Krugman on NPR

This morning while driving to work I heard a snippet from a Paul Krugman interview.  One of his comments (in reference to the Bernanke press conference) perked my interest.  I don’t recall the exact words, but he said something to the effect of:

BTW, I think that I am doing him [Bernanke] a favor . . .it allows him to push back against criticism he’s been receiving from the right.

If someone finds a transcript I’d be glad to correct the quotation.  This reminded me of what I wrote just yesterday:

Without the criticism of Bernanke from us market monetarists, and without the criticism of Bernanke from Krugman, DeLong, Avent, Yglesias, Duy, Thoma, etc, etc, Ben Bernanke’s job would be much harder.  Without that criticism, all the pressure on the Fed would be coming from the right, and would be pushing the Fed in exactly the opposite direction from where Bernanke would like to go.  We are helping him, whether he knows it or not, and regardless of how annoying he finds our criticism.

I’m tempted to say “great minds think alike,” but perhaps that would be presumptuous until I win my Nobel Prize.  Seriously, I wonder if he read my post, or if it’s just a coincidence.

He also pointed to all the jobs we could get from fiscal stimulus; 1.3 million to be precise.  He didn’t mention that the Fed policy he criticized (which is basically “QE2 raised core inflation to 2%, and we’re damn well going to keep it right there.”) would trim a few jobs off that estimate.  Indeed about 1.3 million jobs to be precise.

PS.  I’m getting a lot of push back from commenters that I am being naive in assuming that Bernanke is secretly a good guy, who actually wants the Fed to do more.  I’m not sure my view is a compliment, but let’s assume it is.  Krugman said basically the same thing in the interview.  Here’s another way of putting it:  Take the Fed forecast of NGDP growth over the next couple of years.  Say it’s 4.5%.  Now give Bernanke truth serum.  Ask him if given his druthers, he’d prefer the actual rise of NGDP to be 4.5% or 4.7%.  I’m almost certain I know the answer.  That’s all I’m saying.

PSS.  ‘Druthers’ is kind of a strange word, isn’t it?


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38 Responses to “Krugman on NPR”

  1. Gravatar of Becky Hargrove Becky Hargrove
    30. April 2012 at 10:23

    I had to look in five dictionaries before I found ‘druthers’, though I use it myself! (Even the library dictionary didn’t have it) Means free choice or preference.

  2. Gravatar of beamish beamish
    30. April 2012 at 10:30

    A dialectical variation on ‘I would rather.’ The earliest OED references are to Mark Twain.

  3. Gravatar of Negation of Ideology Negation of Ideology
    30. April 2012 at 10:50

    “I’m getting a lot of push back from commenters that I am being naive in assuming that Bernanke is secretly a good guy, who actually wants the Fed to do more.”

    I’m not sure why this is a controversial view. Any committee run on consensus has this issue. A chairman of a committee always has to lobby to get as much of his way as he can get the votes for. Then he has to decide whether to go to the mat for the rest. If he’s really perturbed, he can vote against the majority, and hold a press conference to denounce the other committee members. Or he can decide half a loaf is better than none and hold his tongue. Then he can quietly advocate for more in private.

    Let’s ask the question another way – if Bernanke was the only vote on the FOMC, do we assume every Fed action would have been exactly the same? Or how about this – why is no one claiming that Bernanke is secretly a hawk and the other FOMC members are dragging his kicking and screaming into more QE?

  4. Gravatar of Morgan Warstler Morgan Warstler
    30. April 2012 at 10:59

    “Say it’s 4.5%. Now give Bernanke truth serum. Ask him if given his druthers, he’d prefer the actual rise of NGDP to be 4.5% or 4.7%. I’m almost certain I know the answer. That’s all I’m saying.”

    And his likely truth serum answer: How much of it is inflation?

    —-

    The core sales point of NGDPLT will never be that it solves bad crises once they happen… by having more inflation.

    NO ONE who matters cares enough about 9% unemployed right now to accept more inflation.

    If they cared enough, we wouldn’t have this problem.

    So logicallly….

    THE CORRECT PITCH is NGDPLT will keep the crises from happening by pissing on booms, and forcing govt. into more productive and smaller boxes.

