Secondary commentaries were:
Brad DeLong
Justin Fox
Scott Sumner
James Kwak
Arnold Kling
Andrew Samwick
Noam Scheiber
David Warsh
Don Marron
Diane Lim Rogers
Mark Thoma
Andrew Leonard
I hope to add other reference on the above authors later to help give context of their background and how it might relate to their criticism.
But, in my opinion, the most helpful commentary might of been from a user post on the WSJ article. I'm adding the comment below as posted on WSJ - just in case it gets lost. Underneath it, I'll give supporting url references that they mention.
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Oh where oh where to begin re: Dr. Bubble Paul Krugman’s latest praise for the Keynesian snake oil…
1. Dr. Bubble says, “Keynes did not, despite what you may have heard, want the government to run the economy. He described his analysis in his 1936 masterwork, “The General Theory of Employment, Interest and Money,” as “moderately conservative in its implications.” While I’m not aware of this particular quote, I am aware of the following quote from Sept 7, 1936 in the prologue to the German edition of The General Theory in which Keynes said his theories were “more easily adapted to the conditions of a totalitarian state.”2. Dr. Bubble says, “The General Theory” is a work of profound, deep analysis — analysis that persuaded the best young economists of the day.”
While there’s no doubt that some of the best young economists of the day were persuaded, it doesn’t mean Keynesian economics was, or is, correct.Moreover, for those familiar w/ Professor Haberler’s “Prosperity and Depression,” first published in 1937, there was considerable debate at that time and many of Keynes’ errors & fallacies were immediately exposed. It is laughable to say “The General Theory” is somehow “profound, deep analysis”.
As Paul Samuelson himself put it, “It is a badly written book, poorly organized; any layman who, beguiled by the author’s previous reputation, bought the book was cheated of his 5 shillings. It is not well suited for classroom use. It is arrogant, bad-tempered, polemical, and not overly generous in its acknowledgments. It abounds in mares’ nests and confusions… In short, it is a work of genius.”The fact that Samuelson was persuaded, and quickly incorporated this nonsense into the most widely used economics textbooks in America’s “best” schools, means only that we now have a lot of very confused people, including Dr. Bubble and Brad DeLong.
3. Note that I included Samuelson’s last sentence, “In short, it is a work of genius.” While I reject “The General Theory,” I at least attempt to be fair to it. Now note Dr. Bubble’s deliberate distortion of Schumpeter. Does anyone really believe Schumpeter thought “whatever happens in a market economy must be right?”4. I often wonder if Kosinkski conjured up the character Chauncey Gardner, for the book & film “Being There,” after attempting to read “The General Theory.” The fact that Keynesian economics is devoid of a capital theory should, by itself, confirm the theory lacks “depth” and it also explains why “The General Theory” prescribes simplistic Chauncey Gardner-like policies such as Govt borrowing mountains of fiat
And this is where Dr. Bubble expressly states the root problem of Keynesian dogma, “And he called for active government intervention — printing more money and, if necessary, spending heavily on public works — to fight unemployment during slumps.”
money, printed out of thin air by the central bank, and spent digging holes. Could one possibly advocate a more insane economic policy than this?Because Keynes had no capital theory, as Hayek pointed out & Keynes himself admitted, Keynes believed “printing more money” out of thin air by central banks is neutral because S = I.
As Professor Jesus Huerta de Soto explains:“Keynesians hold no theory to explain why crises recur in a hampered market economy that suffers credit expansion (that is, one in which traditional legal principles are violated). Keynesians simply attribute crises to sudden halts in investment demand, interruptions caused by irrational behavior on the part of entrepreneurs or by an unexpected loss of confidence and optimism on the part of economic agents.
For those attempting to detox from the Keynesian snake oil, I recommend this four step reading ‘program’ to assist your recovery to sanity:
Moreover Keynesians neglect to recognize in their analyses that crises are an ENDOGENOUS consequence of the very credit expansion process which first feeds the boom. Unlike their fellow macroeconomists, the monetarists, Keynesians believe the results of monetary expansion policies to be relatively less effective and important than those of fiscal policy, and they advocate public spending as a means to directly
increase effective demand. They fail to comprehend that such a policy further complicates the process by which the productive structure readjusts, and it worsens the outlook for the stages furthest from consumption.”1. Henry Hazlitt’s 1959 classic, “The Failure of the ‘New Economics’” in which he dismantles Keynes’ “mare’s nests and confusions” line by line.
2. Roger Garrison’s “Time and Money: The Macroeconomics of Capital Structure.”3. Jesus Huerta de Soto’s “Money, Bank Credit and Economic Cycles.”
4. John B Taylor’s book, “Getting Off Track” as it demonstrates precisely how the inherently unstable fractional reserve / central bank monetary operating model (described in de Soto’s book) wrecks havoc in the real world.All of these books are, of course, built primarily on the work of Menger, Bohm-Bawerk, Mises, Hayek & Rothbard.
Jesús_Huerta_de_Soto
New Resources As I Find Them
Not So Fast! Krugman Also Gets It Wrong - Paul Krugman is Wrong About John Maynard Keynes
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