A sad day for India

Although I don’t agree with Mr Modi’s political views, I had hoped that he might reform India’s economy.  Unfortunately, right wing nationalists almost never opt for neoliberal policy reforms, it’s just not in their nature.

Today, the print addition of The Economist came out with an editorial asking the Modi government to reappoint Raghuram Rajan as head of the RBI.  Unfortunately, the government decided to go in a different direction, despite Rajan recently being named central banker of the year.  He brought Indian inflation down to more modest levels, without damaging India’s growth (which was 7.9% in the most recent quarter).  Rajan was also a powerful voice for economic reform, which may have been the problem.  The Economist editorial hinted at the opposition he faced:

Various Rajan devoted pages on Facebook have a combined fandom of over 250,000 people. Janet Yellen and Mario Draghi, his all-powerful counterparts in America and Europe respectively, cannot muster 10,000 thumbs-up between them.

Such adulation makes many suspicious. Mr Rajan has come under sometimes ugly attack from within Mr Modi’s BJP party. One member of parliament has described him as “mentally not fully Indian” on account of his international career.

I guess someone who is not satisfied with the Indian subcontinent being mired in poverty is not truly “Indian”.

An article in Quartz by Harish Menon listed some tweets lamenting the government’s decision:

Screen Shot 2016-06-18 at 5.30.21 PM

Lesson for right wingers—don’t make a pact with the devil.  If a politician is bigoted against unpopular groups like Muslims, don’t believe his promises to make the country great.  The same (non-utilitarian) mentality that leads to bigotry, also leads to the path of crony capitalism, not utilitarian neoliberalism.

A sad day for India.

Screen Shot 2016-06-18 at 5.32.36 PM


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91 Responses to “A sad day for India”

  1. Gravatar of E. Harding E. Harding
    18. June 2016 at 14:00

    Can we please wait to see how this guy’s replacement will perform, first, before whining and moaning?

    “Lesson for right wingers—don’t make a pact with the devil.”

    -Don’t worry. We’re not With Her. Or With Stupid.

    “If a politician is bigoted against unpopular groups like Muslims, don’t believe his promises to make the country great.”

    -And if a politician isn’t bigoted against unpopular groups like Muslims? Should we believe Her promises then?

    BTW, the Muslim ban is an excellent idea. Highly recommend. Our country’s ethnic balance should not be trifled with.

    “The same (non-utilitarian) mentality that leads to bigotry,”

    -What’s “non-utilitarian” about temporarily banning a group of people prone to violence from entering the country?

  2. Gravatar of E. Harding E. Harding
    18. June 2016 at 14:08

    Make America Great Again!

  3. Gravatar of Michael Michael
    18. June 2016 at 14:50

    R. Kipling
    A LEGEND OF THE FOREIGN OFFICE

    This is the reason why Rustum Beg,
    Rajah of Kolazai,
    Drinketh the “simpkin” (Champagne) and brandy peg,
    Maketh the money to fly,
    Vexeth a Government, tender and kind,
    Also—but this is a detail—blind.

    Rustum Beg of Kolazai—slightly backward Native State—
    Lusted for a C. S. I. (a high order of knighthood) —so began to sanitate.
    Built a Gaol and Hospital—nearly built a City drain—
    Till his faithful subjects all thought their ruler was insane.

    Strange departures made he then—yea, Departments stranger still,
    Half a dozen Englishmen helped the Rajah with a will,
    Talked of noble aims and high, hinted of a future fine
    For the State of Kolazai, on a strictly Western line.

    Rajah Rustum held his peace; lowered octroi dues one half;
    Organized a State Police; purified the Civil Staff;
    Settled cess and tax afresh in a very liberal way;
    Cut temptations of the flesh—also cut the Bukhshi’s pay;

    Roused his Secretariat to a fine Mahratta fury,
    By a Hookum hinting at supervision of dasturi;
    Turned the State of Kolazai very nearly upside-down;
    When the end of May was nigh waited his achievement crown.

    Then the Birthday honours came. Sad to state and sad to see,
    Stood against the Rajah’s name nothing more than C. I. E.!
    (a lower order of decoration)
    ········

    Things were lively for a week in the State of Kolazai,
    Even now the people speak of that time regretfully;

    How he disendowed the Gaol—stopped at once the City drain;
    Turned to beauty fair and frail—got his senses back again;
    Doubled taxes, cesses all; cleared away each new-built thana (police station);
    Turned the two-lakh Hospital into a superb Zenana (brothel);

    Heaped upon the Bukhshi Sahib wealth and honours manifold;
    Clad himself in Eastern garb—squeezed his people as of old.
    Happy, happy Kolazai! Never more will Rustum Beg
    Play to catch the Viceroy’s eye. He prefers the “simpkin” peg.

  4. Gravatar of Art Deco Art Deco
    18. June 2016 at 15:08

    If a politician is bigoted against unpopular groups like Muslims, don’t believe his promises to make the country great. The same (non-utilitarian) mentality that leads to bigotry, also leads to the path of crony capitalism, not utilitarian neoliberalism.

    What’s the motto of the Mercatus Center? “Recycling Cant so You Don’t Have To”?

  5. Gravatar of Bill Ellis Bill Ellis
    18. June 2016 at 15:46

    How much crony capitalism around the world is perpetrated by people who see themselves as living out a libertarian Ideal…and don’t see it as the grotesque and elitist form of libertarianism it truly is ?

    It’s a mask that can tempt anyone…it’s so great to see when you look in the mirror.

  6. Gravatar of Benjamin Cole Benjamin Cole
    18. June 2016 at 16:00

    One of the main complaints against Rajan was that he was keeping interest rates too high.

    Rajan’s first move in office was to (reflexively) raise rates, which he quickly reversed….shades of the ECB.

    Rajan is regarded as a top-knotch academic, and yet he also is the University of Chicago guy who mentions inflation in the first sentence of any conversation.

    Rajan may have lacked political skills. Volcker endured in an environment of nationalists and protectionists, accomplishing what he could despite enormous compromises. Rajan said on departing he belongs in the world of ideas. He is expected to leave India, thus aggravating suspicions of his true loyalties. To be a globalist is fine, but is that appealing to Indians?

    Oddly enough, the nationalists may be right on Rajan. Now is not the time to worry about inflation.

