The Silly Will Always Be With Us
In a fit of amazing stupidity, Kartik Athreya, a PhD economist at the Federal Reserve Bank of Richmond wrote an open letter and posted it on the bank’s web site complaining that macro economics is too complicated for “the common people” to understand and that bloggers don’t know what they are talking about.
After it was discovered by serious people at the bank, it was taken down, but they failed to understand that having attracted the attention of bloggers with an attack on people such as Paul Krugman, the the Kartik Athreys letter had already been archived, and those insulted began to respond.
Numerian at The Agonist wrote a rebuke of the condescending tone of the letter is Send in the Clowns, while Fred Clark at The Slacktivist chose Biblical snark for Rendering unto Krugman.
Fred cuts to the chase – we know what worked the last time, so why are we wasting time talking about policies that clearly failed?
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There are two laws of economics that everybody should memorize. They’re called Brad Delong’s Laws of Economics, because economist Brad Delong ruefully formulated them upon finding out that, once again, his disagreement with a certain other economist ended up with him being wrong and the other economist being right. So, without further ado, Delong’s Laws of Economics:
1) Paul Krugman is right.
2) If your analysis leads you to conclude that Paul Krugman is wrong, refer to rule #1.
.
Needless to say, Kartik Athreya’s analysis violates rule #2. That is all :).
– Badtux the Economics Penguin
PS: In the post where Delong disagreed with Krugman and formulated these laws, he was wrong and Krugman was right — the bank bailout *was* a woefully inadequate band-aid. Now that we’re 16 months down the road, we find that these laws of economics still hold true :).