This quotation appeared on my Facebook page (lifted from Robert Higgs and sourced as Psalm 26:11) and is dedicated to Keynesians of all stripes:
“As a dog returneth to his vomit, so a fool returneth to his folly.” Psalm 26:11.
Alan Blinder returneth with his July 8, 2013 Wall Street Journal editorial “The Economy Needs More Spending Now: U.S. growth would be more robust if we didn’t confuse short-term stimulus with long-term reform.” The argument, which is intended to highlight the urgent need for even more fiscal stimulus of the increased spending type as opposed to tax reductions, instead highlights the what Robert Solow identified as the “major weakness of core macroeconomics,” a “lack of coupling between the short-run picture and the long-run picture” (quoted by Roger Garrison in the “Foreward” to the Hayek-Keynes debate-Lessons for Current Business Cycle Research, iii). Garrison goes on to argue that it is Hayek (and the Austrians) that provide the coupling.
For an Austrian argument on a coupled path to recovery – shrinking government involvement in the economy by lower spending, lower taxes, and reducing regime uncertainty which is supported by recent research on ‘multipliers,’ see “Stopping the Keynesian Death March.” Elsewhere, Steve Kates explains the fundamental error of analysis based on aggregate demand, the foundation of Keynesian short-run thinking.
A dog or a fool? You decide