  7. Gravatar of Mike Sax Mike Sax
    18. June 2016 at 16:10

    O/T: If Brexit wins do you think this drives the pound down further?

  8. Gravatar of Major.Freedom Major.Freedom
    18. June 2016 at 18:14

    “The same (non-utilitarian) mentality that leads to bigotry, also leads to the path of crony capitalism, not utilitarian neoliberalism.”

    Sumner, you don’t seem to grasp utilitarianism much do you? Utilitarianism leads to bigotry and crony capitalism. As utilitarianism only values what is good for “most people”, rather than the individual, that ethic requires whoever enforces it to select, that is, discriminate against, that is, become bigoted towards, a subset of the population of individuals on the basis of some shared common characteristic(s).

    The first, and most important [change], occurring in the early to mid-nineteenth century, was the abandonment of the philosophy of natural rights, and its replacement by technocratic utilitarianism. Instead of liberty grounded on the imperative morality of each individual’s right to person and property, that is, instead of liberty being sought primarily on the basis of right and justice, utilitarianism preferred liberty as generally the best way to achieve a vaguely defined general welfare or common good. There were two grave consequences of this shift from natural rights to utilitarianism. First, the purity of the goal, the consistency of the principle, was inevitably shattered. For whereas the natural-rights libertarian seeking morality and justice cleaves militantly to pure principle, the utilitarian only values liberty as an ad hoc expedient. And since expediency can and does shift with the wind, it will become easy for the utilitarian in his cool calculus of cost and benefit to plump for statism in ad hoc case after case, and thus to give principle away. Indeed, this is precisely what happened to the Benthamite utilitarians in England: beginning with ad hoc libertarianism and laissez-faire, they found it ever easier to slide further and further into statism. An example was the drive for an “efficient” and therefore strong civil service and executive power, an efficiency that took precedence, indeed replaced, any concept of justice or right.

    Second, and equally important, it is rare indeed ever to find a utilitarian who is also radical, who burns for immediate abolition of evil and coercion. Utilitarians, with their devotion to expediency, almost inevitably oppose any sort of upsetting or radical change. There have been no utilitarian revolutionaries. Hence, utilitarians are never immediate abolitionists. The abolitionist is such because he wishes to eliminate wrong and injustice as rapidly as possible. In choosing this goal, there is no room for cool, ad hoc weighing of cost and benefit. Hence, the classical liberal utilitarians abandoned radicalism and became mere gradualist reformers. But in becoming reformers, they also put themselves inevitably into the position of advisers and efficiency experts to the State. In other words, they inevitably came to abandon libertarian principle as well as a principled libertarian strategy. The utilitarians wound up as apologists for the existing order, for the status quo, and hence were all too open to the charge by socialists and progressive corporatists that they were mere narrow-minded and conservative opponents of any and all change. Thus, starting as radicals and revolutionaries, as the polar opposites of conservatives, the classical liberals wound up as the image of the thing they had fought.

    This utilitarian crippling of libertarianism is still with us. Thus, in the early days of economic thought, utilitarianism captured free-market economics with the influence of Bentham and Ricardo, and this influence is today fully as strong as ever. Current free-market economics is all too rife with appeals to gradualism; with scorn for ethics, justice, and consistent principle; and with a willingness to abandon free-market principles at the drop of a cost-benefit hat. Hence, current free-market economics is generally envisioned by intellectuals as merely apologetics for a slightly modified status quo, and all too often such charges are correct.

    – Rothbard

  9. Gravatar of Major.Freedom Major.Freedom
    18. June 2016 at 18:21

    More in-depth critique of utilitarianism:

    https://mises.org/library/utilitarian-free-market-economics

  10. Gravatar of Ray Lopez Ray Lopez
    19. June 2016 at 02:51

    First, money is largely neutral so whatever Rajan did is irrelevant. Second, Rajan is a Chicago man who meddles in politics, so Sumner’s idealism about him is misplaced. This comment from The Economist rings true:

    Sanman: “Oh come on, people – in a severely under-developed country like India, inflation is mainly rooted in the fact that India doesn’t produce enough of the basic things its people want and need. There’s just not enough manufacturing going on in the country – not enough by a long shot. Inflation in manufacturing-deficient India is *NOT* due to excessive demand, but overwhelmingly due to paucity of production. What India clearly needs is Supply-Side Economics. Rajan should have used the Saudi-initiated oil price plunge as latitude to lower rates. This could have provided much-needed stimulus to get the Indian economy out of the doldrums. Instead, Rajan lagged while others like China immediately seized the opportunity and reaped the benefits. He also shouldn’t have made comments about tolerance which were pounced upon by rival parties during the pivotal Bihar elections. You’d never see Janet Yellen commenting on US election issues, or she’d be fired in a heartbeat. What made Rajan think he had a right to shoot his mouth off like that? What was he thinking? Ridiculous.”

  11. Gravatar of Scott Freelander Scott Freelander
    19. June 2016 at 04:39

    Scott,

    I’m somewhat surprised at your reaction. Rajan gave absolutely terrible advice to central banks for years during and after the Great Recession, before joining the RBI. He was one of those inflation hawks warning that high inflation was just around the corner. He made a fool of himself.

    Also, while at the RBI, Rajan was routinely very impolitic with remarks, which some may like, but I personally cringe when central bankers make public pronouncements outside of managing nominal spending. Yes, the Indian government is very corrupt and the economic policy is very inefficient, but I don’t think it’s the job of a central banker to comment or otherwise try to influence anything outside of monetary policy. Better to excel at the job at hand, develop a solid reputation within the country, and then use that influence after leaving the RBI.

    I realize that India needed and needs lower inflation, but a perma-hawk would hurt them severely eventually, and the risk was not symmetric in India’s favor. Rajan would better serve India in a role in which he could influence improvements on the supply-side of the economy.

    He was the wrong man for that job.

  12. Gravatar of Scott Freelander Scott Freelander
    19. June 2016 at 05:13

    By the way Trumpista bigots,

    Here’s evidence of the result of words and actions by your hero:

    https://twitter.com/JYSexton?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

    He reported disturbing bigoted crowd chants, violence, and now he’s being harassed himself by idiot Trump followers.

