"Words ought to be a little wild, for they are the assault of thoughts on the unthinking" - JMK
- One little pet peeve that has come up recently: people who, when speaking of the demand curve facing all firms in a market for a single product, call it "aggregate demand" instead of "market demand".
- Sometimes I just don't understand how other bloggers' minds works. Thankfully, probably the two blogging minds I understand least blog together (easier to contain my puzzlement that way). The most recent zinger was this post from Don Boudreaux where he presents the most common argument for constitutional limits to democratic governance - the argument that I accept for constitutionalism, and the argument that has allowed constitutionalism to sweep the free world - and he asserts that that argument is "seldom identified" as a reason "for restricting the role and scope of government". Really Don? Really? I'm filing this under "inventing an opposition out of thin air just so you can argue with them".
- LK makes an interesting point discussing this Skidelsky interview. Everybody ought to know by now that the 1930s in both Britain and the U.S. amounted to blind groping towards something like Keynesianism. Understandable, of course. Keynes didn't even have a full grasp on Keynesianism until 1936, and these things take time to digest. As we know, his ideas became very popular very quickly, and were eventually used in policy making more deliberately. LK notes that the first time Keynesians really had the reins of policy was during WWII, and their task then wasn't to increase aggregate demand, but to tamp it down and control inflation. When I was looking through the Keynesian predictions for the post-war period I saw this a lot too. They stated regularly how important it would be to keep hold of inflation now that we're out of the depression. One new policy tool that was often cited in this regard was Social Security (forced savings). Hayek said that Keynes was worried his followers might turn into inflationists. I wonder if this is just another of Hayek's many tall tales. If you think about the Keynesian scene in the 1940s, there really doesn't seem to be much reason to think they'd turn into a bunch of inflationists. There was inflation then, of course. But then again - it's not cheap to kill fascists. I don't know how attributable that is to Keynesianism, particularly when the administration hired the Keynesians to keep all that in check.
- Brad DeLong takes Paul Krugman to task for yelling at David Glasner. I agree strongly. Take a look at the update in Glasner's post - he links to F&OST. I made the same connection to the liquidity trap that Krugman did (before Krugman did), without treating Glasner like an enemy (which he's clearly not). [UPDATE: After all, if Brad DeLong has to tell you you're being too harsh to someone on the internet, you know you have a problem! :) ]
- Speaking of people who link to F&OST.
Demand, Supply, and Macroeconomic Models
1 hour ago