But the Bush apologists hope that you won’t remember all that. And they also have a theory, which I’ve been hearing more and more — namely, that President Obama, though not yet in office or even elected, caused the 2008 slump. You see, people were worried in advance about his future policies, and that’s what caused the economy to tank. Seriously.
For of course expectations never do change behaviour, do they Professor Krugman?
No, no, that the stimulus will increase aggregate demand purely by the commitment to the stimulus happening, even if it took a long time arriving, was never one of the arguments made in favour of the stimulus, was it?
Now, no, I don\’t believe that Obama caused the crash through expectations of what he would do. But for a Nobel Laureate to simply dismiss expectations as clearly and obviously insane as a reason for a change in the economic weather is far more ludicrous than the original allegation.