Blinder is arguing that of course the Obama stimulus worked, because spending money creates jobs, period. To see just how naive this view is, consider that there is nothing in Blinder's argument restricting it to cases of severe recession.
If mainstream analysts continue to disregard the role of regime uncertainty in the major depressions of the modern era, especially in accounting for their extraordinary duration, then they will only demonstrate the poverty of their own mode of analysis.
It is not the system of private enterprise and free markets that is responsible. It is the suspension of that system. It is not capitalism but interventionism and monetary uncertainty that are responsible for the persistence of the slump.
Recorded at the Mises Circle in Colorado Springs, Colorado; 18 September 2010. Sponsored by Pikes Peak Economics Club.
The only way politicians can really improve the economy — and our lives — is by (1) getting out of the way, and (2) undoing the policies they've previously implemented that hamper it.
F.A. Hayek, in a forgotten article from 1941, observes the tragedy that "men of science and engineers" may "frequently be found leading a movement which in effect merely serves to support the unholy alliance between the monopolistic organizations of capital and labor."
Richard Cantillon saw the essence of the business-cycle problem long ago. When the government's national bank inflates the money supply by increasing the supply of banknotes, he writes, it reduces the rate of interest and can increase the price of stocks. This is a corrupt process.
Thomas Mun set forth what would become the standard mercantilist line.
The Wikipedia entry on the real-bills doctrine advances the controversial proposition that banks can increase the quantity of money without diminishing the purchasing power of each unit. I will refer to it as the Sproul doctrine.
Thomas Mun set forth what would become the standard mercantilist line. He pointed out that there was nothing particularly evil about the East India Company trade. The company imported valuable drugs, spices, dyes, and cloth from the Indies, and it re-exported most of these products to other countries.
