re: The fetish of full employment- Henry Hazlitt vs. Ezra Klein

quote:

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if you want to see why keneysian economics fails, just look at california in 2007-2008 and how it handled it's public unions. in a time of economic prosperity, it was supposed to cut government spending, right? what did it do? increased public spending, so that public workers could "compete" with the free market's wages, benefits, etc.

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sure, but this wasn't keynesian economics. It was some bastardization. I would agree that we can't handle keynsian policies b.c we don't have the ability to actually implement it.

This is the problem with abstract economic arguments is they are always summarized and rarely do policies follow the theory closely.

for instance, Ricardo's theory of comparitive advantage requires full employment in both economies. When the frick is that going to happen? But its a given and accepted.

Its sorta bizarre. BTW, this impacts most conservative economic theory, b.c consumers do not make rational decisions.