The eminent Robert Skidelsky identifies three groups of economists who gave what ex post was clearly bad advice, and bad advice that mattered about fiscal policy, from 2009 on: Alberto Alesina and company with their “expansionary austerity” doctrines, Ken Rogoff and company with their “short-term-pain-for-long-run-gain” doctrines, and Ricardo Haussman and company with the “no choice but austerity” doctrines. All three groups, however, had reasons for their arguments and were thinking hard—albeit, in my view, not as hard and as deeply as they ought to have and had a responsibility to do—and genuinely believed what they were putting forward. There were also three groups of economists giving bad advice who either did not believe what they were saying or had done no thinking at all: Robert Lucas and company with his “nothing to apply a multiplier to” ideological and unfounded claims that fiscal policy could never be effective; John Taylor, Marvin Goodfriend, and company with their Bernanke’s monetary expansion will produce currency debasement and inflation but will not boost employment; and a whole host of professional Republicans who ought to have been backing up Bernanke’s plans for further monetary stimulus and his call for an end to fiscal austerity headwinds, but were instead very quiet, as Elmer Fudd would say, in part at least not to annoy political masters in the Republican Party. I think the economics profession could have played a useful role in helping to manage the recovery if those three groups unmentioned by Skidelsky had not been present....WCEG — The Equitablog
Should-Read: Robert Skidelsky: The Advanced Economies’ Lost Decade
Brad DeLong
