I was just reading Delong

He quotes a post by Karl Smith who in a humble manner confesses that he does not understand how economists such as John Cochrane believe that a fiscal stimulus cannot effect aggregate demand. Brad Delong says that the problem is that Cochrane has believed this for years and it should be noted that no matter Cochrane's genius in other issues of economics he is completely out of his mind on this issue.

My problem has to do with trying to understand how someone could believe that deficit spending or could not in the right circumstance have an expansionary effect. You either have to believe that people have infinite time horizons, perfect information (which in part goes along with infinite time horizons) or that directed infusions of money into the economy taken from another area are washed out like taking a drop of water from one end of the pool and placing it on the other end.

Delong says that the misconception could occur because they are taking the savings investment identity as more than it really is which is a short hand for a much more complicated behavior. In the current conditions or at least the conditions we saw a couple of months ago you would have to have had your head under the rock to believe that the identity perfectly described the actual behavior of the economy.


Odd Thought About Red Dawn

I've never seen Red Dawn. But I have seen enough references to get a basic understanding of the plot and a sudden thought has occurred to me. If there were some type of invasion from some outside source, the first thing I imagine that conservatives in their current mood would do is to find the nearest liberal and shoot them. Of course not all liberals are unarmed but still.

I can imagine a seen in the woods of a couple of partisans in the woods after the tanks have rolled through burning the town. They're the couple that prudently fled rather than fight the onslaught that killed everyone else. I can see them around the camp fire.

Partisan 1: This wouldn't have happened if the gays didn't do their thing.

Partisan 2: I'm not sure that has a hell of a lot to do with out situation.

Partisan 1: Your one of those commie Obama supporters.

Partisan 2: Yeah I supported him, he disappointed me right and left but hell I generally hope the president does what right.

Partisan 1: That's it. (Pulls gun from holster and shoots Partisan 2)

Obviously this is bad writing and pretty piss poor dialogue. But the general Idea won't leave my mind.