The Keynesians haven't been proven wrong on their claims that increased demand -> increased production. It's the part where increased production -> increased employment that they have been shown conclusively to be incorrect.
I feared that mentioning Krugman would bring out the Krugman-haters with their nonsense. Sadly, I was right to fear.
You know that the Fed statistics that you cite show that, for example, durable goods production is down 6% since 2007? Even though population has increased in that time. That is to say, the graphs support what I said and what Paul Krugman says, not the nonsense that you think you've learned from Fox News.
You are completely ignoring the point - if demand increases but producers don't need to hire people to produce more, employment does not increase. I.e., demand may be correlated with production, but production need not be correlated with employment.
If you looked at the fed stats I cited, they show precisely a lack of correlation between production and employment.
Nothing you have cited disputes this fundamental point. Krugman doesn't even try, he just declares victory and insults those who disagree.
Nonsense. Should I post the graphs again? The graphs clearly demonstrate increased production without a corresponding increase in employment. This is the "jobless recovery" that many columnists lament. Some graphs again:
According to Keynesians (e.g. Krugman), recessions are caused by labor not becoming cheap in response to exogenous shocks (due to sticky nominal wages). Do you disagree with this theory?
Funny - demand is doing just fine. It's only employment that is suffering. See stats here:
http://news.ycombinator.com/item?id=2240468
The Keynesians haven't been proven wrong on their claims that increased demand -> increased production. It's the part where increased production -> increased employment that they have been shown conclusively to be incorrect.