Fred Foldvery's article deals with an imagined situation occurring in a smallish part of the whole of the macroeconomic picture. Such a model is incapable of truely presenting what is really going on because as shown by Henry Hazlett in "Economics in One Lesson", one cannot understand this subject without taking into account more than one side, and in this case a lot more economic entities are involved. Fred should know this, after all he was sent a copy of my book's list of contents supporting this fully integrated kind of analysis.

This kind of partial modelling has been the bane of modern macroeconomics for the last few years. It is the reason why the results of this kind of arguement are not correct but are easily usable to persuade the less technical reader that the claims are true. It is the kind of thing that causes real scientists to ignore macroeconomics and to call it a pseudo-science (Richard Feynman being a good example). As the writer of a truely logical and exact method of understanding macroeconomics as if it were physics, I should know.

-David Chester