Open Thread: Two Anti-Keynesian Economists Awarded Nobel Prize
The Nobel Prize for Economics was just awarded to two American economists who have separately researched the flaws in government stimulus spending, a blow to the Keynesian policies of Obamanomics.
Do you think this is a temporary bout of sanity? Or do you think it's a sign of something larger, given the collapse of statism in Greece and the United Kingdom, for example? Let us know your thoughts in the comments.
In only his first year in office, President Obama was awarded a Nobel Peace Prize, an honor that continued a trend of liberal winners, having previously been awarded to Al Gore and former President Jimmy Carter.
The awarding of the Nobel Prize for Economics to two anti-Keynesian economists could signal a shift, though. New York Univesity's Thomas Sargent and Princeton's Christopher Sims, the winners of the prize, have both done extensive work in macroeconomics that has been of huge help to central bankers and economic policymakers.
The two economists have both looked specifically at the failure of government stimulus packages. As explained by Investor's Business Daily:
Sargent's discoveries in particular echo the rationale Republican leaders in Congress have presented in opposing the massive Democratic stimulus spending during the first two years of the Obama administration — that such spending seeks to give the economy nothing more than what House Budget Chairman Rep. Paul Ryan over the weekend aptly called a "sugar high."
Sargent has previously directly criticized Obama's policies, calling his economic advisers, "surprisingly naive for 2009" and "not informed by what we learned after 1945."
While Sims might not be quite as outspoken a critic of Obamanomics as Sargent, at a 2004 Federal Reserve Bank of Boston conference, he selectively criticized Alan Blinder, economic adviser to Bill Clinton, Al Gore and John Kerry. On using stimulus spending to counteract economic downturns Sims said Blinder overlooks the debt-driven "inter-generationally unfair crowding out" that a massive stimulus can cause.
What are your thoughts?