Skidelsky argues, quite correctly in my view, that economists have become far too inward-looking; they study models, and forget (or never knew) that these are only sketch maps of the territory, and that you always have to consider the possibility that the map is all wrong — which means that you need to supplement technical training with history, psychology, and just plain looking out there at the real world.
But his prime examples of economics malfeasance are, well, terrible:
Policymakers don’t know what to do. They press the usual (and unusual) levers and nothing happens. Quantitative easing was supposed to bring inflation “back to target.” It didn’t. Fiscal contraction was supposed to restore confidence. It didn’t.
“Supposed to” according to whom? Not basic macroeconomics!
Much of macroeconomic theory is stupid shit. But that does not mean that all stupid shit is macroeconomic theory. So it is pretty tiring to see the pearl clutching virgins express such surprise (!) that QE did not do much. Shock – frickin – er. And Krugman is definitely right to assert that this is a pattern. Fake neanderthal monetarists (hat tip Mike Feroli) were the worst, but they had plenty of company.
Macroeconomic theory has enough to account for without pretending that it failed in a prediction it did not even offer. Faith in QE was more about sucking up to authority and the post hoc ergo propter hoc fallacy than it was about anything intellectual. I found watching that whole episode kind of depressing. People are sheep — even those blessed with high IQs.
Same for h money, although it may take a while for that to become obvious. There is not much chance of it being implemented soon, so it can’t really be falsified like QE has been.
No more aid
to from Israel
Israel totally against international aid now. No more Mister Nice Guy or net contributor to rest of world.
I guess the Kiwis must be totally devastated to be so distanced from Israel, losing that critical ambassador and all. Who will now tell them where Israel is? And what about the crucial trade and security relations?
Speaking of US aid to Israel
This bit of propaganda from the “liberal” Washington Post was par.
To be clear, it’s not that a Trump administration will not try to advance U.S. interests in the world. It’s just that the values portion of U.S. interests — human rights, democracy promotion, economic development, the free exchange of goods and services — will be at the bottom of the queue.* In a world of ascendant populist nationalism it’s going to be an awful time for small-l liberals.
So this is what US aid to Israel has been about? Human rights, democracy promotion and fee exchange of goods and services?
Alas Camelot is over. All that past stuff about the US promoting human rights, democracy and free exchange will be totally over under Trump. Such a yuuuuuge shift coming. No more Mister Nice Guy from USA either.