The January 17-January 23 Bloomberg BusinessWeek issue had an article titled “Back to the Economic Future.” The article notes “John Maynard Keynes and Fredrich Hayek, who battled over the Depression, are getting a fresh look as the Long Slump lingers on.” It discusses the current state of the (macro)economic profession and theoretical trends within the industry. I think the article is worthwhile, as it highlights several important issues. However, I don’t agree with some of its points.
I found this comment to be especially noteworthy:
“The newfound interest in the likes of Keynes and Hayek makes sense, too—their ideas were shaped by the Great Depression, which is the last time things were worse than they are now (for the U.S., anyway).”
Ever since the onset of the “Financial Crisis” there have been many prominent people who have indicated that they believe our current economic situation similar to that of The Great Depression. I have written of these comparisons on numerous occasions. As I said in the July 13, 2009 post, “…although our current period of economic weakness does have similarities to that of The Great Depression, there are notable differences as well. To believe that both situations are very similar, and by acting accordingly, imperils our economic situation.”
A Special Note concerning our economic situation is found here
SPX at 1283.35 as this post is written