Wednesday, December 24, 2014

Libertarian Cochrane vs. Keynesian Baker

Looks like this libertarian Cochrane guy took a shot at "Keynesians" the other day in a WSJ op-ed and now "Keynesians" are all up in arms in defense.

Here is a link to Cochrane's thing at CATO.

Here is a link to Dean Baker's response at CEPR.

This from Baker:
He sees the U.K.’s turn to austerity as a brilliant success; and the continued U.S. growth, in spite of deficit reduction, as further proof of the failures of Keynesian economics.
This is interesting from Baker here because if you CTRL-F Cochrane's article for the character string "deficit", it does not yield a result.

Let me translate:  Cochrane NEVER mentions "the deficit".

What is going on with this "Keynesian" obsession with "the deficit"?

Its like Baker is trying to refute the assertion that if savings are reduced within a period of time, it could very easily coincide with increased domestic economic activity over that same time period.

(btw this is probably a point related to savings that libertarian Cochrane probably cannot even comprehend)

Within the context of "libertarians" vs. "Keynesians", imo libertarian Cochrane makes some pretty good points of argument against some perhaps typical "Keynesian" reasonings and Baker simply can't do a very good job refuting them.

1 comment:

Six said...

Cochrane is a moron. He claims the US didn't suffer a recession at the end of WW2. In fact, the US had negative growth 4 out of 5 years following WW2. He's counting on his readers lacking the critical thinking skills to dissect his "arguments". The entire essay is nonsense.