It’s a 30 year old position in economics: former British colonies have done better because British colonial institutions were better than those of other imperialists.
Except that there’s new evidence from India.
India has areas that were under direct British rule, and areas that were … hmmm … paying tribute to avoid direct British rule.
The areas of India that were directly ruled by Britain have turned out worse.
John Cochrane is talking about Treasury Secretary Geithner at the G-20 meetings in fall 2010, but he may as well be talking about just about any government official:
Yet Mr. Geithner thinks that the Chinese somehow hurt us. There is at work here a strange marriage of Keynesianism and mercantilism—the view that U.S. consumers supported the world economy by spending beyond our means, so that other people could have the pleasure of sending things in exchange for pieces of paper.
This is all as fuzzy as it seems. Markets and exchange rates are not always right. But it is a pipe dream that busybodies at the IMF can find "imbalances," properly diagnose "overvalued" exchange rates, then "coordinate" structural, fiscal and exchange rate policies to "facilitate an orderly rebalancing of global demand," especially using "medium-term targets" rather than concrete actions. The German economics minister, Rainer Brüderle, called this "planned economy thinking." He was being generous. Planners have a clearer idea of what they are doing.
Via Greg Mankiw.
Keith Hennesey deconstructs Austan Goolsbee’s defense of Obama’s economic performance:
A game you get to play where you choose the policies to cut the deficit, from The New York Times.
Good luck … you’ll need it.
Via Greg Mankiw.
It’s not as bad as portrayed here, but if you can’t figure out why people object to textbook monetary policy, view this:
If the video isn’t showing up, click here.