  13. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    19. June 2016 at 05:35

    A different opinion;

    http://thewire.in/42392/raghuram-rajan-has-got-it-wrong-on-inflation-and-interest-rates/

    ————–quote—————
    …[India’s] inflation, measured by its most comprehensive yardstick, the GDP deflator, has been virtually zero for the last two years, and the economy has shown absolutely no sign of reviving. On the contrary every single physical indicator – abandoned projects, accelerating bankruptcy in the corporate sector, a log-jammed financial system, and a near-zero growth in employment, shows that it is being locked ever tighter in the grip of stagnation.

    Thus, before extending his term it is imperative to decide whether he has been the Indian economy’s saviour, or its destroyer. Rajan could have been be judged its saviour without a moment’s hesitation, if India’s inflation had been high, if the high inflation invariably slows down growth and employment generation (or makes it unsustainable), and if there had indeed been no other way of bringing it down except by raising interest rates. If even one of the answers is a negative it invalidates every premise upon which the RBI has determined interest rates in the past five years and makes the UPA, and BJP, governments guilty of having wantonly forsaken not only economic growth, but also denied poor families the chance of offsetting the inflation by securing more employment or higher money wages.
    —————endquote————–

  14. Gravatar of Mike Sax Mike Sax
    19. June 2016 at 06:00

    So according to Rothbard, we had natural rights in the age of absolute monarchs and only got away from it with the rise of democracy.

    Interesting.

  15. Gravatar of Art Deco Art Deco
    19. June 2016 at 07:05

    So according to Rothbard, we had natural rights in the age of absolute monarchs and only got away from it with the rise of democracy.

    Rothbard also once said that the Truman Administration was entirely responsible for the Cold War and that Soviet Russia was an aggrieved party. He also once said that Soviet Russia was to be preferred to the United States because Laventy Beria had been executed while J. Edgar Hoover was still in office.

  16. Gravatar of Philo Philo
    19. June 2016 at 07:36

    @ Art Deco:

    Looking just at the fates of Beria and Hoover, I say: Score one for the Soviet Union!

  17. Gravatar of Art Deco Art Deco
    19. June 2016 at 07:46

    Looking just at the fates of Beria and Hoover, I say: Score one for the Soviet Union!

    You’re operating under the illusion that this sentence makes any sense at all.

  18. Gravatar of E. Harding E. Harding
    19. June 2016 at 09:39

    @Scott Freelander

    -You should read my Marginal Counterrevolution. And understand that Black people are generally untrustworthy, as I have found throughout my experience. Especially academic hack ones who really need to be taken down a notch. Especially those who say stuff like this: “Jared Sexton argues that multiracialism evokes long-standing tenets of antiblackness and prescriptions for normative sexuality”.

    https://goo.gl/3Rcvdh

    In the honorable words of Roissy, most of this is shitthatneverhappened.txt . But it would have been awesome if it actually did happen.

    https://heartiste.wordpress.com/2016/06/17/trumpentroopers-trigger-faggy-manboob/

  19. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 09:39

    Mike Sax:

    “So according to Rothbard, we had natural rights in the age of absolute monarchs and only got away from it with the rise of democracy.”

    No, Rothbard thought every individual has had natural rights since the dawn of humanity, and that both monarchical rule and Democratic rule violates those rights. Rothbard critiqued Kings in his works for precisely this reason.

    What he as referring to in the passages above is the movement away from natural law and towards utilitarianism as the correct understanding of rights among philosophers and intellectuals. This intellectual shift marked the point at which any hope of improving natural law in the practical arena was lost.

    This is not equivalent to the shift from Monarchy to Democracy, although there are connections which I won’t go into here.

  20. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 09:41

    Art Deco:

    “Rothbard also once said that the Truman Administration was entirely responsible for the Cold War and that Soviet Russia was an aggrieved party. He also once said that Soviet Russia was to be preferred to the United States because Laventy Beria had been executed while J. Edgar Hoover was still in office.”

    Is that supposed to be your version of ad hominem tu quoque?

    Note that not everyone is right about everything all the time, and more relevantly, if someone is wrong about own thing in one context, it doesn’t mean they are wrong about everything else. It is up to your mind to distingush.

  21. Gravatar of Scott Freelander Scott Freelander
    19. June 2016 at 09:42

    “And understand that Black people are generally untrustworthy, as I have found throughout my experience.”

    I liked it better when the racists were in the closet, but at least now we know who they are. Harding, why not use your full real name and stop being such a coward? Let the world know what a racist you are.

  22. Gravatar of E. Harding E. Harding
    19. June 2016 at 09:44

    And understand that Black people are generally untrustworthy, as I have found throughout my experience. Especially academic hack ones who really need to be taken down a notch. Especially those who say stuff like this: “Jared Sexton argues that multiracialism evokes long-standing tenets of antiblackness and prescriptions for normative sexuality”.

    -Wrong Sexton. Same level of hackery.

  23. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 09:44

    Art Deco,

    FYI, you did not actually refute what Rothbard wrote about the Cold War. Merely repeating it isn’t even a challenge.

  24. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 09:49

    Scott Freelander:

    Perhaps you have confused yourself ino believing that your rants against Trump supporters are somehow not themselves bigoted.

    News flash: They are. But your bigotry must be a “good” bigotry, amiright?

  25. Gravatar of E. Harding E. Harding
    19. June 2016 at 09:49

    “Harding, why not use your full real name and stop being such a coward?”

    -Why? America is institutionally anti-White-racist. It is usually not a good idea for someone with such redpilled views as mine to mix online and personal lives, to the detriment of both. These days, only the most dull person ever can go without an alias without either tenure or Koch funding. And I have neither.

  26. Gravatar of Art Deco Art Deco
    19. June 2016 at 10:01

    And understand that Black people are generally untrustworthy, as I have found throughout my experience. Especially academic hack ones who really need to be taken down a notch. Especially those who say stuff like this: “Jared Sexton argues that multiracialism evokes long-standing tenets of antiblackness and prescriptions for normative sexuality”.

    A comfortable majority of blacks are tertiary sector workers with circumscribed ambitions and somewhat messy domestic lives (i.e. children in a household usually have different fathers). There’s nothing ‘untrustworthy’ about blacks-in-general.

  27. Gravatar of Art Deco Art Deco
    19. June 2016 at 10:06

    FYI, you did not actually refute what Rothbard wrote about the Cold War. Merely repeating it isn’t even a challenge.

