Fancy Theorists of the World Unite

Paul Krugman
NYT

A number of people have pointed me to this remarkable editorial by Stephen Moore in the WSJ. What’s remarkable isn’t the views; it’s the all-out embrace of anti-intellectualism. It actually denounces “fancy theories” and rejects them because they “defy common sense”.

Gosh, if that’s the way the right is going, the next thing you know they’ll reject the theory of evolution. Oh, wait.

There’s a lot to critique here, if you have the stomach — among other things the question of what constitutes common sense. Some people find it commonsensical that if the government puts people to work, that adds to employment; it takes fancy arguments from the likes of the WSJ to convince them otherwise.

But the main thing I’d like to point out is that the past three years have in fact been a stunning confirmation of one fancy theory — namely, the theory of the liquidity trap, which is part of the broader construct of Keynesian economics.

(More here.)