    If you can’t sell your plan to the people who hate inflation, by giving them: 1) less historical inflation 2) a smaller govt.

    Then your plan doesn’t happen.

    You need conservative converts, everything else is the shallow end of the pool.

  5. Gravatar of Bill Ellis Bill Ellis
    30. April 2012 at 11:00

    Scott…I am sure Krugman is aware of Overton’s Window.
    Are you ?

    http://www.correntewire.com/the_overton_window_illustrated

  6. Gravatar of Josiah Josiah
    30. April 2012 at 11:20

    Krugman is debating Ron Paul on monetary policy on BloombergTV at 4:00 EST today:

    http://www.bloomberg.com/tv/

  7. Gravatar of Major_Freedom Major_Freedom
    30. April 2012 at 11:52

    “Please Mr. Bernanke! Depreciate my purchasing power even more and make the economy go through an even bigger unsustainable boom! Oh, and if you’re feeling benevolent, please try to make sure that the first people who receive the new toilet paper money are those who sell brown baby killer IOUs. I need to have my name on a trophy.”

  8. Gravatar of John hall John hall
    30. April 2012 at 12:00

    @Negation
    This is the difference between the way the Fed is run and some other central banks like the BoE. I was at a talk a while back and Adam Posen, a man in a good position to talk about the differences between the two, described it very well. At the BoE, it is only the voting members discussing and they’re allowed to say whatever they want and if the majority goes against the Chairman, it’s not regarded as a huge deal. At the Fed, it’s a massive meeting with everybody and their underlings. I cannot recall the last time a Chairman lost a vote, but if enough of the members were against a policy, they would go to him in private and tell him what the majority is thinking and the chairman will change his view to the majority’s before the meeting.

  9. Gravatar of Becky Hargrove Becky Hargrove
    30. April 2012 at 12:25

    Josiah, thanks for the link that was certainly interesting.

  10. Gravatar of Benjamin Cole Benjamin Cole
    30. April 2012 at 13:18

    I don’t know if Bernanke is a good guy or not. I just wish he would print a lot more money.

  11. Gravatar of Adam Adam
    30. April 2012 at 13:28

    Krugman’s been pretty forthcoming about the fact that he doesn’t read many economics blogs, so my guess would be he probably didn’t read you. I’d say sorry, but I’m not sure if it’s better to have him repeating you or just thinking the same things.

    As for Bernanke, I don’t think it’s at all naive to believe he thinks the things he said he believed before he took office. It should surprise no one that when you put him in a position where he’s restricted by both political forces and the weight of an organization, he has to make compromises.

  12. Gravatar of Benjamin Cole Benjamin Cole
    30. April 2012 at 14:45

    Market Monetarists need to learn to speak like Sam Zell.

    “Milken conference opens with a lot of blah-blah-blah*

    Often dubbed a smaller, duller version of Davos (another blah-blah fest), this year’s gathering started off with Sam Zell noting that “there is no ‘effing’ demand” in Europe.”

    –30–

    Sometimes blunt is good.

  13. Gravatar of Morgan Warstler Morgan Warstler
    30. April 2012 at 15:08

    Ron Paul handled Krugman far too easily.

    http://www.bloomberg.com/video/91689761/

    You people are nuts if you think you don’t HAVE to SELL NGDPLT to the small government conservatives.

    Crazy old Ron Paul – Jesus if you lose to him, if you don’t WIN HIM OVER, you get nada.

    You aren’t going get it any other way, how badly do you really want it?

  14. Gravatar of dwb dwb
    30. April 2012 at 15:13

    Fisher was on at the end. ill see if they post the video. he was in agreement with everything Bernanke said at the press conference (“exactly” “good job” “nailed it”). the reporters questions were softball though.

    all i really got was that he opposes QE because it lowers long term rates which in his opinion sends false signals to about fiscal (ir)responsibility.

    i guess it never occurred to him that getting UE down tp 5.5% would seriously reduce the deficit (to about 3% of gdp as i recall).

    o wish the reportet had askef some tough questions. he painted himself as the “lonesome hawk” not that Bernanke was the lonesome dove. he clearly said Nernamke was speaking for the collective committee.

