Here is a post about conventional wisdom from Paul Krugman.
The piece suggests that closeness to “very serious people” is stifling for the individual mind. I think it is worse than that: being a very serious person is also stifling. There is a particular kind of stupidity exhibited by intelligent and powerful people that comes from a lack of challenge. We cannot constantly re-examine all of our assumptions without outside help. If you are intelligent and powerful then you are unlikely to spend enough time with people who are sufficiently focussed on your area of expertise to have a good understanding and sufficiently unawed by your standing to have your dafter beliefs seriously challenged. And this is especially true of beliefs that are peripheral to your reasons for being a very serious person (hence the spectacle of Nobel laureates talking nonsense outside their own fields).
"That’s why Keynes facetiously proposed burying bottles full of cash in coal mines, so people could dig them up again: since any proposal to spend money on things we need got shot down on grounds of prudence and efficiency, he proposed completely pointless spending instead." I'm very suspicious of PK. I'm not an expert on JMK but I'm pretty sure that he is here advocating digging up bottles which had previously been stored… however in the US and UK, nobody bothered to bury any in the first place when times were better. JMK, I believe, stated in 1940 that the war should be financed by higher tax / compulsory saving rather than deficit spending, on the grounds that the latter would lead to inflation. PK and others' interpretation of JMK is often highly selective.
Yo!,1. Who cares what JMK said — it's what modern Keynesians say that is interesting.2. This quotation is not about storing money in good times. As far as I understand it, it is about two things: monetary stimulus and the consumption multiplier. Burying money in the ground is similar to throwing it out of helicopters — Ben Bernanke's facetious answer to a deflation problem. Burying money would be even better than the helicopter approach, however, because workers would be employed to mine it, which would mean a good portion of it would get into the hands of people who would spend it — which would grow the economy though the multiplier effect.3. I find Paul Krugman to be an extremely clear thinker and very useful through the financial crisis. I have not found a good blog that tends to take the opposite view from him.Yo!,