Megan McArdle says (correctly) that no one knows, and anyone who tells you that they do is lying or fooling themselves, but that what you were taught in school is almost certainly wrong. She also notes (again correctly) that there was a lot more to the New Deal than simply government spending (which likely didn’t have much stimulative effect), some of it good, much of it disastrous (particularly the artificial propping up of wages and prices by fiat).
One can’t run controlled experiments in economics, so we can never know for sure, but I’m inclined to at least go with economic theories that make sense and for which there is useful empirical evidence. Someone has to tell me what Hayek and von Mises got wrong to persuade me that Keynes is right. And most people who think that Keynes is right haven’t even read them.
[Update a few minutes later]
“Mr. Obama, give back my wallet.”
[Update a while later]
OK, so I’m not as impressed with David Brooks as the intelligentsia want me to be, but he does have some good thoughts occasionally:
The correct position is the one held by self-loathing intellectuals, like Isaiah Berlin, Edmund Burke, James Madison, Michael Oakeshott and others. These were pointy heads who understood the limits of what pointy heads can know. The phrase for this outlook is epistemological modesty, which would make a fine vanity license plate.
The idea is that the world is too complex for us to know, and therefore policies should be designed that take account of our ignorance.
What the world needs now is not love sweet love, but epistemological modesty. Particularly inside the Beltway. Unfortunately, the perverse nature of humanity is that often the less one knows about something, the more certain one is in his knowledge. They have never learned from the ancient Greeks that to admit the limits of your knowledge is the beginning of wisdom.
[Via Manzi, who reads David Brooks so I don’t have to]
[Late morning update]
Are we going to emulate Japan’s lost decade? It seems to be what they want to do, unfortunately.
[Update a couple minutes later]
Renters are angry. They should be. They’ll probably join the tea party, too.
And here’s a novel concept: let housing prices find their clearing price. Can’t do that — it makes too much sense.