  15. Gravatar of dwb dwb
    30. April 2012 at 15:16

    oh, i thought it was interesting when Friedman came up, Krugman said Friedman would be way to the left of Republicans these days (dont recall exact verbiage).

    yep.

  16. Gravatar of Morgan Warstler Morgan Warstler
    30. April 2012 at 17:42

    dwb,

    that’s bullsh*t. Every time any of you speak that way it makes you look seriously desperate.

    Friedman would be radically aggressive in supporting of my Guaranteed Income plan.

    It’s all of his “shut up the liberal moaners” negative income tax, but with:

    1. kick ass Internet style clearinghouse efficiency.

    2. Lower costs to operate. It ends all other kinds of aid – by its very natural workings. As such, it drives costs of government services down, and guts public employees down to Friedman style levels.

    Don’t convince yourself he was a monetarist first. He was a small government conservative…. his ideas were driven by almost outright hatred of government.

  17. Gravatar of ssumner ssumner
    30. April 2012 at 17:52

    Becky and beamish–thanks for the info.

    Negation, Very well put, once you start thinking about it the conclusion is obvious. The only question is whether his preferences are a tiny bit more dovish, or quite a bit more dovish.

    Morgan, Say he doesn’t know how much will be inflation–I say he takes his chances.

    Bill, I am now. But I’d guess Krugman and I differ as to where we are on it.

    Josiah, I’d have trouble even watching that.

    John Hall, I think that’s accurate.

    Ben, Me too.

    Adam, I agree with both your points. I’d add that he must read my blog at least once and a while, because he occasionally comments on my posts. But my sense is that it mostly occurs when someone else links to it.

    Ben, How does one get invited to a Milken conference?

    Morgan, Somehow I doubt Paul handled Paul easily.

    dwb. If Fisher loved the Bernanke press conference, then it was obviously a disaster.

  18. Gravatar of ChargerCarl ChargerCarl
    30. April 2012 at 18:15

    “Friedman would be radically aggressive in supporting of my Guaranteed Income plan.”

    Friedman would probably think its pointless when you can just get us back to full employment using boring old monetary policy. No need to invent crazy schemes.

  19. Gravatar of Thom Thom
    1. May 2012 at 00:14

    Some profile of PK by New Yorker (or NYT?) implied that PK intentionally overstates or exaggerates what he actually believes should be policy. The article called/implied it a political agenda? The idea being that media coverage of PK’s agenda can help centralist politicians to push back against the Far Right’s political agenda as they will be receiving criticism from the Left and Right.

  20. Gravatar of Jason Odegaard Jason Odegaard
    1. May 2012 at 01:54

    Scott,

    Don’t mean to be a killjoy, but I have heard Krugman use that same “I’m doing Bernanke a favor by criticizing him from the left” line for at least the past couple of years.

  21. Gravatar of Morgan Warstler Morgan Warstler
    1. May 2012 at 03:18

    Auctioning excess human labor that isn’t worth Minimum Wage in order to reduce the influence government AND the Fed is exactly Friedman.

    His Negative Income Tax, when he stepped away from it, it was because it would just be ANOTHER govt. program…. he wanted to replace all other AID.

    Mine has gorgeous DNA that will let bidders own greed drive public unions into the dirt.

    Mine achieves the end Friedman could not achieve.

    We can have full employment TODAY, spending less money, and therefore never needing to print a dime.

    Uncle Milty would love it.

    —-

    Scott, notice your squirrelling…

    1. You said Ben under truth serum would support NGDPLT.

    2. I said, not if the focus is getting more inflation, the focus of your plan needs to be the parts conservatives like.

    3. You are non-reponsive and answer back about your personal desires.

    It is always the same thing with you:

    Watch the video, Ron Paul easily handles DeKrugman. And he does it in the court of public opinion.

    WATCH IT.

    The point here is SINCE DeKrugman doesn’t make Paul look foolish to the avg. CNBC voter, YOU SCOTT have to focus 100% of your energies on winning over the Ron Paul crowd.

    If you can’t get the small govt. right on board with NGDPLT you lose.

    And you don’t need DeKrugman to win.