    No, Major, I’m not going to compress the text of John Lewis Gaddis’ work into a blog comment. If you want to study the subject, there’s nothing preventing you.

    To anyone remotely familiar with the history of that era (and Rothbard in 1962 was writing for audiences who had lived through the period not long past), these statements were absurd on positive and normative grounds. Ad hom? You want to quote Rothbard as an authority. Unlike the bus drivers and postal clerks E. Harding so despises, Murray Rothbard really was untrustworthy.

  28. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 10:27

    Art Deco:

    “No, Major, I’m not going to compress the text of John Lewis Gaddis’ work into a blog comment. If you want to study the subject, there’s nothing preventing you.”

    I already have, and correct me if this is wrong, but I never actually sanctioned or agreed with Rothbard about USSR-US relations. All I did was say that your response was ad hominem tu quoque.

    “To anyone remotely familiar with the history of that era (and Rothbard in 1962 was writing for audiences who had lived through the period not long past), these statements were absurd on positive and normative grounds.”

    That is yet another argumentative fallacy. This is an appeal to ad populum, or appeal to authority.

    “Ad hom? You want to quote Rothbard as an authority. Unlike the bus drivers and postal clerks E. Harding so despises”

    No, I quoted Rothbard’s theory of utilitarianism because I agree with the argument itself. Anyone could have written those passages and I still would have made the same conclusion. You can convince me you wrote it and I still would have agreed with it.

    “Murray Rothbard really was untrustworthy.”

    Right, because you need to accept things on faith. That is precisely why you posted Rothbard’s position on the USSR. It doesn’t matter whether the argument on utilitarianism is, based on reason and logic (your responsibility), actually correct or not, what matters for the faithful is whether the PERSON who speaks is “trustworthy” or not. You need to find faith in that person as a prophet or sage, or else their argument, which can be critiqued on its own regardless of the trustworthiness of the person who says it, cannot be judged by you as correct or incorrect.

    In other words, you are trying to convince yourself and others that the arguments above against utilitarianism, should not be analyzed or critiqued or even thought about, not because the arguments themselves are wrong and in what way, but because the person who wrote them had a view of USSR – US relations that differed from what another author wrote about it, and what you believe about it.

    You still have not refuted any of the arguments above, neither the arguments against utilitarianism nor the arguments about the USSR-US relations.

  29. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 10:33

    According to Art Deco’s fallacious worldview, I am justified in rejecting everything Scott Sumner wrote, on the basis that I disagree with his political views about Sioux-Apache relations in what is now Jerkwater USA.

    Whew! That is so much easier that actually engaging what he writes about monetary policy in the 21st century.

    Cult of personality much there, Art?

  30. Gravatar of Philo Philo
    19. June 2016 at 11:30

    @ Art Deco:

    Try this: Beria deserved to be executed and Hoover did not deserve the honors and power he was given. Thus in this instance the Soviet government acted more appropriately than did the American government.

  31. Gravatar of Art Deco Art Deco
    19. June 2016 at 12:02

    All I did was say that your response was ad hominem tu quoque.

    It was neither. It was a summary of Rothbard’s views of current history, and an example of what kind of mind he has.

    Try this: Beria deserved to be executed and Hoover did not deserve the honors and power he was given. Thus in this instance the Soviet government acted more appropriately than did the American government.

    What, because we didn’t summarily execute the chief of the federal police? Aside from the dubious memes which float about (Hoover the homosexual, Hoover with shit files on politicians in his outer office), the complaints about Hoover concern turning over arguably confidential information to private employers (e.g. agents showing up at Jessica Mitford’s workplace to talk with her supervisor), warrantless wiretapping during the period running from 1960 to 1971, and infiltrating elements of the domestic opposition and disrupting their activities (see PJ O’Rourke’s account of running a student newspaper ca. 1968). It’s doubtful either the president or the attorney-general knew much about any of this and Kennedy and Johnson had severely compromised themselves with their own misbehavior. Now, where I grew up, unlawful surveillance is a class E felony with a maximum sentence of 16 months to 4 years in prison, not a capital crime. Regrettable as it is that Jessica Mitford got fired from her job selling classified ads, it’s pretty small potatoes compared to the gulag.

    According to Art Deco’s fallacious worldview,

    Major Freedom, I’ll interrupt one of your exercises in pseudo-epistemology to point out that the original commenter gave an example of Rothbard saying something perverse and I offered two more examples. Saying perverse things was a hobby of Murray Rothbard’s.

  32. Gravatar of Art Deco Art Deco
    19. June 2016 at 12:07

    Right, because you need to accept things on faith.

    Major, life is lived socially and people drawn on the knowledge and study of others. That is true of anyone who engages in a serious scholarly enterprise, even mathematics.

  33. Gravatar of ssumner ssumner
    19. June 2016 at 12:07

    Michael, Thanks, That’s wonderful.

    Ben, Not every country has excessively low inflation.

    Scott, You said:

    “but a perma-hawk would hurt them severely eventually,”

    Maybe in 100 years, bur for the foreseeable future India’s problems are supply side. Rajan was helping India.

    Patrick, That’s a very misleading article. India’s RGDP growth is at 7.9% and rising. They have 5% inflation. The rupee’s been declining for many decades.

    The claim that India has suffered from “tight money” for the past 12 years is bizarre.

    Harding, I am sure that Trump appreciates how you and other Trump supporters are trying to promote his cause on the internet.

  34. Gravatar of Ray Lopez Ray Lopez
    19. June 2016 at 12:18

    OT- what’s wrong with this paragraph? Written by an esteemed historian, R. Hofstadter, “The Am. Political Tradition” (1948), p. 79 [after Andrew Jackson removed Fed support from Biddle’s U.S. Bank] “Biddle, in the course of a fight to get the federal deposits back, brought about a short-lived but severe depression through restriction of credit….no sooner did this artificial depression end than an inflationary movement began.”

    You have to hand it to the monetarists: even reputable historians have fallen into their trap of money non-neutrality. And back in the days (19th century) monetarism was all the rage in politics too: 1832 with Jackson and Biddle, 1896 with the Cross of Gold Bryant speech. Poor Sumner, he’s a man ahead of his times: the 19th century.

  35. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 12:36

    Art Deco:

    “It was neither. It was a summary of Rothbard’s views of current history, and an example of what kind of mind he has.”

