The world probably would have been much better off had macroeconomics never been devised. Although I have in mind Keynesian macroeconomics above all, I include other types of macro models as well. I even include, somewhat reluctantly, the whole quantity theory approach descended from David Hume to the Friedmanites, now known as monetarism.

Yesterday’s Wall Street Journal had a nice short summary of how bad housing policy over several administrations misdirected greed (self interest or prudence) into actions by private actors that created the bad paper underlying the financial crisis. Unfortunately the authors, Gramm and Solon, greatly understate the role of the Fed in this calamity. My letter to the editors of the WSJ.

Dear Editor:

Peter Boettke highlights more nonsense from Paul Krugman. Krugman again demonstrates a complete lack of appreciation for and understanding of Hayek’s (and Mises’s) significant contributions to what is now called macroeconomics.

Rogoff was previously chief economist at the International Monetary Fund and now teaches at Harvard. He is a Republican.

Democrats criticized his 1985 paper recommending that the Fed keep inflation low and not try to influence employment.

They also didn’t like it when he told Harvard Magazine, after the Crash of 2008: “We borrowed too much, we screwed up, so we’re going to fix it by borrowing more.”

In his column “Phony Fear Factor,” published in The New York Times on August 8, 2013, Paul Krugman mocks the view that “economic policy uncertainty” helps to explain the failure of the American economy to recover from the collapse of 2008. Unfortunately, Krugman displays little knowledge of the view he wishes to challenge. He says very little about it.

In the July 26, 2013 edition of the Bank Credit Analyst, editor Jim Grant notes that when Ben Bernanke was beginning the second round of “quantitative easing,” he described it in February 2011 Congressional testimony as equivalent to an interest rate cut. In recent Congressional testimony explaining what might be ( or might not be) a forthcoming “taper” in ” quantitative easing,” he suggested that it would not be equivalent to a rate hike.