    In fact, you CAN’T win with DeKrugman on your team.

  22. Gravatar of Jason Odegaard Jason Odegaard
    1. May 2012 at 04:00

    Actually, I do have to agree that Morgan’s plan would be pretty close to something that Milton Friedman might support.

    At least from what I recall from his interviews, he favored just supplying money to poor people, if you wanted to help poor people at all. Why give them food stamps, or coupons for specific goods and services – don’t we trust them? Does that help create trust? If you want poor people to have more money, give them more money and be done with it. It’s a far more efficient government program than the alternative forms of aid.

    That’s what I recall from an interview I watched of Milton Friedman.

    Now Morgan does have a bidding aspect for labor that is interesting, but it does show a similarity to Friedman’s negative income tax in that it does require *work*.

    Morgan – I also watched the Paul v Paul video, and while I don’t think that Ron Paul won handily, I was disappointed Paul Krugman didn’t pin Ron Paul down more about the Milton Friedman view of monetary policy. Krugman did make the point that conservatives somehow skip the fact that the Fed caused the great depression due to inaction rather than action – and I think Krugman should have pounded that point home a bit more.

    From that point-of-view, it’s true that Milton Friedman would be left-wing in the current monetary policy debate. If the left-wing paid much attention to expansionary monetary policy, that is.

  23. Gravatar of StatsGuy StatsGuy
    1. May 2012 at 05:46

    I have a hypothesis: If Milton Friedman were in Bernanke’s position, he would be doing almost exactly what Bernanke is doing, maybe even less.

    As exhibit #1: Anna Schwartz.

  24. Gravatar of Major_Freedom Major_Freedom
    1. May 2012 at 05:58

    Statsguy:

    It depends on which Milton Friedman you’re talking about. If you’re talking about the old Friedman, he’d say end the fed. If you’re talking the somewhat younger Friedman, he’d say a fed computer should control the money supply. If you’re talking about the younger still Friedman, he’d say stabilize prices.

    He said this:

    “Any system which gives so much power and so much discretion to a few men, [so] that mistakes ‑‑ excusable or not ‑‑ can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic ‑‑ this is the key political argument against an independent central bank. . .To paraphrase Clemenceau: money is much too serious a matter to be left to the Central Bankers.”

    He also supported a Monetary Reform bill that said this:

    Sec. 4. ONE HUNDRED PERCENT (100%) RESERVE REQUIREMENT. Section 19(b)(2)(A-D) of the Federal Reserve Act is hereby amended to raise the Reserve Requirement ratio for financial institutions, in equal monthly increments of eight and one-half percent (8.5%), to one hundred percent (100%), during the said transition period.

    Sec. 15. WITHDRAWAL FROM INTERNATIONAL BANKS. It is hereby declared as a matter of federal statutory law that membership and/or participation of the United States government, or its agencies, or of the Federal Reserve Board or Reserve Banks or any officer or employee thereof, with the Bank for International Settlements, the International Monetary Fund, the World Bank, and all other international banks, is inconsistent with and in direct conflict with the purposes of this Act of Congress.

  25. Gravatar of Morgan Warstler Morgan Warstler
    1. May 2012 at 06:38

    That’s the thing here…

    Jason and MF and I KNOW WTF Friedman was really about.

    And if Scott wants to Uncle Milty and put he’s going to have to do so while throwing verbal napalm at the DeKrugman’s of the world.

    I’m being deeply and analytically serious:

    1. Liberals all KNOW that Scott is shitting on their heads from above with his intellectual execution of Fiscal.

    The litany of econ bloggers know what Scott is doing, he’s keeping them from getting to play technocrat on social safety net for the rest of their lives.

    Do you know how many of them called my GI plan, “Interesting?”

    That’s murmured praise for something bullet proof enough that NONE of them could take it down.

    The worst praise was me being called an MMT-er

    “Fascinating. I’m trying to think of downsides, and yet I can’t. I may turn MMT-er yet.

    Honest question—does anybody see any problems with this idea?”

    The point is econ bloggers are self-interested.

