David Brooks is ever so polite as he expresses his doubts about the Neo-Keynesians call for a Third Stimulus, but there’s no question as to whom he is putting his genteel, moderate boot:
These Demand Siders have very high I.Q.’s, but they seem to be strangers to doubt and modesty. They have total faith in their models. But all schools of economic thought have taken their lumps over the past few years. Are you really willing to risk national insolvency on the basis of a model?
Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?
The Demand Siders don’t have a good explanation for the past two years.
No, they don’t. Nor will they have one for the next ten years. They’ll have an explanation all right – the bitter-end liquidationists didn’t let us spend enough money – but it won’t be a good one or a correct one.
UPDATE – And Krugman is forced to immediately start lying in response. “Funny, I thought we had a perfectly good explanation: severe downturn in demand from the financial crisis, and a stimulus which we warned from the beginning wasn’t nearly big enough. And as I’ve been trying to point out, events have strongly confirmed a demand-side view of the world.”
Krugman hopes we’ve all forgotten that he calculated a $600 billion stimulus was needed before the Obama administration championed the $787 billion stimulus passed by Congress.