The Great Debate: Who Saw it Coming? (Part 2)
Earlier this week I noted, tongue-firmly-in-cheek, that we’re all MMTers now, following Paul McCulley’s recommendation that we just declare victory. And be nice about it.
Well here is a strange post from Brad DeLong:
He proclaims that essentially anyone who is anyone is a Minskian. And apparently always was. That is why mainstream economists like “Paul Krugman, Paul Romer, Gary Gorton, Carmen Reinhart, Ken Rogoff, Raghuram Rajan, Larry Summers, Barry Eichengreen, Olivier Blanchard, and their peers” ought to be trusted.
They got it right and will get it right again!
I am following Paul McCulley’s advice and so must be nice. And I do like a lot of what Brad DeLong and Paul Krugman write—oh, maybe 90% of it. Alone among this bunch, however, only Rajan (so far as I know) saw the crisis coming. (And he was castigated for throwing cold water all over Ben Bernanke’s Great Moderation.) Indeed it would be very hard to find any single individual more responsible for fueling the hurricane of financial excess that led to the crisis than Mr. Summers. Next to Alan Greenspan, there probably has never been any economist in a position of responsibility who is more culpable for chronic bad decision-making.
And as I’ve said many times, the much celebrated book by Reinhart and Rogoff really should win an award as the worst empirical study ever undertaken. Clueless about Crisis should have been the title.