{"id":23615,"date":"2017-01-11T08:31:42","date_gmt":"2017-01-11T13:31:42","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=23615"},"modified":"2017-01-11T08:33:15","modified_gmt":"2017-01-11T13:33:15","slug":"tom-ferguson-monetary-policy-cant-levitate-a-broken-economy","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2017\/01\/11\/tom-ferguson-monetary-policy-cant-levitate-a-broken-economy\/","title":{"rendered":"Tom Ferguson: Monetary Policy Can\u2019t Levitate a Broken Economy"},"content":{"rendered":"

Naked Capitalism<\/em> has the article Tom Ferguson: Monetary Policy Can\u2019t Levitate a Broken Economy<\/a>.<\/p>\n

\nTwo generations ago, almost every economist knew what a catastrophe a deficiency of effective demand could create. And in a real crunch, they knew what to do about that. They realized you couldn\u2019t push on a string, so somebody \u2014 the government \u2014 had to borrow and spend when private markets would not. From the 1980s on, though, the fundamental Keynesian point \u2014 the Principle of effective Demand \u2014disappeared in a cloud of statistical double-talk that, when you deconstruct it, turns out to imply estimating potential output as a lagged function of whatever foolish policy is being pursued.\n<\/p><\/blockquote>\n

Of course I like this article. This is what I have been trying to tell people for more than the 10 years I have been publishing this blog. I have been waiting for someone to talk about pushing on a string so I could quote them, and not pretend that I invented the phrase.<\/p>\n

Running across this article is a rather fortuitous bit of luck given my previous post Deficits Matter, Paul Krugman Doesn\u2019t<\/a>. Paul Krugman is one of those economists who learned his economics two generations ago like I did. Krugman’s problem and my good fortune is that he made a living being a noted economist while I had to work as an electrical engineer. He had the privilege of being on top of the economic thinking of the 1980’s to participate in making “the fundamental Keynesian point \u2014 the Principle of effective Demand \u2014 disappeared in a cloud of statistical double-talk.” Since I was too busy earning a living in my profession, I failed to realize that what I had learned about economics in college was being dismissed by the professionals. Now that I am retired and can pay more attention to economics, and it has become obvious that what I learned in college was correct, I can be ahead of the game compared to some of the professionals that sold themselves a bill of goods.<\/p>\n","protected":false},"excerpt":{"rendered":"

Naked Capitalism has the article Tom Ferguson: Monetary Policy Can\u2019t Levitate a Broken Economy. Two generations ago, almost every economist knew what a catastrophe a deficiency of effective demand could create. And in a real crunch, they knew what to do about that. They realized you couldn\u2019t push on a string, so somebody \u2014 the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":["post-23615","post","type-post","status-publish","format-standard","category-stevegsposts","czr-hentry"],"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/23615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=23615"}],"version-history":[{"count":3,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/23615\/revisions"}],"predecessor-version":[{"id":23618,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/23615\/revisions\/23618"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=23615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=23615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=23615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}