Don't know much about history--Economist edition

a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/07/05/AR2009070501587.html"Robert Samuelson:/abr /br /blockquote...br /br /p Overshadowing the misunderstanding of finance is a larger mistake: ignoring history. By and large, most economists don't care much about history. Introductory college textbooks spend little, if any, time exploring business cycles of the 19th century. The emphasis is on "principles of economics" (the title of many basic texts), as if most endure forever. Economists focused on constructing elegant, mathematical models. "For years theorists held the intellectual high ground," writes economic historian Barry Eichengreen of the University of California at Berkeley. They were "the high-prestige members of the profession." /p pHistory is messy and constantly changing, as Ferguson reminds us. It flows from institutions, technologies, laws, cultural and religious values, governments, popular beliefs, and much more. Model-building and theorizing can sometimes simplify the real world in ways that provide insights. But often, the models' assumptions depart so radically from reality that the conclusions become useless. Someone who studies history becomes humble in the face of the ceaseless changes and capricious mixing of motives. /p pEconomists thought they had solved the problem of economic stability. Their tools sufficed to prevent widespread economic collapse, even if they couldn't control every twist in the business cycle. This conceit may have once been true. No more. Markets became more complex; more money crossed national borders; people became complacent. History moved on, but economists didn't. /pbr //blockquoteWhen those trying to solve the problems of counterinsurgency warfare against the Islamist religious bigots went looking for the answer, they found it by doing a historical survey of insurgencies. They discovered the keys to defeating insurgencies in the process and applied those keys to achieve victory in Iraq where many had given up.br /br /Economist need to do the same thing, but too many of them are looking at the wrong lessons. Democrats look at World War II and thing it was the spending, rather than the concentration of effort and the driving force of the war on innovation that pulled us out of the depression. A closer look would show the importance of defense spending. Defense spending and tax cuts also brought us out the the Carter recession. Reagan's economic planned created prosperity for a generation until the Democrats pushed us into a housing bubble.div class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5051247-7597208725806125399?l=prairiepundit.blogspot.com'//div

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