I've been reading a lot of Paul Krugman of late, trying to see what sense I can make of the economic crisis. I took a few economic courses in grad school, and did well in them and found them rather fascinating, but economics, it seems to me, is a bad spectator sport. It's not an easy thing to understand, period - but especially if you, like me, are gleaning your economics knowledge from the occasional newspaper article (or 60 second story on ABC News). That's why I'm really liking Krugman.
His blog can be a bit challenging at times (we haven't been challenged in 8 years), but his articles are great even for people like me. To wit, his latest on what needs to be done for the economic recover. It's long, read it all:
As readers may have gathered, I believe not only that we're living in a new era of depression economics, but also that John Maynard Keynes—the economist who made sense of the Great Depression—is now more relevant than ever. Keynes concluded his masterwork, The General Theory of Employment, Interest and Money, with a famous disquisition on the importance of economic ideas: "Soon or late, it is ideas, not vested interests, which are dangerous for good or evil."PS Krugman also taught me a new word today, "disquisition":
We can argue about whether that's always true, but in times like these, it definitely is. The quintessential economic sentence is supposed to be "There is no free lunch"; it says that there are limited resources, that to have more of one thing you must accept less of another, that there is no gain without pain. Depression economics, however, is the study of situations where there is a free lunch, if we can only figure out how to get our hands on it, because there are unemployed resources that could be put to work. The true scarcity in Keynes's world—and ours—was therefore not of resources, or even of virtue, but of understanding.
We will not achieve the understanding we need, however, unless we are willing to think clearly about our problems and to follow those thoughts wherever they lead. Some people say that our economic problems are structural, with no quick cure available; but I believe that the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men.
A formal discourse on a subject, often in writing.
