"I know some people who read my blog know Don Boudreaux personally and perhaps eat lunch with him regularly, so I am hoping this message gets through.
This kind of stuff is just unseemly.
This Keynesian explanation is adolescent. Lazily identifying the symptom as the
underlying problem, Keynesians then craft a "theory" that shows just how
inadequate spending can in fact cause inadequate spending. How clever of them!
It’s understandable that many people untutored in economics fall for
this nonsense. Just as many untutored in geography naturally think the Earth is
flat (looks that way, doesn’t it?), many untutored in economics, upon seeing
businesses closing up and workers being laid off, conclude that the problem is
inadequate spending (looks that way, doesn’t it?).
Really? No liquidity demand? No deep uncertainty? No sticky prices? No monopolistic competition? No dual role for money as a medium of exchange and a store of value? No efficiency wages? No flight to quality?
Just low spending begets low spending. Keynesians must really be ignoramuses.
Its one thing to disagree with a theory, its another to erect such an insulting straw man. Why do this?
I look forward to Boudreaux’s promised column on regime uncertainty. If he has an alternate theory of recessions, then I am happy to hear it. Yet, I would prefer if he did not begin by spitting on mine.
Additionally, if Don Boudreaux wants to debate these ideas personally I will be more than happy to. Not because I want to “show him up” though I know a lot of people watch debates for this. But, because by actually engaging one another’s ideas intensely and seriously I think we can come to a deeper understanding."
There really has been a flood of nonsense in the last two weeks about Keynesianism, and I'm not sure why. I don't understand how these people can actually convince themselves that Keynesians are this dumb or simplistic - and not just that, but even when they get informed about their misunderstandings they dig in and mock the people who are informing them. It's not pretty. People read these blogs and these guys do get out into the media, and for that reason alone it's worth responding to. But every post I see like this makes me think of them all more like politicos and less like economists - a change which I genuinely find unfortunate.
Anyway - I think there's a challenge in that last paragraph. Maybe Smith will come up to GMU - I'd show up for that. I might even go down to North Carolina to see it.