Yeah, not so much, wingnuts. Please stop pretending you know anything about macroeconomics. It’s embarrassing to those of us who do.
That’s a compelling narrative. But it’s not the way Professor Sims sees himself, as he told me by phone late last week. (It doesn’t seem to be Professor Sargent’s view, either, but we had only a brief e-mail exchange.)
Professor Sims doesn’t want to be pigeonholed. “I’m not ‘non-Keynesian,’ ” he said, adding that he has been an active “promoter of new Keynesian macroeconomic models,” because they “are the place in our profession where theory and data and policy decision-making are coming together.”
“It doesn’t really make much sense to stand on the sidelines and take potshots at them,” he said. “If you don’t like the way they’re working, you should try to do better.”
He and Professor Sargent have been “trying to do empirical macroeconomics using formal tools of statistics,” he said. “Those tools aren’t in themselves ideological.”
Professor Sims spoke favorably of the Obama administration’s fiscal stimulus programs, which are Keynesian in their countercyclical spending. “An expansionary fiscal policy is probably what we need right now,” he said.
But he criticized traditional Keynesian thought for inadequacy in “the temporal dimension,” meaning that it didn’t focus on the consequences of running long-term deficits. “The implications of that for future stringency are very important,” he said. “Our current policy debates just aren’t doing it.”
Keynesians are completely aware of long-term deficits, which is why they believe in tightening the economy, cutting spending, and raising taxes when the economy is booming in order to head off inflation. So the heck with that theory at the end.
As someone who knows a bit on the subject as well, but also knows history, it’s remarkable that anyone listens to tinkle-down beLIEvers at this point, because they are abject failures in pretty much any fiscal measure.
What? Nuance? That’s ridiculous. Everyone knows that less spending and fewer taxes works in EVERY situation imaginable.