I spent
four years in the early 1970s getting an MPhil or ABD in economics. My timing was fortunate because I was the
beneficiary of all of the research done on the Great Depression and the
refinements and analysis of this research over the next 20 years. Basically this was the creation of
macroeconomics as a legitimate discipline within the field of economics. In The General
Theory of Employment, Interest and Money, John Maynard Keynes was the first
to formulate a unified macroeconomic theory, and this served as the foundation
for what came after: explication, testing, and expansion of Keynes’s theory. Paul Krugman’s new book, End This Depression Now, written in February 2012, applies the lessons
learned from the 1930s to our current depression. It is brilliant. Read it.
I can’t imagine a clearer or more persuasive explanation of our current
situation and what we can do to get out of it and start growing again. The kernel of his argument is that yes, we do
have a spending problem, too little spending.
The time to worry about debt is in good times, not in depressions. I haven’t the will or the skill to summarize
his arguments, but if you will go explore them yourself, I can promise you an
enjoyable read. He’s a brilliant and
engaging writer, and, if you get the recorded version as I did, it is
beautifully read by Rob Shapiro. Some
gems along the way are The Capitol Hill Baby Sitting Coop (a real thing that
makes a convincing macroeconomic model), Krugman’s mention that Keynes’s work
appeared on a list of the ten most harmful books of all time, and his
discussion of “Austerity and the Confidence Fairy.” If
only we could get Boehner and Cantor to read this book – and Obama. He should have listened to Christina Romer. 2012
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