Friday, December 21, 2012  Austerity, stimulus and doing nothing
"The economics profession advances by one confusing financial
disaster at a time. A series of 19th-century banking crises in
England and the United States inspired policy makers to create
the modern central bank. Then came the Great Depression, a
period of economic misery that existing ideas could not explain.
John Maynard Keynes and the far more libertarian Friedrich Hayek
spent the 1930s trying to make sense of the inexplicable
economic data. In the process, they developed the two schools of
thought that still dominate economic arguments. The Keynesians
overwhelmed public discussion in the United States and Britain
until the 1970s, when Hayek, along with Milton Friedman and his
Chicago school, became more popular.  By the 1990s, the debates
between these two radically different theories seemed to have
abated. Economists seemed to have accepted a consensus view of
the world, one in which the profession would provide
technocratic, nonideologica