What went wrong and how to fix it.

January 12, 2013 1:54 PM

Stimulus or Stymied?: The Macroeconomics of Recession: An American Economic Association panel discussion on the Great Recession between four leading economists - Paul Krugman (Princeton), Valerie Ramey (UCSD), Harald Uhlig (Chicago) and Carlo Cottarelli (IMF), chaired by Brad DeLong (Berkeley).
posted by moorooka (9 comments total)

Not the nicest formatting of slides and transcript, but interesting nevertheless.
posted by moorooka at 1:58 PM on January 12

No mention of the words crime, prison, jail or punish. TL;DR.

Obviously this is just propaganda.
posted by MikeWarot at 6:17 PM on January 12 [2 favorites]

Matthew Yglesias was there:

The final session of the American Economics Association conference I attended was a very popular throwdown between Paul Krugman and UCSD's Valerie Ramey on the subject of fiscal stimulus.

It was, I thought, a frustrating affair that well summed up the dialogue of the deaf that proceeds in this debate.

My favorite part of the transcript:

DELONG: One thing I wanted to do with this session was to amuse myself and abuse my role as moderator by tormenting the panelists somewhat. I wanted to turn it into somewhat of a self-struggle session. That was why my fourth question asked how they had changed their minds on microeconomic issues over the past six years, and what they had changed their minds about. How did they think differently now than they did then? The only one who I heard give an answer to that was Paul Krugman....

KRUGMAN: Brad?

DELONG: Yes?

KRUGMAN: Since I already criticized myself can I spend a couple of minutes criticizing other people?

DELONG: Two minutes. Only two minutes.

A couple of brief Yglesias posts, one on a macroeconomist who's changed his mind, and one who hasn't:

Narayana Kocherlakota Is a Hero of Rigor and Honesty that Policymakers Need to Learn From

Jeffrey Lacker, a Man Who Never Changes His Mind No Matter How Often He's Wrong
posted by russilwvong at 9:24 PM on January 12 [1 favorite]

MikeWarot: this argument isn't about what caused the crisis, it's about what to do about it. It's the debate over fiscal stimulus.
posted by russilwvong at 9:25 PM on January 12 [1 favorite]

RussilWVong: If the root causes of the crisis haven't been addressed (and they haven't), it can't be fixed.
posted by MikeWarot at 9:40 PM on January 12

I love Brad De Long's blog.
posted by professor plum with a rope at 10:07 PM on January 12

No mention of the words crime, prison, jail or punish. TL;DR.

My suspicion is that few of the bad actors actually broke the law, so the old round-em-up approach would only address a small subset of what you identify as the root cause of our collective economic problems. I know that due process can sometimes be a drag, but that's civil society for you.

Obviously this is just propaganda.

I'm always skeptical when someone says that anything is obvious about such a complicated topic, especially the root causes.
posted by Edgewise at 12:23 AM on January 13 [2 favorites]

RussilWVong: If the root causes of the crisis haven't been addressed (and they haven't), it can't be fixed.

The root cause was that a recession happened, people stopped paying their mortgages and banks were over-leveraged, which meant that they didn't have the money to lend, which caused a cascade of deflation which made the recession worse. There isn't much to fix about that.
posted by gjc at 8:15 AM on January 13

To use the forest fire analogy from another thread, this debate is about how to put out (or otherwise deal with) the fire, not how to tend the forest in the future to keep it from happening again or what to do about the people that lit it.
posted by VTX at 8:49 AM on January 13