There are stupid ways to run a modern economy. And there are smart ways.
which I think reflect a difference between what Dr. DeLong believes and what I believe. I gather that Dr. DeLong believes that modern economies can be run by wise stewards guided by prudent philosophies. I don’t think that the U. S. economy can be run at all. The choice isn’t between smart ways and stupid ways or good ways and bad ways. It’s between bad ways and worse ways.
While I agree that there are better and worse ways for government to intervene in the economy (particularly in the financial markets), I think that the U. S. economy is sufficiently large and complex with so many purchasers, sellers, and decision-makers that it can’t be guided at all. It’s an emergent phenomenon.
I’m opened to being convinced otherwise. Can anyone present a recent example in any large modern economy of the government fine-tuning the performance of the economy is some beneficial way? If you can’t fine-tune it, you can’t run it. All you can do is act and hope for the best.