Becker on Over-Hasty Conversion
“When the facts change, I change my mind,” say Keynes. But how do you explain people who change their minds when faced by facts they should have known all along? Gary Becker wants to know:
As Posner and others have indicated, there appears to have been a huge
conversion of economists toward Keynesian deficit spenders, but the
evidence that produced such a “conversion” is not apparent (although
maybe most economists were closet Keynesians all along). This is a
serious recession, but Romer and Bernstein project a peak unemployment
rate without the stimulus of about 9%. The 1981-82 recession had a peak
unemployment rate of about 10.5%, but there was no apparent major
“conversion” of economists at that time. What is so different about the
present recession compared to that one, and to other recessions since
then, that would greatly raise the estimated stimulating effects of
government spending on various types of goods and services?
I am baffled as Becker. Can anyone help us out?