Tuesday, January 3, 2012

- The School Of Short-Term-Ism

Broadly speaking, you can think of the two dominant economic schools this way:

Keynesians practice the art of the short term. It's advocates think (and generally talk) only of the first and most direct effect of any policy and any other effects are thought of as something that happens way off in the mists of the future - where some other equally omniscient being like them will address them as if they were 'primary' effects.

Austrian Economists are the ultimate long term thinkers. The Austrian school is the only one that will be correct about absolutely everything it predicts... eventually. But it's so naturally far sighted a discipline and it's so focused on the visible endpoint, that although it can say absolutely whether a thing will happen, it can't possibly say when.

This tells you something about the people who advocate for each of these schools as well. Austrians tend to toward Apocalyptic (over a long enough time line everyone's survival rate falls to zero), while Keynesians tend to always choose to have another drink - and hangover or for that matter the drive home be damned. Austrians choose early mornings and exercise even though it feels bad, and Keynesians choose Sweet Tea Vodka in big gulp cups (and in your case probably a Roofie) because they feel so good.

Get a room full of Economists drunk, and by about 3AM, they all start sounding like Paul Krugman. Krugman's particular poison is 'power and influence'. That's what he's really after. It's no secret that he goes to sleep at night dreaming of a world where Economists dictate the actions of the masses following a grand plan that only they can fathom. Good idea - bad idea ... Krugman doesn't care. So long as it's his idea, and everyone is commanded to follow it, until he changes his mind.

If you imagine that the difference between these two schools of thought should be evident to anyone with a Nobel prize in economics, then I personally would agree with you. But if you believe that, then the only conclusion you can come to is that Paul Krugman must be more interested in spreading shadow than light. Actually, he's probably interested in spreading anything at all so long as it leads to greater influence for him. Thankfully for the rest of us, he thinks the New York Times and it's collapsing readership is a path to that power.

The simple fact is, if you still take him seriously as a thinker or writer, then you either have something in common with him, or you are a useful idiot for him. You are either passing out the roofies, or slugging them down.

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