[lbo-talk] Steve Forbes lashes out against Keynesian economics: "the whole idea of macroeconomics is a fraud" - Forbes.com

Max Sawicky sawicky at verizon.net
Wed Jan 5 17:20:15 PST 2011


Evidently he doesn't understand the difference between macroeconomics and basic national income accounting.

On Wed, Jan 5, 2011 at 6:45 PM, fernando cassia <fcassia at gmail.com> wrote:


> Copernican Revolution Coming to Economics - Forbes.com
>
> http://www.forbes.com/forbes/2011/0117/opinions-steve-forbes-fact-comment-copernican-economics.html?partner=mostcommented
>
> "Countless other absurdities abound in the way we are taught economics.
> Take, for instance, the Keynesian notion of "aggregate demand," the idea
> that we can measure the total demands of consumers the way we can the number
> of gallons of gas in an automobile. It's one thing to count how many iPads
> or PCs we buy but quite another to think that a single number can truly sum
> up how an economy does as a whole. Quality goes by the boards.
>
> The old Soviet Union turned out industrial product that was mostly subgrade
> or pure junk. But all this outdated industrial garbage was given a monetary
> number by Soviet economists and planners; thus the Soviet economy looked
> like it was turning in a pretty good performance. GDP numbers couldn't tell
> the difference between East Germany's clunky, junky Trabant and West
> Germany's Volkswagen. Thus, from the early 1960s through the mid-1980s,
> Nobel Prize-winning economist Paul Samuelson could proclaim in his once
> ubiquitous textbook, Economics: An Introductory Analysis (McGraw-Hill,
> 1948), that the U.S.S.R.'s economy would surpass that of the U.S.
>
> Because we had faith in the notion that the actions of the 300 million-plus
> people in this country--or any country--can be tidily summed up in a single
> number, we accepted an inflated estimate of the communist economies'
> strength during the Cold War.
>
> Put more simply, the whole idea of macroeconomics is a fraud"
>
> (Full story at URL above).
>
> FC
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>



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