Changed Initials Edition (Mark Schmitt & Rich Lowry)

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M.S. had a breakthrough today: why exactly does Krugman claim to know the effects of a given magnitude of "stimulus?" Answer: scientistic fallacy.

In fact, in the case discussed, the very measures which the dominant "macro-economic" theory has recommended as a remedy for unemployment, namely the increase of aggregate demand, have become a cause of a very extensive misallocation of resources which is likely to make later large-scale unemployment inevitable. The continuous injection of additional amounts of money at points of the economic system where it creates a temporary demand which must cease when the increase of the quantity of money stops or slows down

Hey, whatever happened to the housing market since that super-stimulative tax credit ended?



Oops, just another Keynesian blip.