David PeónWeb Personal

Sandy, Keynes and war

I recently watched this 2-hours-long sort-of-debate between Krugman and Stiglitz that I strongly recommend (particularly the discussion about the economics of public health, at about min.55): http://economistsview.typepad.com/economistsview/2012/10/video-krugman-and-stiglitz.html

 

At some point, I think it was Krugman talks about the Great Depression and how WWII helped to overcome the crisis. That reminded me of a classical discussion when someone argues "it wasn't Keynes that brought us out of the crisis, it was war!!". A clear evidence of how far some people are from understanding anything about economics... For those who have common sense: of course it was war... and of course it was keynesianism too!! Because, what is it war -from a macroeconomic point of view- but a massive fiscal expansion? What makes us different is that, while some of us prefer keynesian expansions to be invested in hospitals, railroads, universities and research, the only kind of keynesianism that some others accept is war. Indeed, for some reason that kind of keynesianism really makes them feel excited about -horny, I would say.

 

Today this great webpage Economist's view linkes another brilliant article. Indeed, I believe the title of David Callahan's article is one of the best arguments I've heard supporting government intervention in the economy: "Why should government respond differently to natural vs. economic disasters?". "In the wake of Hurricane Sandy, you won't hear public officials saying that devastated towns should pull themselves up by their bootstraps. Why is it so controversial that we should also lend a helping hand during man-made economic disasters?". Indeed, I guess Mitt Romney didn't think governments should intervene in case of natural disasters either when he planned to dismantle the Federal Emergency Management Agency, FEMA. Now his brilliant idea might guarantee Obama's reelection. A victory for those who believe there is rationale for governments to intervene for reasons beyond going to war.

Última actualización en <div class="dateWrap"><span class="day">01</span><span class="month">Nov</span><span class=year">2012</span></div>  

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