Death of Keynesianism? Not for Paul Krugman

Some have been speculating on the death of Keynesian economics, but folks need look no further than Paul Krugman to see how strong a grip discredited academic theories still hold on the establishment class. See Krugman's essay this morning, "Macroeconomic Folly":

All of a sudden, people seem to have noticed that policy is moving in exactly the wrong direction. We’re getting headlines like this: Debt Deal Puts U.S. on Austerity Path as Economy Falters.

I’ll need to write up my thoughts here at greater length, but let’s just say for now that what we’ve witnessed pretty much throughout the western world is a kind of inverse miracle of intellectual failure. Given a crisis that should have been relatively easy to solve — and, more than that, a crisis that anyone who knew macroeconomics 101 should have been well-prepared to deal with — what we actually got was an obsession with problems we didn’t have. We’ve obsessed over the deficit in the face of near-record low interest rates, obsessed over inflation in the face of stagnant wages, and counted on the confidence fairy to make job-destroying policies somehow job-creating.

It’s a disaster – and maybe not only an economic disaster.

Fears of far-right rise in crisis-hit Greece...

Well, that's fear alright ... fear-mongering.