    That is an argumentative fallacy. You are not refuting argument X by pointing to the person’s beliefs about argument Y.

    The argument is about Utilitarianism. It is not about “the kind of mind” anyone has.

    “Major Freedom, I’ll interrupt one of your exercises…”

    You cannot “interrupt” a post partway through that has already been submitted in full.

    “…the original commenter gave an example of Rothbard saying something perverse and I offered two more examples. Saying perverse things was a hobby of Murray Rothbard’s.”

    I see you are confused. I was the original commenter who referenced a passage about Utilitarianism (which you have not even engaged, let alone refuted) quoting Rothbard.

    Setting an arbitrary, undefined meaning for “perverse” does not constitute a refutation of that argument. What is “perverse” to you may very well be true.

    To cite arguments Y and Z, in response to argument X, does not constitute a refutation of argument X.

    “Major, life is lived socially and people drawn on the knowledge and study of others. That is true of anyone who engages in a serious scholarly enterprise, even mathematics.”

    But then why haven’t you “drawn on the knowledge and study” of Rothbard and accepted the argument about Utilitarianism as correct? What knowledge about Utilitarianism have you “drawn on” that allowed you to rationally conclude the above passage is not correct?

    Mathematics requires individuals to think for themselves you know.

    What value do you offer if all you believe yourself capable of doing is avoiding the argument about Utilitarianism, and quoting instead what third parties say about another, different argument that just so happened to have been made by the same person who made the argument about Utilitarianism?

    Where is all this “knowledge and study” of Utilitarianism you are drawing on when…I can’t even say “responding to” because you are not even doing that…posting what you are posting? Is that your only contribution here about Utilitarianism? Posting the name of an author who wrote a book about USSR-US relations? Are you drunk?

  36. Gravatar of E. Harding E. Harding
    19. June 2016 at 13:04

    @Sumner

    I am sure that Hillary appreciates how you and other Hillary supporters are trying to promote Her cause on the internet.

  37. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 13:07

    Harding, come on, Sumner supports Johnson.

    Gee whizz.

  38. Gravatar of Postkey Postkey
    19. June 2016 at 13:23

    “Nevertheless, the neoclassical demand for structural reform became mainstream opinion and thus the Japanese government embarked on a major structural reform programme during the 1990s, including several thousand deregulatory measures, administrative reforms and the ‘Big Bang’ liberalization of financial markets. Yet there is no evidence that these structural reforms boosted economic growth. To the contrary, the empirical relationship between economic performance on the one hand and deregulation, abolition of cartels and greater market reform on the other has been quite the opposite of what neoclassical economics proclaims: when Japan significantly increased the number of cartels in its economy during the 1950s, economic growth accelerated sharply. It is less well-known that structural reforms towards greater market orientation were already started in the 1970s – under US political pressure – resulting in the scrapping of cartels and a steadily growing role for market forces. Thus the number of cartels fell sharply during the 1970s. When the structural reform programme accelerated during the 1980s and 1990s, the number of cartels came down further, finally dropping to zero. However, this shift away from the cartelized Japanese economic structure to a market-oriented economic structure was not accompanied by higher economic growth, as the neoclassical theories had predicted. To the contrary, as the number of cartels fell, so did economic growth. The decade of zero cartels was also when GDP growth dropped to zero.”

    http://www.palgraveconnect.com/pc/doifinder/view/10.1057/9780230506077

  39. Gravatar of E. Harding E. Harding
    19. June 2016 at 15:16

    Freedom, now is not the time for third parties who haven’t won a single electoral vote in their forty-year electoral history.

  40. Gravatar of E. Harding E. Harding
    19. June 2016 at 15:21

    *Fairly. One faithless elector in VA doesn’t do it.

  41. Gravatar of E. Harding E. Harding
    19. June 2016 at 15:29

    “There’s nothing ‘untrustworthy’ about blacks-in-general.”

    -Most Black people disagree:

    http://www.pewresearch.org/fact-tank/2016/04/13/americans-divided-on-how-much-they-trust-their-neighbors/

  42. Gravatar of Benjamin Cole Benjamin Cole
    19. June 2016 at 15:50

    Postkey: it is remarkable. The US experienced very strong growth in the 1950-60s, in an economy characterized by unions, heavy regulations on transportation, communications and banking, a top tax rate of 90%, the Big 3 and Big Steel, pre-Wall Mart and very little international trade.

    It does make one wonder.

    Tyler Cowen posted a blurb on German companies offshoring employment. Japan offshores manufacturing to Thailand.

  43. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 16:19

    E. Harding:

    “Freedom, now is not the time for third parties who haven’t won a single electoral vote in their forty-year electoral history.”

    That is dubious logic because that number of years cannot ever become lower than what has already transpired. Should a third party win, it will by historical fact be the “first time it has won in X years”.

    Also, that dubious logic sanctions and justifies continued slavery before slave emancipation. A slave master could always say “Now is not the time for slave emancipation, since it has never before occurred.”

    Can everyone just think logically before posting? It could help just a little.

  44. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 16:20

    E. Harding:

    Why don’t you just accept the fact that you were wrong to call Sumner a Hillary supporter? Why the red herring?

  45. Gravatar of Massimo Heitor Massimo Heitor
    19. June 2016 at 16:25

    A recent headline from Salon (I’m not completely serious):

    “Noam Chomsky: Donald Trump is a natural product of neoliberalism”

    Ted Cruz was both a right wing nationalist and a very devout free market neoliberal. I don’t think those two groups are completely opposed. Trump has very neoliberal economic advisors on his team.

  46. Gravatar of E. Harding E. Harding
    19. June 2016 at 16:45

    Freedom, if you weren’t paying attention, Sumner endorsed Johnson in the safe states, and endorsed Hillary in the swing states. That’s supporting Hillary. I was not wrong.

    The right time for testing out whether a party that has won only one one electoral vote in its entire history can win more is in an unimportant election, like 2012 or 1972. Not in an important one, like 2016.

    “Here’s a suggestion: When a politician runs on a platform of opposition to reforming runaway social programs and opposition to free trade and investment, don’t assume they are going to implement free market policies if elected, just because they represent the “right-wing” party.”

    -No s***, Sherlock. Landon was still more free-market than FDR in 1936, despite running on “a platform of opposition to reforming runaway social programs and opposition to free trade and investment”.

