Conservatism was able to hold on thanks to Bush v. Gore and install Roberts even though Bush lost the popular vote by half a million votes.
We argue that this consensus – with its methodological commitment to optimization by rational agents, its uncritical faith in central banks, and its support for the norms of “sound finance” – has offered a favorable environment for arguments for austerity. Even the resounding defeat of particular arguments for austerity is unlikely to have much lasting effect, as long as the economics profession remains committed to a view of the world in which in which lower government debt is always desirable, booms and downturns are just temporary deviations from a stable long-term growth path, and in which – in “normal times” at least -- central banks can and do correct all short-run deviations from that optimal path. Many liberal, New Keynesian, and “saltwater” economists have tenaciously opposed austerity in the intellectual and policy arenas. But they are fighting a monster of their own creation.Strange Defeat
Strange Death of Liberal England
I'm still digesting the heterodox critique of New Keynesiansim. They don't have a well-defined counter-narrative except that NK is too focused on equilibrium and the self-correcting nature of the macroeconomy and supply and demand. See the debate Piketty sparked.
Barney Frank letter in response to Elizabeth Warren’s Moment
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