A NYT article describes a reporter’s interpretation of the free-market oriented views of Glenn Hubbard with the proto-Keynesian views of Larry Summers.
As for the latter:
“…many of Summers’s papers explored the reasons markets aren’t always perfectly efficient.”
So, anyone that really believes there is academic merit in trying to prove ANYTHING is not “always perfectly efficient”; raise your hands!!! It is symptomatic of a so-called intellectual to be surprised when the real world does NOT comport with their models.
In all events, such a benchmark clearly tends to lead to criticizing markets for failing to do the impossible & also invites foolish suggestions about how politicians & bureaucrats can make them better!
Among Larry’s doltish remarks:
“But this needs to be done in a balanced way. The highest priority is getting the economy growing.” Summers said that he expected the government debt to grow, because the cost of services that the government pays for — like education and health care — are rising far faster than many of those bought in the private sector.
(I remember choking when then-Senator Phil Gramm replied in his inimitable Southern drawl to a query about Summers’ confirmation hearing: “…he is real smoart goay”!?!)
First, it is true that there are ways to get the economy to grow. The question is whether the policies that Summers prescribes actually help or hinder! Look to Japan for a hint. Despite nearly 2 decades of continual deficits, zero-interest rates & massive injections of liquidity, Japan’s economy remains moribund.
Instead of declaring defeat, the case of Japan has been a source of delusional denial of the failure of “stimulus” policies!
Second, it does not seem occur to him that costs of services (health & education) are rising BECAUSE governments provide them!?! And that cost-containment is something that most governments at all levels have a terrible track record.
If there is truth in the expression that “insanity involves doing the same thing over & over while expecting different results”, perhaps Keynesian practitioners might rightly be consigned to an asylum…?