Looking to economic analysts for guidance

Well at least this time he didn’t mischaracterize my views.  But I still think Paul Krugman slightly misunderstood my point.  If you don’t know what I am referring to, Krugman has just done his once a year comment on one of my blog posts.  It’s not that bad.  He’s right that my post was a bit naive—I did that to be provocative.  But I will also contest some of his views.  And his follow-up post raises some very important questions when he tries to explain President Obama’s failures.

First a bit of fun.  My post was entitled “What we should be debating,” and note the term ‘we.’  Krugman responds:

Scott Sumner argues that we should be debating the substance of monetary policy, rather than whether Ben Bernanke should be reappointed. I wish it were that simple.

Of course the underlying issues involve monetary policy. But the Senate doesn’t get a direct vote on that; the only vote it gets is on whether to approve a Fed nominee. And Senators are looking to economic analysts for guidance on that actual vote.

At first I wasn’t sure what to make of this.  Could Krugman have confused me with the new Senator from my home state.  We are both named Scott.  Seriously, I get the fact that Senators aren’t expected to debate the fine points of monetary economics.  But that wasn’t the point I was trying to make.  My complaint was that most of the blogosphere posts I saw (pro and con) didn’t discuss what I thought was the central monetary policy issue of our time—has monetary policy been too expansionary or too contractionary since mid-2008.  It would be like evaluating the job the head of FEMA did, without discussing his performance during Katrina.  In fairness, Krugman did briefly mention the need for more monetary stimulus in a recent post on Bernanke.  But for the most part the debate on the internet seems to have focused on regulatory issues, not monetary stimulus.

I do expect even Senators to have some view on the overall stance of monetary policy.  Plenty of Senators were demanding a more expansionary monetary policy in 1933, despite the fact that interest rates were near zero and the monetary base had recently expanded dramatically.  So they were able to look beyond the simple Keynesian and monetarist models.   Are our Senators today more ignorant of monetary policy than the Senators of 1933?  Actually yes, because 25 years of the Great Moderation have de-politicized monetary policy, leaving most non-economists (and plenty of economists) oblivious to any monetary options other than changing the fed funds rate.

OK, so far I am sort of with Krugman, our Senators do need advice from “economic analysts.”  That’s why I want to spark a debate on this issue, to help our Senators become more informed.

Since October 2008 I have been running around like Paul Revere yelling the deflation is coming, the deflation is coming.  (Well, actually falling NGDP, but deflation is easier to say.)  In February I started the blog and few weeks later I sent an open letter to Krugman asking him to support a full court press of every unconventional monetary tool we could think of.  Ideas such as quantitative easing via assets other than T-bills, inflation or NGDP targeting, stopping the payment of interest on excess reserves and considering a modest interest penalty on ERs.  Krugman basically blew me off, saying something to the effect that monetary policy is ineffective once rates hit zero.

In fairness to Krugman, I don’t think he necessarily disagreed with all my suggestions, rather my hunch is he never read much beyond the opening section of my letter.  There are other occasions when Krugman did mention the possibility of using unconventional tools.  But my point is this, the average reader looking at Krugman’s response to me back in March 2009 would have naturally inferred that I was delusional in thinking the Fed could do anything once rates hit zero.

I also argued that fiscal policy was not going to be enough, as it was much less stimulative than monetary policy.  We have just engaged in deficit spending nearly twice as big as Reagan’s famous 1981-83 deficits (as a share of GDP), and even Krugman himself has noted that the recovery is pathetically weak compared to the 1983-84 recovery (which saw real growth in the 6% to 8% range for about 6 quarters.)  BTW, the 4th quarter probably will be strong, but early indications  are that we will slow again in the first quarter.

Throughout much of 2009 I kept challenging liberals to push harder for monetary stimulus.  Last summer I pointed out that it was in their interest to do so, otherwise the Dems faced a debacle in the 2010 elections.  And yet I never seemed to see any sort of forceful statements coming out of Washington.  Why aren’t Obama, Pelosi and Reid pushing hard for more monetary stimulus?  Today, Krugman provides the most plausible answer that I have yet seen:

And Senators are looking to economic analysts for guidance

As I said, I have been working my butt off trying to provide guidance to our policymakers.  Yet despite this very generous compliment from Tyler Cowen, something tells me that TheMoneyIllusion.com isn’t the first thing the Democratic elite reads each morning.  No, my hunch is that they are much more likely to rely on what they read in the NYT, especially if it comes from the most famous liberal economist in America, who is a superb writer, and who just won the Nobel Prize.  Unfortunately, until recently he was mostly ignoring monetary policy, and instead kept insisting that fiscal stimulus was the only solution.  (Please don’t dig up early quotes where he mentions inflation targeting, for every such quote I can find 5 where he writes in such a way that the average Senator would assume there is nothing more the Fed could do.  “Period.  End of story.”)

