At the level of pure theory, a similar contentment prevailed. Though he acknowledged one notable dissenter (Solow 2008), Blanchard's survey was unequivocal:

The state of macro is good. (Blanchard 2009, p. 210)

Few more poorly timed statements have ever been made by prominent economists.

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Blanchard was forced into recanting his optimism less than a year later (Blanchard, Dell'Ariccia et al. 2010). But while he criticized macroeconomic policy prior to the crisis, he remained a believer in neoclassical theory itself:

Identifying the flaws of existing policy is (relatively) easy. Defining a new macroeconomic policy framework is much harder... It is important to start by stating the obvious, namely, that the baby should not be thrown out with the bathwater. Most of the elements of the pre-crisis consensus, including the major conclusions from macroeconomic theory, still hold. Among them, the ultimate targets remain output and inflation stability. The natural rate hypothesis holds, at least to a good enough approximation, and policymakers should not design policy on the assumption that there is a long-term trade-off between inflation and unemployment. Stable inflation must remain one of the major goals of monetary policy. Fiscal sustainability is of the essence, not only for the long term but also in affecting expectations in the short term. (Blanchard, Dell'Ariccia et al. 2010, p. 207; emphasis added)

Blanchard's unwillingness to countenance the possibility that the Great Recession may be a Kuhnian critical anomaly for neoclassical macroeconomics (Bezemer 2011) is representative of this school of thought:

Indeed, the extreme severity of this great recession makes it tempting to argue that new theories are required to fully explain it... But ... it would be premature to abandon more familiar models just yet. (Ireland 2011, p. 1; emphasis added)

As a representative of the Post Keynesian and complexity theory rump, and one of the handful of economists to foresee the Great Recession (Keen 1995; Keen 2000; Keen 2006; Keen 2007; Keen 2007; Bezemer 2009; Bezemer 2011), I could not disagree more with Blanchard and his colleagues.

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I cover the myriad flaws in neoclassical macroeconomics in much more detail in Keen 2011b; suffice it to say here that, far from it being unwise to "throw the baby out with the bathwater", neoclassical macroeconomics should never have been conceived in the first place.