    Anything that reduces their personal long term influence into other people’s lives, even if it means bigger cash transfers in my case, or no more unemployment from boom / bust cycles in Scott’s case… will never get their support.

    The bulk of the econ blogosphere seeks influence without acquiring it in the free market. It is that straightforward.
    This is a fact: If the market was as free as their speech rights are…. to have influence, they’d mostly HAVE TO BLOG in support of small business, and against govt. policy that interferes with it.

    The point is Scott has already made his inroads, he has TESTED his plan for opposition response.

    BUT, the Ron Paul crowd, the John Papola crowd, the MF crowd…

    THESE GUYS CAN ALL BE WON. And small govt. conservatives are not true opponents of MM. When piush comes to shove, they all will get behind it for being better than status quo.

    So, it is OPTIMAL to now turn MM rhetoric to its true north point, adopt the full rhetorical Milton Friedman anti-govt. GUARANTEE of MM, and return as the prodigal son.

    2. Paul vs. DeKrugman was IMPORTANT. The reason it is important is that it proves how deeply impossible it is for anyone to really argue “inflation is good” and win in 2012.

    Scott tried to skip my #1 and banish the word from discussion… how’d that go?

    No, the point is that the MOST POWERFUL argument for NGDPLT is pissing on booms and forcing the govt. to become far more productive.

    People aren’t dumb.

    People when told UNDERSTAND that NGDPLT puts a nice tight cap on govt. fiscal irresponsibility.

    Under NGDPLT, everyone, and I mean everyone will view the number 4.5% as a cap.

    Like a cap on admissions or emissions, overnight we have 100% of the people aware that the economy will ONLY be allowed to grow 4.5% EVER, for EVER, and EVER, and EVER.

    The whole world changes then.

    1. No one will want inflation to eat that 4.5% up, so regulations that drive up prices will be hated.

    2. No one will want public employee raises to eat that 4.5% up, so…

    —–

    Look, you can accept Sumner needs Ron Paul either because his current audience is deeply politically biased against him altho they are nice to him…. so Scott must look elsewhere.

    Or you can accept it because the End-the-Fed crowd can actually be won over, they can become full throated supporters.

    But either way it means that Scott preaching the “inflation is good sometimes” part of his plan over and over is just friggin dumb.

  26. Gravatar of dwb dwb
    1. May 2012 at 07:02

    @Morgan
    that’s bullsh*t. Every time any of you speak that way it makes you look seriously desperate.

    the point is these days. about 8 years ago i would have said the opposite as the republicans spent their way to oblivion on some unfunded errant wars. Plus i’ve never really seen the evangenical cohort of the republican party as very consistent with small government. I do not think that, in general, the republicans have been constently small or big government (in actions), and at this monent there are some strange bedfellows trying to make a go of it: When it comes to Ayn Rand or Jesus, now thats some entertainment! Rand Paul has to pick, now which one will he choose….

  27. Gravatar of Major_Freedom Major_Freedom
    1. May 2012 at 07:24

    dwb:

    “the point is these days. about 8 years ago i would have said the opposite as the republicans spent their way to oblivion on some unfunded errant wars.”

    And these days you’re not saying the same thing as the democrats spend their way into oblivion on some unfunded errant wars.

  28. Gravatar of dwb dwb
    1. May 2012 at 07:29

    And these days you’re not saying the same thing as the democrats spend their way into oblivion on some unfunded errant wars.

    actually, i am: I’m an equal opportunity errant spending basher, its not a political thing. i call em like i see em regardless of party.

  29. Gravatar of Major_Freedom Major_Freedom
    1. May 2012 at 07:40

    Morgan:

    THESE GUYS CAN ALL BE WON. And small govt. conservatives are not true opponents of MM. When piush comes to shove, they all will get behind it for being better than status quo.

    Abolishing the Fed won’t be any easier if they are targeting NGDP instead of the current dual mandate.

    NGDP targeting does not contain any inherent anti-Fed principles, so it cannot possibly be a means of abolishing it.

    Furthermore, you will never get me on board with MM, for the same reason you will never get me on board with any other flavor of the month Fed inflation program.

    So, it is OPTIMAL to now turn MM rhetoric to its true north point, adopt the full rhetorical Milton Friedman anti-govt. GUARANTEE of MM, and return as the prodigal son.