  47. Gravatar of engineer engineer
    19. June 2016 at 17:03

    “Postkey: it is remarkable. The US experienced very strong growth in the 1950-60s, in an economy characterized by unions, heavy regulations on transportation, communications and banking, a top tax rate of 90%, the Big 3 and Big Steel, pre-Wall Mart and very little international trade.”

    Differences off the top of my head….
    – Growth was/is easy to measure, quality of life improvements are not. Today’s innovations have more to do with quality of life, not with wealth creation. How do you measure the productivity gain from winning the war on cancer? (probably results in a loss, not a gain).
    – Ultimately growth is very dependent on innovation. American companies had a monopoly on 25 years worth of technical innovations that had not been commercialized and an industrial base built from the war.
    – Yes, the top rate was 90%, but nobody paid that. The government % of GDP was much lower.
    – Population was much younger and growing much faster.

    I believe that the 20th century corporate dominated economy will be remembered as a temporary phase of economic development. Soon most of manufactured goods in the developed world will be locally produced with the help of robots, 3D printing, etc, much better customized to consumers exact needs. China is the last country that will develop using the export model to the developed world. Clothing and shoe manufacturing will soon be coming back to USA.

    It seems to me that comparisons between different time periods are less valuable that comparing what is working at present between different countries and their policies…

  48. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 18:23

    E. Harding:

    “Sumner endorsed Johnson in the safe states, and endorsed Hillary in the swing states. That’s supporting Hillary. I was not wrong.”

    Why isn’t that supporting Johnson instead?

  49. Gravatar of Indian Indian
    19. June 2016 at 18:46

    What cost Rajan his job is his drive to get banks to accurately report the bad loans. If the truth comes out no Indian billionaire will be left standing.

    Eveything else like not quick on lowering rates and “insufficiently” Indian are just ruses. Corporate India did this. Officially they want him to continue, but they have been lobbying for his head

  50. Gravatar of E. Harding E. Harding
    19. June 2016 at 18:57

    Freedom, that’s because votes in safe states don’t matter, while votes in swing states do.

  51. Gravatar of Benjamin Cole Benjamin Cole
    19. June 2016 at 19:06

    I will say this for Rajan: He had a 4% IT with a 2% band. And India, despite a horrible infrastructure and terrible politics, is obtaining higher real growth rates than the United States.

    So why is not Rajan’s relative sucess with a higher IT target never the topic of polite discussion in Western macroeconomic, academic, or central banking circles?

    If Rajan will adopt his IT band for the US, I propose him to replace Janet Yellen.

    So why is

  52. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 19:41

    E. Harding:

    “Freedom, that’s because votes in safe states don’t matter, while votes in swing states do.”

    Is supporting Hillary over Trump, and supporting Johnson over both Hillary and Trump, an example of supporting Hillary?

  53. Gravatar of Massimo Heitor Massimo Heitor
    19. June 2016 at 19:44

    @Major Freedom,

    “Why don’t you just accept the fact that you were wrong to call Sumner a Hillary supporter?”

    Sumner fully endorsed Hillary. “Hillary is terrible. I despise her. I endorse her”. This is obviously a lesser-of-two-evils endorsement, but I don’t think it’s the slightest bit manipulative to say that Sumner is a Hillary supporter. He is a reluctant one, he despises her as a candidate, but he is endorsing and supporting her.

    Heck, if it wasn’t a simple A/B choice, I’m sure there are many candidates better than Trump.

  54. Gravatar of John S John S
    19. June 2016 at 20:40

    Since the thread has already been derailed…

    LeBron is now the 3rd greatest bball player of all time, behind Jordan and Kareem.

    I also support ssumner’s proposal to move the 3pt line back a foot, but I doubt it will happen unless league-wide 3pt att/game go up another 10-15%.

  55. Gravatar of Major.Freedom Major.Freedom
    19. June 2016 at 20:42

    So if someone said Stalin is worse than Hitler, this is tantamount to supporting Hitler?

  56. Gravatar of E. Harding E. Harding
    19. June 2016 at 20:48

    Freedom, yes. Either Stalin or Hitler would rule Eastern Europe; neither was pretty, but you had to pick a side.

  57. Gravatar of Massimo Heitor Massimo Heitor
    19. June 2016 at 22:49

    “So if someone said Stalin is worse than Hitler, this is tantamount to supporting Hitler?”

    If they were the two choices in a two choice election, then yes, endorsing the lesser evil is supporting him for the scope of the election.

    “If a politician is bigoted against unpopular groups like Muslims, don’t believe his promises to make the country great.”

    Sumner, this is crazy spin.

    I was actually curious to hear Sumner’s take on the Five Star party in Italy given his recent criticisms of Berlusconi.

  58. Gravatar of Art Deco Art Deco
    20. June 2016 at 06:46

    “Postkey: it is remarkable. The US experienced very strong growth in the 1950-60s, in an economy characterized by unions, heavy regulations on transportation, communications and banking, a top tax rate of 90%, the Big 3 and Big Steel, pre-Wall Mart and very little international trade.”

    Growth in per capita product during the period running from 1947 to 1970 averaged 2.36% per annum. That’s not fantastically rapid, just more rapid than was the case during the period running from 1970 to 1991, when the rate was 2.06% per annum. Growth was most rapid during the peri-war period (1938-47), at 5.5% per annum. I would not recommend entering global wars to stoke the economy.

  59. Gravatar of Art Deco Art Deco
    20. June 2016 at 06:50

    “Nevertheless, the neoclassical demand for structural reform became mainstream opinion and thus the Japanese government embarked on a major structural reform programme during the 1990s, including several thousand deregulatory measures, administrative reforms and the ‘Big Bang’ liberalization of financial markets. Yet there is no evidence that these structural reforms boosted economic growth.

    1. Japan hit the technological frontier.

    2. Japan also crashed into a demographic constraint.

    3. Japan had a distressed banking system for 15 years.

  60. Gravatar of Art Deco Art Deco
    20. June 2016 at 06:52

    That is an argumentative fallacy. You are not refuting argument X by pointing to the person’s beliefs about argument Y.

    You have not correctly identified the argument I was making.

  61. Gravatar of LK Beland LK Beland
    20. June 2016 at 09:32

    I agree that the RBI offered a nice monetary environment under Raghuram Rajan’s leadership.

