Brad DeLong just posted a very interesting Draft Henry George lecture. It contains ideas which I haven’t found written down before by Brad or by Krugman. I strongly recommend reading it (for one thing I don’t know how to cut and paste from it). People who have read the draft lecture are invited to read my thoughts after the jump (I can’t keep people who haven’t read it out, but comments which reveal ignorance of the lecture will be mocked ruthlessly).
update: I hereby ruthlessly mock myself for failing to provide the link.
What an idiot. That’s the problem with blogger.com it enables people incapable of handling html to post on the web.
So that was a nice lecture wasn’t it ? Much of it was new to me.
1) Brad confesses the reason for his lapsed Greenspanism.
I hadn’t seen the explanation that he opposed tight regulation of finance, because he thought the purpose of structured finance was to trick people into bearing more risk that they want to bear and that this is a good thing, since people are irrationally unwilling to bear risk.
Oh my not just Greenspanian but a Straussian believer in
noble welfare enhancing lies. I might have found the argument convincing in 2006, so I’m glad I didn’t read it.
2) Brad claims that fresh water economists have traction, are getting attention etc. I didn’t know that. I’d guess a lot of it is due to Paul Krugman who is arguing with them in public. Also, I mean, Nobel memorial laureates tend to get all the attention they want. However, Brad has an interesting theory. Republicans in power listen to economists who don’t sound crazy to them (and all non economists). Republicans in opposition use any rhetorical weapon to hand so any criticism of Obama however crazy it sounds to non economists is amplified by the vast right wing conspiracy. An interesting idea. Are fresh water economists really getting a hearing from non economists ? That’s a scary thought.
3) Brad notes the similarities between Herbert Hoover, Alan Greenspan and Job. Hoover and Greenspan have been very loyal to the pro market ideology. yet when trouble comes, people who should be their friends accuse them of being pinkos.
Now that is an excellent rhetorical weapon to hand.
Brad’s been writing about how Prescott has decided that the Great Depression was caused by the anti market policies of Herbert Hoover. He notes that for Prescott’s latest theory to make sense, one would have to argue that Hoover was more anti market than Roosevelt, Truman or Johnson (or any post WWII European socialist ever in power). Now to me, this is no more absurd than the average assertion by Prescott. But it seems to me much more striking to non economists. Usually Prescott uses mathematical terminology and so most people either have no clue as to what he is saying or assume that the clue they have must be misleading, because he couldn’t be claiming that (as he is). I’d say some documentation that Hoover was not a pinko is in order.
The similar claim that fresh water economists are saying that Greenspan over regulated is also interesting. I think documentation of that claim is in order. Then I’d go to Greenspan’s personal history as a disciple of Ayn Rand. I just found out that he was not just a fan from a distance but part of her tiny group. Rand was a very extreme ideologue and a very unpleasant person. Many on the right will not accept criticism of her. In a no holds barred rhetorical struggle, writing about Rand and Greenspan is likely to be an effective strategy.
Of course, I am not interested in rhetoric and think we should all seek the truth together assuming that all are sincere and well meaning, so I will have nothing to do with that. But someone less high minded and scrupulous than I would talk about Ayn Rand’s sex life as often as possible.
update: I am not suggesting that Brad is interested in using any rhetorical arm at hand. I’m sure he argues in good faith and presumes that others do as well until they prove otherwise.