Did the economists find our stagnititis in time?

Paul Says:

The Trouble With Economics Is Economists

It is deeply unfair to blame textbook economics either for the crisis or for the poor response to the crisis. The mania for financial deregulation, for example, didn’t come out of standard economic analysis — in fact, it flew in the face of the canonical model of banking crises, Diamond-Dybvig, which suggested both a crucial role of government guarantees to prevent self-fulfilling panics and the need for regulation to control the moral hazard such guarantees would create. It’s true that few economists tracked the rise of shadow banking that bypassed the traditional safeguards — but that was a problem of vigilance, not bad theory.

Ok, then lets go look to see if Simon Wren-Lewis has the stagnititis in his play book: Well, no stagnititis so far, let me at least find a good quote:

The absurdity of linking mainstream economics to all our current problems is also obvious if you think about austerity. As I never tire of saying, the proposition that austerity was a crazy thing to try in this recession is prominent in the pages of undergraduate and graduate textbooks.

I can't speak for Europe, but here in good old California, the multipliers in G@DC have been proven, watched, nailed, and legalized as less than one for 30 years.  I can see that because my textbook is complete to the full spectrum of the yield curve, so I see the stagnitis, any fool reading the standard text would have never picked it up.