Horwitz , without really addressing Horwitz's point. That, unfortunately, reinforces Horwitz's implicit claim that Keynesians are consumption-mongers. The charge that Horwitz is "extremely foolish" was uncalled for, but then again I'm sure Horwitz has had worse thrown at him.
Yglesias walks into precisely the same trap I outline here: assuming that "consumption" is the same as "demand". It's not. Firms "demand" labor and firms "demand" capital goods. None of this is "consumption". "Demand" in a monetary economy is simply "when somebody wants to give another person money in exchange for something else". Yglesias is right to trumpet loudly that what we face is a demand problem. But he jumbles that up with Horwitz's talk about consumption. I think this consumption line needs to be firmly put to rest. Nobody should mistake the babbling of a journalist or a politician for the Keynesian position. Consumption may or may not be depressed - it probably is a little depressed - but the real concern is investment demand.