As we saw in the previous post, Scott Sumner never gives up on nipping at the heels of Keynesianism. His petulance and peevishness are becoming the stuff of legend. Who can forget that interminable debate he had with Simon Wren-Lewis for weeks-not that it was mutual. Wren-Lewis wrote a few posts but it was Sumner who kept doubling down.
As this Economist piece makes clear,
"Over the past month, Paul Krugman, Brad DeLong, and Simon Wren-Lewis engaged in an interminable duel with Tyler Cowen, Scott Sumner, sort-of Karl Smith (occupying as usual an esoteric position not easily placed on the ideological grid), and probably some other people I'm forgetting—over an old argument by John Cochrane claiming that the multiplier effect of government stimulus spending probably ought to be zero. The argument by Mr Cochrane was a critical document in the stimulus debate, because it was an articulation in more-or-less public discourse by a well-respected economist of a mechanism through which increased government spending could fail to raise GDP or increase employment at all. Essentially every working practical economist and forecaster believed that the stimulus, like any other government spending, would raise aggregate demand, GDP, and employment. Republican politicians were arguing that it would not, and Mr Cochrane backed them up."
Sumner, predictably reacted to this article too with typical peevishness in his post "Anti-Keynesians and Market Monetarists."
Krugman puts the historiagraohy of the anti-Keynesians during this recession well:
"Hmm. A number of people who attacked Keynesian analysis vigorously seem to be in the process of backing off, which is good. But they also seem to be in the process of rewriting history, specifically the history of their own positions."
Krugman as usual doesn't mention Sumner-he's probably right in not punching down-though he is a great example of someone who changes his position to prove he was right all along. Just see how he tries to explain the failure of David Cameron's austerity-there was no austerity practiced in Britian, actually there was stimulus under Gordon Brown, sounding a lot like those who try to blame the rise of Hitler on the hyperinlfation of the mid 20s rather than the deflation of the early 30s.
Krugman does show the 180s that Cochrane, Niall Ferguson and-particularly amusingly-Tyler Cowen who tried to claim that Friday's strong job numbers were proof of Real Business Cycle theory (RBC).
Now he is claiming that he is a New Keynesian rather than an "Old" one. Yet where does he praise New Keynesianism? He praises it's antipode-within the modern DGSE paradigm-RBC.
"The “big loser” here?: Old Keynesianism. You really can get a recovery when the real shocks are moderately positive. You will note, as we have been told many many times by many many sources, fiscal and monetary policy have not been extremely pro-active in recent times; in fact the stimulus has been trickling to a close. The big winners, apart from the American public?: real business cycle theory. It is part of any cyclical explanation, whether one likes it or not."