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Economic thinking

As a student of economics, I’m running into a wall. It’s hard to keep a sociological perspective when you have to put on the economic-thinking hat.

Conventional economic thinking says government controls on almost anything is bad. Rent control, minimum wages, taxes…the theory is that the market eventually figures out the optimal solution and government intervention leads to a distortion of supply and demand.

If the markets could really do that magic, what happened that caused this recession and financial crisis? Paul Krugman has a theory. The ketchup economists screwed up.

That would be good if we could just get rid of them and move to what the “saltwater economists” think is the right set of policies. But unfortunately, that’s what’s being taught in schools today. Efficient market hypothesis, CAPM, Fama, deregulation…

Maybe it really is time for a 2nd Keynesian resurgence.

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