    MM does not have any anti-government guarantee. The government can accumulate cash via debt monetization without spending the full amounts over time. Then at some point they can start spending a LOT, which then forces the Fed to remove LOTS of money from the private sector, so that NGDP doesn’t go over target. Government gets bigger.

    Lather, rinse, repeat.

    MM is anti-liberty and pro-big government.

    Your sentiments echo almost identically the sentiments of otherwise well meaning communists in the late 19th, early 20th century. They too thought that taking control away from the big Czars and the financial elite, and turning it over to only a small, nominally sized worker’s council, who will act as modest administrators, that this will get the world closer to personal freedom.

    Or, it’s like you’re a priest who believes he can turn everyone atheist by telling them to worship a smaller, less intrusive God.

    Extremism is the only antidote to extremist policies.

  30. Gravatar of Major_Freedom Major_Freedom
    1. May 2012 at 07:44

    dwb:

    actually, i am: I’m an equal opportunity errant spending basher, its not a political thing. i call em like i see em regardless of party.

    This is the funny image I get:

    “Republicans spending their way into oblivion! The other party? Yes, we have to criticize equally. Republicans spending their way into oblivion!”

  31. Gravatar of dwb dwb
    1. May 2012 at 08:01


    This is the funny image I get:

    “Republicans spending their way into oblivion! The other party? Yes, we have to criticize equally. Republicans spending their way into oblivion!”

    i still dont get your point, but i am glad you are developing a sense of humor.

  32. Gravatar of Major_Freedom Major_Freedom
    1. May 2012 at 08:50

    but i am glad you are developing a sense of humor.

    My evening job is doing stand up at the local funeral home.

  33. Gravatar of Morgan Warstler Morgan Warstler
    1. May 2012 at 10:30

    MF, you are already onboard.

    If your choice is status quo or MM, you’ll choose NGDPLT.

    It is better than status quo. ALL libertarians will admit that. It is not up for discussion. This is not pilpul.

    —-

    I have taken that argument further that Austrian ideas are more easily achieved from a MM platform.

    Once Fiscal Spending cannot HIDE, once it eats into our allotted growth cap, there will be less of it.

    Again, this a very easy thing to agree with.

    —–

    “Or, it’s like you’re a priest who believes he can turn everyone atheist by telling them to worship a smaller, less intrusive God.”

    This is dumb.

    I’m a guy who knows MM pushes the Overton Window on size of govt. back to the right.

    Look MF, eventually there is always default.

    But, the game afoot on the right has been “spending all the money” – very generally this is doing to Dems what Reagan did to the USSR.

    And NOW that all the money is spent… if we adopt a 4.5% cap on NGDP, we are locking down Monetary policy, so when the gutting happens, there is NO MORE comfort provided by the Fed.

    True hawks on the Fed will LOVE Sumner.

    Now you can piss and moan about lack of purity, but I’m not signing up for waiting for the crisis to explode, I’m going to hack into it as much as possible.

    Remember, my GI plan solves all of this.

  34. Gravatar of Morgan Warstler Morgan Warstler
    1. May 2012 at 14:43

    DeKrugman on Reddit doing AMA:

    http://www.reddit.com/r/IAmA/comments/t1ygb/iama_nobel_prizewinning_economist_and_new_york/

    Is toooooooooooo perfect. They 100% PROVE MY POINT.

    Friedman would never just say BUY ANYTHING to hit NGDPLT.

    He would rip off both their heads clean out their skulls and serve small government conservatives some tasty policy GUARANTEE of:

    NGDPLT = smaller govt.

    NGDPLT = no housing boom DeKrugman / supported in the early aughts

    NGDPLT = public employees eat it so hard DeKrugan no longer has a natural constituency.

    ——

    But we have no one with balls.

    There is no one who can FORCE DeKrugman to ADMIT they would hate NGDPLT and scream/kick/cry against it in practice.

    And so they lie, and they take the lord the Uncle Mitly’s name in vain.

    MM cannot hide from what it is… RED MEAT for well funded angry conservatives.

    Until you admit its true nature, it will be amateur hour.

