Plain Sense Economics

If we can peel away the political posturing, there is an important argument in the issue of how best to generate a recovery in our country’s economy. Put simply, the question is whether producers (employers) are the answer and we should do everything we can to encourage them, or whether we should do something to [...]

Freidrich Hayek and the Austrian school of economic policy argue for a laissez faire approach to the economy – emphasizing individual actions and criticizing government intervention. John Maynard Keynes acknowledged that economies could, over time, correct themselves, but argued that government had a responsibility to intervene and stimulate demand when the economy is in a [...]

With a hat tip to Economix for this reference, economics staff at the Federal Reserve District Bank in Dallas have compared employment, unemployment and related measures in our current recession to those of earlier recessions and depressions. Here is an important, chilling graph from the report. One consolation is that later graphs show that the [...]

Paul Krugman writes in The New York Times today :
Suddenly, everything old is New Deal again. Reagan is out; F.D.R. is in. Still, how much guidance does the Roosevelt era really offer for today’s world? The answer is, a lot. But Barack Obama should learn from F.D.R.’s failures as well as from his achievements: the [...]

Greg Mankiw published this article in the October 26 New York Times. From the opening few paragraphs -

But when Olivier Blanchard, the I.M.F.’s chief economist, was asked about the possibility of the world sinking into another Great Depression, he reassuringly replied that the chance was “nearly nil.” He added, “We’ve learned a few things in [...]