Believe those who are seeking the truth. Doubt those who find it. Andre Gide


Sunday, September 18, 2011

This just in from Father Paul's pulpit





The slump in the United States and other advanced economies is the result of a failure of demand -- period, end of story. All attempts to claim that it is somehow structural, or maybe the result of reduced incentives to produce, have collapsed at first contact with the evidence. (link)

You've got to hand it to the man. He has the self-confidence of a Jesuit preacher who believes--really, truly believes in hell--and who fervently wants to share his revelation with us, the poor deprived masses. (Btw, doesn't a "failure of demand" also imply reduced incentives to produce?) I wonder what sort of reply he is expecting from this incredible statement?

Oh, I know, how about....Amen?

P.S. Forgive me Father Paul, for I have sinned. (I have committed the thought-crime of contemplating the possibility that this might not be the "end of the story"...am so ashamed; please prescribe penance.)

Update: This just in (thanks to the Arthurian). Guess he does have a sense of humor! 

11 comments:

  1. THAT title, and THAT picture? PERFECT together!

    ...and they say economists don't have a sense of humor.

    ReplyDelete
  2. Yeah, right down to the white collar! A lucky find...lol. (I certainly hope that he has a good sense of humor!)

    ReplyDelete
  3. Pretty good, I think.

    http://krugman.blogs.nytimes.com/2011/09/18/ive-never-actually-seen-the-resemblance/

    ReplyDelete
  4. What exactly is the point of this smear post? Can't you address his argument instead? What Krugman is saying is basically what any demand-oriented economist does.

    http://www.nytimes.com/2008/11/30/business/economy/30view.html

    ReplyDelete
  5. CL:

    I have addressed his "argument" many times. You must have missed it. See here, for example, http://andolfatto.blogspot.com/2010/12/deficient-demand-deflated-balloon.html

    And CL, shame on you. No self-respecting economist would ever say "end of story. period." That's a religious statement. And you appear to be a true believer.

    ReplyDelete
  6. No, that's just being provocative. It's however backed by evidence. Although you might disagree with it, it's certainly not a statement of faith.

    If it's not a demand issue, how do you explain that nonresidential business investment have grown without reducing unemployment?

    http://research.stlouisfed.org/fredgraph.png?g=2jJ

    By the way, can't you add Twitter comment option?

    ReplyDelete
  7. Oh, I see. He's only being provocative.

    Well then, I guess you do not literally believe, the way he "provocatively" suggests, that his view is the "end of the story, period." That is, you keep an open mind on the issue. Very well then.

    Your question about investment and unemployment comovement suggests that you believe that "deficient demand" is the only way one could possibly reconcile such behavior. Are you absolutely positive on this matter? Have you explored the implications of a wide class of models and arrived at this conclusion? Or are you simply comparing two silly models and concluding that one is better than the other?

    By the way, you may be interested in reading these posts by me:

    [1] http://andolfatto.blogspot.com/2010/12/deficient-demand-deflated-balloon.html

    [2] http://andolfatto.blogspot.com/2010/07/sticky-price-hypothesis-critique.html

    I would be interested to know what you think of these pieces and whether they give you any pause to think.

    By the way, I am not claiming that Krugman is wrong or that I know what the answers are. My view is that we should all display a lot more humility. We do not know as much as some think we do.

    Twitter comment option? I'll look into it. Thanks.

    ReplyDelete
  8. David,

    Don't you know that you are not allowed to be "provocative" by putting that picture up? Only Father Paul is allowed to be provocative. Period. End of story.

    ReplyDelete
  9. Hilarious.

    I suppose Rabbi Paul doesn't really work. And, I'm sure there are more than enough Catholic priests who preach hell fire and damnation though why you didn't choose Pastor Paul is question that intrigues me.

    As for the choice of Jesuits, the Jesuit priests I have chummed with and (raised socio-political hell) did not believe in hell. Any priest influenced by liberation theology is unlikely to believe in 'hell' in the original sense. Catholicism has long been invaded by secular humanists though most certainly deny that label.

    But Brother Paul is hardly unique. Take Robert Eisner. According to Professor Eisner, everything and anything positive in US macroeconomic time series were a function of deficit-financed spending. there might have been an issue with the econometrics, but hey, if you believe that hard, why let rigorous empirical analysis get in the way?

    ReplyDelete
  10. @westslope: Pastor Paul's Pulpit...brilliant! Next time. (lol)

    ReplyDelete
  11. As a retired systems wonk, I too find Krugman's end of story a bit too quick of an ending. I want to ask the "five whys" for each input and output of his system. And ask just how inclusive the input sources of his system are.

    ReplyDelete