Hoisted from Comments: Kenneth Almquist writes:
Calling Milton Friedman: Economists Have Always Built Models in Which Aggregate Planned Expenditure Is Not Equal to Income Department: Wow, I guess I deserve an award for actually having made it to the end of Cochrane's diatribe.
Paragraph 25 nearly did me in: "If you believe the Keynesian argument for stimulus, you should think Bernie Madoff is a hero." Quick advice: do not, under any circumstances, try to count the number of ways in which this is wrong. Suffice it to say that for most people, the question of whether running a Ponzi scheme is morally wrong is a fairly simple question--one that can be answered in the affirmative without disproving Keynesian economics first.
Fortunately, Cochrane quickly returns to economics, and there he does much better: "If you believe the Keynesian argument for stimulus, you don’t care how the money is spent." That's wrong, of course, because if you pay people to dig ditches and fill them up again, you get an economic stimulus, but if you instead pay people to produce something that will be useful at a later time, you get the same economic stimulus, but get something useful in addition. Therefore, you are better off if you pay people to produce something useful. But at least Cochrane is only wrong once in this sentence. If Cochrane's career options were limited to economics and moral philosophy, he clearly made the right choice.