Pumping Bilge

clipped from mises.org This past Sunday's Washington Post proclaims that almost all economists agree that even a flawed package is better than none and time is of the essence![1] Unfortunately, much of the policy advice offered recently by commentators, including many economists, is shockingly superficial. It is reminiscent of the simple prime-the-pump ideas of the early Keynes and does not acknowledge Keynes's own cautions and qualifications after the General Theory was published, especially in his advisory work for the UK Treasury in the 1940s. As a microeconomist, however, I wish to emphasize the resource-allocation issues that characterize both the current situation and its underlying causes. I do this because the macroeconomic way of thinking typically ignores all this. In doing so, it ignores the complexity of our system and generates policies that will not bring lasting recovery.