    Speaking of good central banks, the Korean central bank still seems to be doing its job quite well. Perhaps the best CB in the world (arguably ex aequo with Chile’s).

    But they are getting ever closer to the ZBL (not that zero is actually the lower bound, but whatever). And the GDP/capita (PPP) has overtaken New Zealand’s and may reach that of France and the UK; not much “catchup growth” left ahead. I am quite curious to see how their central bank will react to these new conditions. A true litmus test, in my opinion.

  62. Gravatar of Anand Anand
    20. June 2016 at 10:35

    Rajan’s tenure seemed good to me. He seemed an honest and competent person. Yes, he focused on inflation, but India is not the US – there was a lot of inflation when he started out.

  63. Gravatar of Market Disagrees Market Disagrees
    20. June 2016 at 11:47

    Mr. Market Monetarist,

    The stock market went up, bond yields tightened and rupee lost…the market disagrees that it is a sad day…

  64. Gravatar of Alexander Hamilton Alexander Hamilton
    20. June 2016 at 11:49

    Postkey, I don’t understand what you get out of regurgitating post-keynesian scripture in the comments section of blog posts that are often totally unrelated?

    Does the holy man in question explain why Japan has suffered deflation when it hasn’t run a surplus since 1991?

  65. Gravatar of Mike Sax Mike Sax
    20. June 2016 at 11:52

    “No, Rothbard thought every individual has had natural rights since the dawn of humanity, and that both monarchical rule and Democratic rule violates those rights. Rothbard critiqued Kings in his works for precisely this reason.”

    Maybe so, but, like Herman Hoppe, Rothbard thought the violations of natural rights is worse under democracy

    “This is not equivalent to the shift from Monarchy to Democracy, although there are connections which I won’t go into here.”

    Within those connections was the belief that the Divine Rights of Kings was more in keeping with natural rights than democracy

  66. Gravatar of Postkey Postkey
    20. June 2016 at 13:49

    “I don’t understand . . . ”

    Stating the obvious?

  67. Gravatar of Scott Freelander Scott Freelander
    20. June 2016 at 14:01

    Scott, you replied:

    ‘Scott, You said:

    “but a perma-hawk would hurt them severely eventually,”

    Maybe in 100 years, bur for the foreseeable future India’s problems are supply side. Rajan was helping India.’

    I don’t follow you. Is his supply-side sensitivity helpful with respect to conducting monetary policy, in that he would better be able to interpret recent situations like the falling wholesale price indexes versus rising consumer price indexes? Is it more helpful in understanding the limits of real GDP growth in India, and hence feeding less harmful inflation? Was it his banking reform agenda?

    In an ideal world, the right way for Rajan to help India would be to let him help direct the dismantling of the state food distribution systems, for example, and have influence to make similar policy changes. I don’t think he’s right for a central bank at all.

  68. Gravatar of Major.Freedom Major.Freedom
    20. June 2016 at 14:23

    Art Deco:

    “You have not correctly identified the argument I was making.”

    Actually I did. I correctly identified it as not a response to the argument I made. You did not even engage my argument.

    Weaksauce.

  69. Gravatar of Major.Freedom Major.Freedom
    20. June 2016 at 14:28

    Mike Sax:

    “Maybe so, but, like Herman Hoppe, Rothbard thought the violations of natural rights is worse under democracy”

    Not quite. Rothbard did not write that democracy was worse than Monarchy, Hoppe did.

    “Within those connections was the belief that the Divine Rights of Kings was more in keeping with natural rights than democracy”

    That was not Rothbard’s belief, nor the belief of any other libertarian natural law theorist. To Rothbard, natural law was total individual sovereignty.

    The “divine right” is the foundation of democracy as well anyway. The divine right of the majority.

  70. Gravatar of Art Deco Art Deco
    20. June 2016 at 14:43

    Actually I did. I correctly identified it as not a response to the argument I made. You did not even engage my argument.

    No, you did not. I did not ‘engage’ your ‘argument’ because your devotion to Rothbard is of no interest to me and Rothbard’s economics is of no interest to me. I was commenting on Rothbard’s historiography, which is nonsense. No number of red herrings uttered by you make it something other than nonsense.

  71. Gravatar of Scott Freelander Scott Freelander
    20. June 2016 at 15:17

    Scott,

    In fact, skip to the 40 minute mark of this talk by Rajan:

    https://www.youtube.com/watch?v=SHnCazIdY6I

    He’s reasoning from a price change and telling stories about how low interest rates might actually be counter-productive when it comes to increasing consumption.

    This is not someone who understands monetary policy well enough to run monetary policy.

  72. Gravatar of Benjamin Cole Benjamin Cole
    20. June 2016 at 16:07

    Scott Freelander—interesting q: when was the last time a major central bank successfully raised rates?

    Rajan raised rates only to do a near immediate u-turn, much in the manner of the ECB. We see now the Fed is having problems with its rate-raising plans, and its last rate hike was probably counter-productive.

    This is what they should be discussing at summits, such as that in Jackson Hole. Are the days of raising rates dead and gone forever?

  73. Gravatar of E. Harding E. Harding
    20. June 2016 at 16:43

    “when was the last time a major central bank successfully raised rates?”

    -Consider Brazil and Russia; last they raised rates was later than most.

  74. Gravatar of Scott Freelander Scott Freelander
    20. June 2016 at 16:53

    Ben,

    It’s a good question. Unfortunately, central banks around the world are still essentially shell-shocked by the experience of high inflation that is decades in the past. Much like the Allies in interwar Europe, they can’t help, but reflexively try to fight the last war.

    I think part of the problem is that, just as most economists didn’t understand monetary policy well in the 1970s, when inflation in the US and some other countries was high, they similarly don’t understand it well now. That doesn’t seem to keep many of them from seeming to consider themselves experts though.

    Frankly, the average reader of these market monetarist blogs would probably do better than most central bankers, at least in this era. Most of us probably understand that right now it’s better to err on the side of inflation being too high, than the reverse.

  75. Gravatar of Scott Freelander Scott Freelander
    20. June 2016 at 17:05

    From the perspective of interest rates and inflation targeting, I think the Fed funds rate right now should be around -.5%. Of course, targeting nominal wages or NGDP would be better, but if I have to use interest rates and target inflation, that’s a good rate.

