But the problem is that the explanation is so US-centric. Let us accept that the GFC was all the fault of American monetary policy and the Fed. But what then was the cause of the downturns in Europe, Asia and Australia? For the rest of us, it was not due to monetary policy at all. You cannot use government regulation or monetary policies to explain what happened. There is literally nothing I can think of any government in any other part of the world could have down to prevent the GFC from affecting their own economies.

Think only of Australia. We were on the receiving end of an international maelstrom in which the entire world’s financial system froze. None of the issues discussed by Wood – past bailouts, too-big-to-fail, low interest rate policies – are applicable. They had nothing to do with what happened to us in Australia.

That is why I find explanations of the cycle that focus on monetary policies alone so unsatisfying. They tell you much about what happened in the US on this occasion but leave out everything that is relevant to the rest of the world. On other occasions looking at monetary policy in the US or anywhere else would not make sense of events. A proper theory of the cycle must provide a more complex and complete explanation that takes a larger wider perspective on why maladjustments take place.

Meanwhile I see the RBA kept rates up this month against the general expectation. We really do have the best monetary policy in the world. Not perfect of course, since it is based on so many unknowns. Just better than everybody else’s which is pretty remarkable in itself.

Located in the southwest corner of the WTC redevelopment site, in the south bathtub, is the Vehicular Security Center and Tour Bus Parking Facility (VSC) construction project. As part of a comprehensive logistics plan developed by the Port Authority, the VSC was designed as a state-of-the-art security screening check point for all buses, trucks and cars accessing the WTC site and parking facilities. When complete, the below-grade structure will reach five stories underground into basement connecting ramps leading to the parking and below-grade facilities of all of the adjacent projects on the 16-plus acre WTC site.

But aside from the security you would not know there was anything about the site in any way related to terrorism past, present or future. The memorial pools have the names of those who died in the Twin Towers inscribed on the marble. Why a fetish is made of those who died without further mention of any other issue such as why they died, who had murdered them and what lessons ought to be drawn, is clearly done so they can say something, since if they couldn’t at least say that, there was nothing else those who designed this non-memorial would be willing to say at all.

Freud spoke of repression of the individual psyche. Here is evidence that it is possible for such repression to happen across an entire society. The effort made to ignore and forget is the most powerful symbolism I found.

Despite deep differences on a range of issues, Romney and Paul became friends in 2008, the last time both ran for president. So did their wives, Ann Romney and Carol Paul. The former Massachusetts governor compliments the Texas Congressman during debates, praising Paul’s religious faith during the last one in Jacksonville, Fla. Immediately afterward, as is often the case, the Pauls and the Romneys gravitated together to say hello.

This is how politics on the same side of the fence needs to be done when the enemy awaits. But I suspect that it is deeper still. They both represent similar values and on domestic policy there may not be a dime’s worth of practical difference between them.

Meanwhile the ducks are falling into line. Donald Trump’s endorsement today carries I suspect few votes. Its signifcance is in the recognition that you should not mess with someone who may very well be the president a year from today.

The former speaker, having seen plenty of ups and downs, vows that ‘people power’ will overcome ‘money power’ in the end.

This is almost the perfect statement of a leftist ideologue, where the evil Mr Moneybags is set upon for stealing the election along with everything else from the benighted poor.

For myself, having been quite hopeful about Gingrich on his second coming during this campaign, I have become totally disenchanted and I can see that many others have travelled the same road over the past few weeks. Having been a very early supporter of Ronald Reagan back even before 1980, and being the very essence of a small government fiscal hawk, being every inch the Tea Party member that I am, and holding a very low membership number amongst the Anyone But Obama school of thought, I am hardly a sell out to the left.

If you want Obama out, fiscal discipline returned, Obamacare reversed and a stronger American international presence, there is no one more likely to achieve all of these than Romney. He is, as an added bonus, also far more electable, a not minor consideration I would have thought.

ABOUT 150,000 social and community sector workers have won pay rises ranging from 19 to 41 per cent after a historic equal pay decision today.

But Fair Work Australia has extended the phase-in period for the pay rises by two years to eight years, following concern about their cost impact.

The tribunal’s full bench has also split, with one senior member opposing the wage increases and finding unions had not made out their case.

Today’s ruling, the beneficiaries of which are mainly women, followed an order sought by several unions, including the Australian Services Union, which was supported by the federal government.

Understanding the relationship between productivity, employment and the cost of labour is always weak under the ALP, but the economic illiteracy of this Government may have plunged to new depths. Many of those the Government believes they have helped they have actually harmed and the effect on the economy overall will be to weigh it down with more dead weight which will lower living standards in ways that will be very noticeable but quite beyond the reasoning ability of those in the union movement.

I also see that Graeme Watson has put himself out of the running to be the next President of FWA. A brave stand and I wish it were more common.

But lastly, do yourself a favour, and direct your criticisms at the Government. This is what the Government sought. Their instrument may have been FWA but the actual reason for the decision you see is government policy. I have watched on too many occasions the Commission taking the rap for an actual decision that was driven by government. I hope it doesn’t happen that way again.

The Grant administration took the immediate stopgap measure of releasing fifty million dollars into the stricken economy.

Doesn’t sound like much to us in our days of trillion dollar deficits but I’m sure it amounted to serious money back then. So even in classical times there were measures taken by governments. But you may also be sure the $50 mil did not create levels of debt that could never be paid off.

It was also interesting to see how many presidencies were hammered by major recessions. Van Buren in the 1830s, Grant in the 1870s, Cleveland in the 1890s and Hoover in the 1930s. Every 20-30 years, it seems, unless there is a war that postpones the recession for about a decade. So put it on your calendar. The next major recession will be in the 2040s. But first we need to recover from the recession we are now in.

