Its interesting how DeLong who got so many things wrong is so convinced he is totally correct. He talks about Skidelsky, who is a convicted old Keynesian who so

Its interesting how DeLong who got so many things wrong is so convinced he is totally correct. He talks about Skidelsky, who is a convicted old Keynesian who somehow survived the 70s to hunt economics. Many monetarist (and others) have correctly point to these the drop-off in demand in 2008/2009 and said if it continued it would be bad. The large error that happened, was actually the professions believe in the liquidity trap. Those like Krugman and DeLong who wrongly believed that 'the central bank was out of ammo' and the central bankers who ran around like headless chickens when their New Keynesian models failed at the ZLB. It took smart central bankers like those in Switzerland and others (and eventually the US) to overcome that and simply go back to what is now called 'unconventional monetary policy'. It is of course only called that because New Keynesian labeled it that (its not in their models so it can't possibly be a normal thing to do). The Fed for example was so convinced that they needed to control the interest rate (because of New Keynesian thinking), they sterilized (selling bonds to prevent the balance sheet from growing) all their bad asset purchases and once they were unable to sustain that and started growing the balance sheet (labeled QE1 after the fact), they switched to paying interest on reserves with the express purpose to not allow the new money to 'get out'. At the same time they are doing this, NGDP is falling of a cliff. Its economic madness and the reason is a false believe in New Keynesian models and specifically the liquidity trap. It is insane to use a model that practically fails when the crisis hits.