    That might be too low, given that real growth potential right now might be lower than it was pre-recession, so I’d lower the rate over 2-4 FOMC meetings until hitting that rate, or until somewhat exceeding the 2% inflation target on a sustained basis. And in fact, I’d probably permanently adopt a higher inflation target, and would do level targeting to try to prevent/lessen future recessions, as needed.

    An easy calculation suggests that, assuming negative interest rates can be effective and that there’s 100% credibility, the rate required to minimize problems in ’08 and ’09 was -4%.

  76. Gravatar of Art Deco Art Deco
    20. June 2016 at 17:34

    Frankly, the average reader of these market monetarist blogs would probably do better than most central bankers, at least in this era. Most of us probably understand that right now it’s better to err on the side of inflation being too high, than the reverse.

    I think we’re honing in on the problem common to all of your commentary.

  77. Gravatar of ssumner ssumner
    20. June 2016 at 18:37

    Indian, I agree.

    John. S. I’ve always thought LeBron was top three, and don’t his critics look foolish now?

    Market, Many stock markets soar 3% on ebbing Brexit worries, and the Indian market rises less than 1%, and you think it proves what? In addition, since when is the stock market the right indicator for the soundness of crony capitalism policies aimed at insider companies trading on the . . . stock market?

    Scott, He did a good job on monetary policy, but more importantly he was trying to clean up India’s corrupt banking system. If he was a bad central banker, then so was Volcker.

  78. Gravatar of E. Harding E. Harding
    20. June 2016 at 20:24

    “In addition, since when is the stock market the right indicator for the soundness of crony capitalism policies aimed at insider companies trading on the . . . stock market?”

    -Holy crap, Sumner came out against a market. Can you expound on this for a bit, Sumner? When are markets useful and when they aren’t?

  79. Gravatar of athreya athreya
    20. June 2016 at 22:33

    Rajan was pushed out because there is a nativist fringe within BJP that is suspicious of foreign educated experts. In that they are of one mind with their communist comrades who charmingly continue to aim for revolution via electoral politics.

    Apart from the irony of a right wing government pushing out a Chicago economist, I still can’t get my head around the idea that democratic governments don’t want independent regulators. Surely when things go wrong isn’t it better to have others to apportion blame?

    India has been a basket case of policy errors for many years now. High fiscal deficits and high inflation have been the norm. Indian policymakers have never missed an opportunity to pile on stimulus. Rajan was doling out some bitter medicine via inflation targeting and bank balance sheet clean up. So was the government by way of crackdown on money laundering and corruption. Obviously govt can’t go back on its signature moves so Rajan has been let go. Expect the next Governor to soft peddle bank reforms. And keep his or her head down.

  80. Gravatar of athreya athreya
    20. June 2016 at 22:40

    Oh and for those who look at market reaction, bond, currency and equity markets opened negatively but then recovered. Still both rupee and Indian equity indices under performed EM baskets. This is after reported intervention by the RBI in the currency market and large scale buying by government owned entities in the equity market. Bonds of course rallied later in the day following the recovery in currency. Not to mention the fond hope of many in bond market that Rajan exit = rate cuts.

  81. Gravatar of ssumner ssumner
    21. June 2016 at 06:08

    Harding, You said:

    “Holy crap, Sumner came out against a market.”

    If I deny that the stock market is a good indicator of who is likely to win the NBA finals, does that mean I am “against a market”? Don’t be an idiot.

    athreya, Thanks for that info, good comment.

  82. Gravatar of E. Harding E. Harding
    21. June 2016 at 10:39

    I’m not an idiot, Sumner. And you weren’t talking about the stock market as an indicator of the NBA finals, but its value as an economic indicator. You use the stock market all the time as an indicator of what’s good and bad for the economy. What prevents that same logic for being used for the Indian stock market? Does this apply to your look at 1920s U.S. stock market performance and enforcement of anti-trust laws?

  83. Gravatar of Major.Freedom Major.Freedom
    21. June 2016 at 21:09

    E. Harding:

    “You use the stock market all the time as an indicator of what’s good and bad for the economy.”

    Quite right, Sumner has done that on a number of occasions. He will likely deny this, accuse you of being “confused”, and just ramble with another post or two. Normally when he’s pinned because of an inconsistency, or plain flaw in his view, he’ll insult and spew vitriol. Insults are therefore evidence that what you said is right.

    Some people don’t handle cognitive dissonance very well.

  84. Gravatar of Major.Freedom Major.Freedom
    21. June 2016 at 21:13

    Art Deco:

    “No, you did not.”

    Actually yes, I most very well did. You even admitted this in your very next sentence, when you wrote:

    “I did not ‘engage’ your ‘argument’”

    See? You did not even engage the argument about Utilitarianism. You admit you did not. I said you did not engage the argument with your response, and your response was to simply deny it.

    “I was commenting on Rothbard’s historiography, which is nonsense.”

    Which was a red herring to the argument about Utilitarianism. And you have not shown how it is nonsense.

    You have nothing. Nothing at all against the argument about Utilitarianism. Bye.

  85. Gravatar of Postkey Postkey
    23. June 2016 at 00:32

    “1. Japan hit the technological frontier.

    2. Japan also crashed into a demographic constraint.

    3. Japan had a distressed banking system for 15 years.”

    Do you understand the assumptions of the neoclassical/neoliberal model?

  86. Gravatar of Art Deco Art Deco
    23. June 2016 at 03:05

    Do you understand the assumptions of the neoclassical/neoliberal model?

    Concerning what?

  87. Gravatar of Art Deco Art Deco
    23. June 2016 at 03:07

    See? You did not even engage the argument about Utilitarianism. You admit you did not. I said you did not engage the argument with your response, and your response was to simply deny it.

    I did not because it was irrelevant to my point, which had nothing to do with utilitarianism or natural rights. You want to mouth off about utilitarianism, that’s your privilege. I do not get paid to listen to you. Your shrink does.

  88. Gravatar of ssumner ssumner
    23. June 2016 at 12:37

    Harding, I argue that stocks and NGDP expectations are positively correlated when AD is a problem. AD is not a problem in India today.

    Suppose stocks rise because we cut the corporate income tax. Would that prove that cutting the corporate income tax was a good idea? Obviously not.

  89. Gravatar of E. Harding E. Harding
    23. June 2016 at 14:40

    OK, Sumner, that’s a more reasonable response.

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