I was pleasantly surprised about the fantastic response I got from my last post and would like to thank everybody for all of the nice comments.
I got one comment asking me to "back up" my assertion that Friedman was proved right about his stagflation, which sort of underlined my point. Although now much maligned in some circles, Milton Friedman won a Nobel Prize for Economics and so did a lot of other of the conservative economists that he is associated with. These were serious people with powerful ideas. They were also original ideas (hence the Nobels), but they were original 30 or 40 years ago.
So let's assume that history marches on and update a bit. Even a casual glance at Nobel Prizewinners in Economics will show a sea change.
Krugman: Okay, let's start with the obvious: The newest Laureate has been the Republicans most prominent critic over the past 8 years. He's responsible for groundbreaking work in Trade Theory (is Airbus a good idea?) and Geographical Economics (i.e. why internet companies tend to be located in Silicon Valley).
Limitations of Markets: A bunch of prizes have been awarded about the limitiations of markets. the 2007, 2003, and 2001 prizes all went to people who were studying the this area. Whether it is by how a market is designed, through what information is available or because of quirks in human psychology, markets are imperfect and a large amount of the cutting edge work in economics over the last 20 years has been devoted to studying those imperfections and how improvements can be made. So three of the most recent Nobel Prizes argue in some way against the idea that policy makers should just let the markets work.
Game Theory: The branch of Mathematics that was first applied to nuclear war is now applied to economics and social issues (such as gentrification). Nobel Prizes in 2005 and 1994 were for game theory.
I think that it is safe to say that for the last 10 years, most of the work that Nobel Prizes have been awarded for are related to international competiveness, trade, or how the government can intervene better if they relate to government at all.
None of the Nobel Prizes in the last ten years went to conservative economists or to findings for market based solutions. That doesn't diminish the accomplishments of years past, but it does point to why the Republicans are in such bad shape. They either stopped thinking or stopped listening to people who do while prefering knee-jerk dogma over real solutions. Worse, the cognitive dissonance has lead to an appaling lack of accountability. To paraphrase John Kerry: believing one is right doesn't make it so.
This is the real danger for Obama and the Democrats, who will most likely go into office with a huge mandate to take the country in a new direction. It begs the question: What direction is that?
One last point: Although no Nobel prizes have been awarded, a lot of serious thought over the last decade has been directed toward Network Theory. After a brief study of which any reasonable person would conclude that it would be almost impossible for two politically active people in Chicago working on educational issues NOT to know each other.