Romney has however walked it in. In the end, it was not even close. And it is not just Gingrich’s nay-saying but the very unpleasantness of it that I think has done him in. The value of the primary is in the practice it gives a candidate in presenting his arguments. It also provides plenty of opportunity to find any flaws in the armour. Who really can stand the heat in the kitchen? And in all these areas, Romney has really shown his stuff. You never actually feel that Romney enjoys the electioneering and there is a falseness in watching him perform. But more and more are seeing that as a positive. The gauntlet a candidate needs to run is not what the tasks of office will be. But the meanness to be a candidate and get in the ring with Obama is crucial, and in dealing with Gingrich in a good-bye-Mr-Nice-Guy way has made the possibility of nominating Romney seem more plausible. If he can do to Obama what he did to Gingrich, I’ll try to get back a year from now for the inauguration.

This is from the best story I thought that captured how it looked to me. Please note how it is written as warning from one Democrat to another. This is the way of the media.

Mitt Romney’s resounding win in the Florida GOP primary is a warning shot to any Democrats who think the former Massachusetts governor will be a soft target.

Romney and his advisers showed dexterity, smarts and toughness in retooling his campaign within hours of his stinging loss in South Carolina on Jan. 21. Romney followed the revised roadmap to a tee.

He shredded Newt Gingrich in Florida’s two debates, leaving the former House speaker fuming and flailing in the campaign’s closing days. He summoned a host of prominent Republicans to denounce Gingrich. And he regained his image as the person best positioned to take on President Barack Obama this fall.

Democrats ‘like to comfort themselves with the thought that a competitive campaign will leave us divided and weak,’ a buoyant Romney told the crowd celebrating his victory Tuesday.

The media in this has been relatively neutral. They will pull all stops to re-elect Obama once the campaign is really on. I now do think Obama can lose. But wall-to-wall negatives about Romney and the failure to really discuss the in-depth failings of the current President are an advantage that only Obama’s incredible incompetence may be able to neutralise. But the election will be close.

Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure — changes in real G.D.P. since the recession began — Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground.

Nor is Britain unique. Italy is also doing worse than it did in the 1930s — and with Spain clearly headed for a double-dip recession, that makes three of Europe’s big five economies members of the worse-than club. Yes, there are some caveats and complications. But this nonetheless represents a stunning failure of policy.

And it’s a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years.

It was me not Krugman who wrote back in 2009 that if governments took the policy actions they took, then the outcome would be the disaster of major proportions that we now actually have. I said our economies would not recover. I said unemployment would remain high. I said investment would not return to anything like their previous rates. I argued prosperity would not return.

This was merely the application of classical business cycle theory which Keynes overturned in 1936. There may have been a few of these folk who lived on until the 1960s and 70s. But by then they were without policy relevance and had gone from the world of policy debate. Today all we have are various cuts of Keynesian theory and a vaguely classical Austrian economics that does not treat Say’s Law as anything other than peripheral. As for the classical theory of the cycle, there are few enough around who use this economic theory to make sense of events.

What really has embedded into me the recognition of how far from understanding what has gone wrong economic theory now is has been the return of this vindicated Keynesian triumphalism with hardly a word of response from any economist who might actually get a hearing in any paper or media outlet today.

I said in 2009 that what you see now is exactly what you would get if you did the things they were doing. And I have been meeting with economists during this brief trip of mine who are on the more market side of things but not one of them has a genuinely anti-Keynesian anti-stimulus theoretical story to tell. They still talk about monetary policy errors often going back to before the financial crisis. And they talk of debt and deficits. None tell a story of policy failure in 2009-11. Where is the critique of the stimulus? Where’s the theoretical flaw? What did governments do wrong? Is it just debt or the deficit, or is there something more?

Until I ventured forth on this trip, I had assumed that at least economists on the conservative side of the fence had a critique that even if not the same as mine, would at least focus on the stimulus and why it not only did not work but in fact made things worse. They would point out, in their own ways, that the depth of our current problems stemmed from the stimulus. Well forget it. Every economist I have met with so far thinks about macro using some version of aggregate demand as a reasonable proxy for events.

Well, I am meeting a whole lot more over the next two weeks and I am going to find out what it is with great specificity that they believe has gone wrong.

My question really is this. Just exactly what is wrong with what Krugman wrote? This is what I want to know. What’s wrong with Krugman and Keynes?

It’s two in the morning. I’m going to bed.

If classical economics and Say’s Law ever do make their return to a conscious understanding amongst economists, Jimmy Adams and the Waffle House in Durham, North Carolina will be included as part of the romantic literature on how it happened. Keynesian economists still today talk about “the Cambridge Circus” and its role in overturning classical theory. If classical theory ever does make its way back, Jimmy’s book and his six months as a server will be part of this story.

Jimmy had worked for a hedge fund until 2009 and then in the company of thousands of others found himself unemployed. The form of penance he took was to become a server on the night shift in the Durham Waffle House. There he had much time to reflect on economic matters, the nature of value added and the causes of the global financial crisis while preparing grits and sweeping the floor. The result was his autobiographical tale of what things were like combined with his knowledge of finance and classical theory of the business cycle. I have written about this once before in Say’s Law as literature. I write about it again which is only right since the book now has a second edition. You can even find a quote from me on its back cover.

I can only say that for me it is extraordinary becaused we both see the operation of the economy in almost identical ways. Which is another way of saying that everything he said made perfect sense to me.

Prince Fielder, a slugging first baseman, agreed to a nine-year, $214 million deal with the team his father, Cecil, played for in the 1990s

Also from the front page of The New York Times, January 25, 2012:

Mitt Romney and his wife, Ann, made $27 million in 2010.

I suppose, if you are a Democrat, this would also disqualify Prince Fielder from running for President of the United States.