  35. Gravatar of Jason Odegaard Jason Odegaard
    1. May 2012 at 18:19

    I’m glad someone asked them about NGDP targeting, as I didn’t see the Reddit AMA until it was over. And here’s his answer:

    Question (Silent_Storm):
    Hi Dr. Krugman. How do you feel about NGDP targeting, and do you think there’ll be a QE3 anytime soon?

    Answer (nytimeskrugman):
    I don’t share the view that there’s some fundamental reason why NGDP is better than other ways to make the Fed take its dual mandate seriously; price level targeting, or just a symmetric treatment of unemployment and inflation, could be better in principle.
    But I do see the point that nominal GDP targeting (for those who have no idea what this is about) could be a way to de facto raise the inflation target without saying so. So I’m OK with it as an idea.
    About QE3: God knows. Logically, the Fed should do it. But logically the Fed should be doing lots of stuff it isn’t.

  36. Gravatar of Benjamin Cole Benjamin Cole
    1. May 2012 at 20:35

    http://www.econ2.jhu.edu/People/Ball/BB%20and%20ZB.pdf

    A long piece on Bernanke morphing into his staff.

    If true, it suggest that Fed staff should receive pat linked to real GDP growth.

  37. Gravatar of ssumner ssumner
    2. May 2012 at 15:18

    Thom, Do you have a link?

    Jason, So have I. But I agree he probably came up with the idea independently–it’s an obvious thing to say.

    Morgan, I’m focusing on changing the views of Fed presidents, like Evans.

    Statsguy, Schwartz is repudiating the views she expressed in the Monetary History, but doesn’t seem to realize it. Milton Friedman would have realized it, and wouldn’t have suddenly become an Austrian like Schwartz seems to have become.

    Ben, That sounds amusing.

  38. Gravatar of Major_Freedom Major_Freedom
    7. May 2012 at 19:59

    Morgan:

    MF, you are already onboard.

    If your choice is status quo or MM, you’ll choose NGDPLT.

    It is better than status quo. ALL libertarians will admit that. It is not up for discussion. This is not pilpul.

    This is like saying 10 rapes a week is better than 20 rapes a week.

    I don’t see how advocating for a permanent 10 rapes a week solves the problem of rape.

    You’re presenting me with a false choice. Status quo or NGDPLT will both result in an eventual destruction of the monetary system. Telling me that one gets us into the abyss a little slower than the other is not any reason at all to advocate for it as a permanent policy.

    I have taken that argument further that Austrian ideas are more easily achieved from a MM platform.

    Once Fiscal Spending cannot HIDE, once it eats into our allotted growth cap, there will be less of it.

    Fiscal spending cannot hide now, and yet it is growing and has been growing.

    Again, this a very easy thing to agree with.

    It actually isn’t. You’re asking me to endorse something I know is inherently destructive.

    “Or, it’s like you’re a priest who believes he can turn everyone atheist by telling them to worship a smaller, less intrusive God.”

    This is dumb.

    I’m a guy who knows MM pushes the Overton Window on size of govt. back to the right.

    Can’t do that when you advocate for a state to borrow cheap money from its on money printer.

    Look MF, eventually there is always default.

    So why not advocate for a solution that does not have a default?

    But, the game afoot on the right has been “spending all the money” – very generally this is doing to Dems what Reagan did to the USSR.

    And NOW that all the money is spent… if we adopt a 4.5% cap on NGDP, we are locking down Monetary policy, so when the gutting happens, there is NO MORE comfort provided by the Fed.

    Comfort is destructively provided by inflation that targets spending.

    True hawks on the Fed will LOVE Sumner.

    Not this hawk.

    Now you can piss and moan about lack of purity, but I’m not signing up for waiting for the crisis to explode, I’m going to hack into it as much as possible.

    Only my solution can avoid a currency crisis. Yours cannot. Your solution will create a currency crisis by destroying the demand for money that is desperately needed as an accompaniment to distortions created by inflation.

    You are ignoring the problems that build up over time because of inflation. Even if spending growth is “capped.”

    Remember, my GI plan solves all of this.

    I thought I already pointed out the flaws in that.

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