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The Beginning of the End?

OBR Unemployment Rate Forecast
OBR Unemployment Rate Forecast. Source: OBR

What’s the appropriate name for progressives complaining about the “wrong sort of growth”… sado-Keynesians?  “Economic recovery is based on repeating the sins of the past” …  “We’re back in the old growth model” etc, etc.  Some things are said best by Paul Krugman:

PAUL KRUGMAN: Everybody wants economics to be a morality play. Everybody wants it to be a tale of sin and excess, and then the punishment for sin.

And this notion that we had a bubble, we had runaway stuff, we had bankers run wild, therefore, the economy must suffer a sustained slump, and anything you do to mitigate that is somehow enabling the sin and we will pay for it, that’s …

PAUL SOLMAN: Even though there were sins?

PAUL KRUGMAN: Even though there were sins. But economics is not a morality play. There is nothing about the fact that bankers made bad loans in 2005 that says that ordinary workers should be out of work in the year 2013.

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Categories: Data
  1. James in London
    December 6, 2013 at 07:09 | #1

    Good news indeed. The main risk with such optimistic forecasts is that policy will tighten too early and abort the recovery. We will have to be on our guard against old men coming out of the woodwork and starting to talk about taking away the punch bowls.

    • December 6, 2013 at 11:00 | #2

      Definitely! And I wish it was just the “old men” who want to use macro policy to fight bubbles, lower consumption, and keep house prices low. :(

      • James in London
        December 6, 2013 at 12:08 | #3

        Didn’t Scott Sumner show that house prices rise less fast when NGDP is growing nicely?

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