This is a great article in the Washington Post from Steven Pearlstein, outlining how US conservatives are pretty much to opposed to everything that has happened, been discovered or been learned over the past hundred years or so. As he asks – what’s next, quantum physics?
In particular, he attacks what he calls the magical world of voodoo “economists” (the title of the article).
While this is an attack on Anglo-Saxon conservative politicians (many Tories are also fond of the trickle-down delusion), it also reminds me of what I don’t like about the Lib Dem conference agenda. My flabber is gasted that economics is not receiving much attention. Plenty of sessions on related topics, yes. But there is no clear voice saying that in addition to, say, bank reform and a green stimulus, basic economics itself needs a fresh look.
(I need to go through the agenda in detail. But my first pass looking specifically for economic matters produced little fruit.)
I’m not talking anything fancy here. Mostly that would be brushing off old ideas, catching up with the latest developments such as the macroeconomics of liquidity traps. In other words, the subjects that would appear to be described our current situation. I am no expert, but it only takes a little reading to understand that our national economic conversation is stuck in old ideas.
For instance, consider the Keynes vs. Hayek debate on Radio Four. You’d have thought nothing has happened in economics since the early 20th century. Channeling the spirits of our great-grandfathers doesn’t strike me as the best way to deal with the problem. It certainly isn’t a way to be a credible opponent to austere, deficit-busting conservatism.
The UK could do with at least one party that is comfortable with both markets and modern Keynesian theory. One that learns from Minsky, Krugman and Stiglitz. I’d like that party to be the Lib Dems. It’s the economy, stupid, as the saying goes.