Proof is in the Pudding

Tyler Cowen has a go at the liberal economics blogosphere.

The old Keynesian approach has a major presence in the blogosphere but much less influence in current academic macroeconomics.  Whether Econ 101 sides with the Old Keynesians I am not sure (it depends who teaches the class), but Econ 2011 in many cases does not.=

There are enough AD-denialist arguments running around that the new and old Keynesian perspectives can forge an alliance on some major issues.  But as the downturn continues, this intellectual alliance will grow increasingly fragile, mostly over the question of whether long-run or short-run models are relevant.
Not long ago I tweeted this:

Confused by the Right on macro, you’re a New Old Keynesian; confused by the Left, you’re an Old New Keynesian.

I also see old Keynesians as believing that the IS-LM framework follows directly from the quantity theory of money, while new Keynesians are not committed to such a view and may even oppose it.  I may write a post devoted to this topic.

I am sort of out of my depth, but it appears the "old Keynesians" constitutes the DeLong-Krugman-Thoma axis and the "new Keynesians" are Cowen and his ilk.

I like this comment made at DeLong's blog from "RPL":

I have a suggestion for the commenter above, and in fact for most observers of the absurd stuff being written by the free market ideologues of the economics profession. Ignore the ideologues and take a look at the perspective of the economists who make their forecasts in the service of actually making money, i.el[sic], the economists of the asset management industry and of Wall Street. I assure you that for the most part they don't pay any attention to the rantings of guys like Barro, Cochrane, Mulligan and the rest of the University of Chicago gang. Hatzius of Goldman Sachs, Zandi of Moody's analytics, Harless of Atlantic Asset management analyze the economy from the perspective of what works, because they have to, it is not an intellectual hobby for them, they and their bosses are all trying to make money. And lo and behold what you will find is that their analysis has a lot more in common with Krugman, Delong, et.al., than it does the guys listed above. Why, because their stuff needs to work. As Barry Ritholtz points out all the time, successful investing requires fact-based analysis. How do I know? Because I am the retired Chief Investment Officer of a firm that ran and still runs well over $100 billion and I assure you there is no other way to be successful. I hope Barro has been trading on his beliefs, because it is certain that I now have some of his money safely locked away in my personal portfolio.

I haven't carefully documented it, but from my memory the "old Keynesians" have proven to be more correct than the "new Keynesians" starting with the housing bubble and through Lehman, the government's response (via the Fed and fiscal stimulus) and the weak recovery.

The arguments that the stimulus or quantitative easing didn't work are harder to contradict because these policies have prevented things from getting worse but conditions are still bad. It's there in the data, but critics refuse to engage the data with an open mind.