Must-Read: Julie Verhage: The Two Big Economic Policy Failures That John Maynard Keynes Would Be Disappointed by Today
Must-Read: Robert Skidelsky is depressed because of (i) bad financial regulation before 2007; (ii) too weak a policy response to restore demand during 2007-2009 and after; and (iii) a policy response biased toward inducing investment in long-duration assets, which risks creating more systemic problems down the road:
The Two Big Economic Policy Failures That John Maynard Keynes Would Be Disappointed by Today: “Robert Skidelsky… prominent biographer of Keynes, shared his thoughts…:
…First, [Keynes] would be frustrated with the lack of precautions taken to prevent a huge financial crash like the one we saw in 2008. Secondly, Lord Skidelsky believes Keynes wouldn’t be happy with the policy measures taken after the crash. Keynes would have wanted a more ‘buoyant response’….
The recovery has been very very slow. We’ve been for many years in a state of semi-stagnation, and the recovery is still very very weak in the European Union…
The actual recovery measures we’ve taken, particularly quantitative easing, have actually skewed the recovery towards asset buying and real estate, thus threatening to recreate the circumstances that led to crash in the first place. I think he would have been disappointed by those policy failures.