Financial Times stimulus / austerity debate (26 – 30th July).
Thursday’s anti stimulus article is by Jeffrey Sachs of the Columbia University “Earth Institute”. My heart leapt for joy on seeing this, because as I have previously noted, Jeffrey Sachs and the Earth Institute are a fount of false logic and economic illiteracy. If deficit terrorists have to employ Jeffrey Sachs as a spokesman, then deficit terrorists are intellectually bankrupt.
Sachs’s article is mainly devoted to advocating his own quaint set of priorities for the U.S.: more infrastructure investment, clean energy, more education, defence spending cuts and so on.
Some of those items are perfectly laudable, of course. But they have precious little to do with the stimulus debate.
That is, the distribution of a country’s spending as between defence, wind farms, massage parlours, food, etc, etc has very little to do with the question as to how to maximise employment levels.
For the benefit of any mentally retarded readers from the Earth Institute I’ll put that another way. For a given deficit, national debt, labour market efficiency, etc. employment levels will be much the same regardless of the distribution of spending as between electric cars, internal combustion engine cars, gambling dens, you name it.
What is UTTERLY TRAGIC is that there are people teaching at universities who don’t understand the above very simple point.