Epistemic Closure
(or The Wall Street Journal Op-Ed Page is loco)

Jonathan Chait blogs about supply-siders and their zombie economics(reprinted in its entirety):

Supply-Siders: 1990s Boom, Bush Recession Only A Flesh Wound!

Like the Black Knight in Monty Python, supply-siders fight on with a bluster utterly undiminished by two decades that have systematically cut the premises out from their philosophy one by one. First they insisted Bill Clinton's upper-income tax hike would destroy the incentive to get rich, create a recession and reduce tax revenues. Then they promised George W. Bush's supply-side tax cuts would deliver a decade of prosperity. Now they're warning that a return to Clinton-era top tax rates will destroy America's economic competitiveness. Here's Wall Street Journal op-ed columnist Daniel Henninger:

Extend the current tax rates for all and free everyone in an economy begging for the chance to be strong again. Yes, the U.S. economy will always be "strong," but it needs to be strong enough to take on all comers and win, which last time I looked was the real American way.

Advocates of keeping the Bush-era tax rates for the rich seem to write as if they have some kind of new plan. In fact, the Bush-era tax rates are currently in place. We're already "free." The question is whether to return to the slavery of the Clinton era tax regime.
I also like this bit about why raising taxes on the rich won't reduce the deficit:

The deficit is dangerous. But raising taxes to cut the deficit is a bailout for the spenders--until proven otherwise.

I think it's been proven:

DeLong passes on the info that Aussie John Quiggin's new book is scheduled for release on October 5th:

Krugman blogs about the return of the Mellonheads:

One of the truly amazing things, however, is the return of full, 1930s-type liquidationism -- the idea that a slump serves a useful purpose, and that stimulating the economy, even through monetary policy, is a mistake. And so we have Raghuram Rajan in today’s FT arguing that with 9.5 percent unemployment, long-term unemployment at record levels, and falling inflation, we need to ... raise interest rates

...

I’ve written about this before; but let me add a few numbers. Is it at all reasonable to attribute high unemployment now to the need to shift the economy out of housing and cars?

OK, I actually haven’t taken cars into account; someone with more time can do that. But let’s look at the role of job losses in construction versus other sectors, since December 2007. It looks like this:

If high unemployment were largely about shifting workers out of an overblown construction sector, wouldn’t you expect job losses to be concentrated in that sector? Wouldn’t you expect employment elsewhere to be, if anything, rising? In fact, however, the vast majority of job losses have occurred in parts of the economy with little direct connection to the housing bubble. Yes, as a percentage job losses have been much larger in construction; but nothing in Rajan’s argument explains why we shouldn’t be using policy in an attempt to prevent vast job losses in parts of the economy that aren’t overblown.

Rajan was the top economist at the IMF (surprise, surprise) but more surprisingly he was the lone dissenter at a famous going-away party in Jackson Hole, Wyoming, for Alan Greenspan in August 2005 after Bernanke had been nominated to replace him. He presented a highly critical paper to the guests - central bankers do that at parties - and according to John Cassidy's wonderful book How Markets Fail, "As a rule, central bankers don't rush stages or toss their chairs; if they did Rajan might have been in physical danger."

But Rajan turned out to be correct when he called out Greenspan and politicians' deregulation of the financial sector for putting the economy in a vulnerable position.

But Rajan is from India and the Brahmin there have a notoriously callous attitude towards the lower classes.