Sandy, Keynes and war

I recently watched this 2-hours-long sort-of-debate between Krugman and Stiglitz that I strongly recommend (particularly the discussion about the economics of public health, at about min.55): http://economistsview.typepad.com/economistsview/2012/10/video-krugman-and-stiglitz.html

 

At some point, I think it was Krugman talks about the Great Depression and how WWII helped to overcome the crisis. That reminded me of a classical discussion when someone argues “it wasn’t Keynes that brought us out of the crisis, it was war!!”. A clear evidence of how far some people are from understanding anything about economics… For those who have common sense: of course it was war… and of course it was keynesianism too!! Because, what is it war -from a macroeconomic point of view- but a massive fiscal expansion? What makes us different is that, while some of us prefer keynesian expansions to be invested in hospitals, railroads, universities and research, the only kind of keynesianism that some others accept is war. Indeed, for some reason that kind of keynesianism really makes them feel excited about -horny, I would say.

 

Today this great webpage Economist’s view linkes another brilliant article. Indeed, I believe the title of David Callahan’s article is one of the best arguments I’ve heard supporting government intervention in the economy: “Why should government respond differently to natural vs. economic disasters?”. “In the wake of Hurricane Sandy, you won’t hear public officials saying that devastated towns should pull themselves up by their bootstraps. Why is it so controversial that we should also lend a helping hand during man-made economic disasters?”. Indeed, I guess Mitt Romney didn’t think governments should intervene in case of natural disasters either when he planned to dismantle the Federal Emergency Management Agency, FEMA. Now his brilliant idea might guarantee Obama’s reelection. A victory for those who believe there is rationale for governments to intervene for reasons beyond going to war.

Revista de prensa (marzo 2012)

Dado que entre as clases, a tese e a recente paternidade non é que me sobre o tempo últimamente para falar da situación económica, sempre se pode facer un par de recomendacións de lectura imprescindible nos blogues que afortunadamente tanto abundan por internet para saber algo máis de economía. Déixovos un par de recomendacións para ler de vagar:

 

 

  • Bradford De Long, “Recent things worth noting” (english). De Long resume nun artigo tres das súas principais aportacións no blogue para explicar de maneira sinxela os fundamentos da política fiscal e o multiplicador do gasto público. Tres leccións para entender como funcionan (e moi importante, cando debemos agardar que funcionen e cando non) as políticas expansivas de gasto público (a.k.a. keynesianas).

 

  • Cesar Molinas, “Dar sentido a las reformas” (español). Molinas ven de rematar unha excelente colaboración de catro artigos para o sumplemento de economía dominical en El País e recollidos polo blogue de FEDEA onde avoga por unha serie de elementos que as reformas a implementar na economía española deberían ter en conta. Non concordo con todo o que propón, pero a lectura dos catro artigos é un exercicio de pedagoxía económica impagable. Recomendo particularmente os artigos “España capital Madrid” e “I+D+E+i+e”.