Now we all know that Paul Krugman is very modest, so I’m sure he would deny having that much influence in shaping opinions.  After all, the fiscal stimulus was smaller than what he wanted.  But he is more influential than he might think.   He did seem to come around to my view late last year when it became obvious that the fiscal stimulus wasn’t going to get the job done, and became increasingly critical of the Fed.  He even started talking up quantitative easing.  And soon after that I started to see other liberal bloggers become increasingly critical of the Fed’s refusal to take additional steps to boost aggregate demand.  This is good, I just wish it had come in October 2008.

You might ask why I am giving the conservatives a free pass.  Some conservatives did push for additional stimulus, but the average Chicago-type economists did not.  In this case the problem was different; most agree with me that monetary policy can impact NGDP, even at zero rates.  But they didn’t seem to think additional nominal growth would have been helpful.  So I sort of wrote them off as hopeless cases, like the conservatives in the early 1930s who felt the biggest problem was the “inflationary” monetary policies pursued by Herbert Hoover’s Fed.  I won’t get into all the reasons for their failure to understand the danger of NGDP falling at the fastest rate since 1938, but it had to do with misunderstanding the reasons for the monetary base increase, focusing on inflation rather than NGDP, forgetting that a severe debt crisis is not the best time to downshift from 2% inflation to 0%, thinking wages are pretty flexible now that unions are weak, and focusing on backward-looking policy rules.  So to give the liberals credit, at least they consistently diagnosed the problem—too little AD.

Part 2.  Is Obama to blame?

In a follow-up post Krugman tries to assess what went wrong in Obama’s first year.  As a general rule, strong supporters of a candidate aren’t always the best person to evaluate their failures.  Krugman tries to put things into perspective by comparing the situations faced by Obama and FDR:

What seems clear to me is that the economics were bound to be difficult. Long before the bad numbers started rolling in, there were strong reasons to believe that the economy was in for a prolonged jobless recovery. For one thing, that’s what had happened after recent US recessions, and this slump seemed to share the same characteristics; for another, prolonged periods of weak employment are normal in the aftermath of financial crises(pdf).

So one case you can make is that Obama was just fated to have a bad first year. FDR had the good luck not to take office until more or less everything that could go wrong, had; the bank runs had already happened, the big decline in GDP was already nearing its end. Obama, by contrast, came into office early enough to take the blame for the continuing slump.

I don’t totally agree with the first paragraph; the two previous recessions were relatively mild and it is easier to get fast growth when coming out of a steep slump like 1920-21, 1929-33, 1937-38, and 1981-82.  But it is at least defensible.  But I can’t make heads or tails of the second paragraph.  When FDR took office in early March 1933 we were in the midst of the worst banking panic in American history.  Some states had already shutdown their entire banking system and FDR was about to close all of America’s banks.  Yes, the contraction ended in March 1933, but only because FDR made it end with the most expansionary monetary policy in American history—which caused both prices and output to rise rapidly in the months immediately after March 1933.

Here is one sense in which FDR had a slight advantage; things were so much worse in 1933 that the country gave him almost a free hand to do what he wished.  His most effective policy was doing an end run around the ultra-conservative Fed by devaluing the dollar, and threatening to issue billions of “greenbacks” (fiat money) if the Fed didn’t play ball.  I am certainly not suggesting that Obama had the political capital necessary to take steps that radical.  But if you go back to the previous post, Krugman seems to think Obama was even weaker than he actually was:

Nor is it necessarily the case, as Sumner suggests, that the Obama administration chose Bernanke because it favors the policies it believes he will follow. Again, it’s not that simple: administration’s choose Fed chairs to appease markets, or to avoid a fight with the other party, or because they think it will look good on TV.

When Obama took office he should have declared a national economic emergency and met with all the key policymakers, including Bernanke.  Or maybe he did and I forgot.  In any case he should have had this sort of discussion:

But could more have been done to turn things around? The best chance of averting the normal, dismal aftermath of financial crisis was to respond very aggressively on multiple fronts: really big fiscal stimulus, massive recapitalization of the banks to get them lending again (which in turn would have meant temporary nationalization of the weakest players). And aggressive action at the Fed, including really big quantitative easing and a higher inflation target, could have helped.

In fact, the Obama administration didn’t do any of these things. Instead, it pursued meliorative policies: a stimulus that was huge by historical standards but inadequate to the size of the problem, and a bank policy aimed at restoring confidence rather than promoting a revival of lending.

These aren’t my views BTW, these are the views of an enlightened liberal pundit.  There would be no reason for Obama to adopt my views, I’m not a Democrat.  If Bernanke didn’t agree with the monetary stimulus idea, Obama should have said “Thank you very much for your service, but we need to move on.”  And then picked some respected liberal monetary economist who did support additional unconventional monetary stimulus.

But now I think Krugman may be being a bit too hard on President Obama.  Yes, in retrospect this is what he should have done.  But how could you expect Obama to have known that at the time?  In February 2009 there were just a handful of us pushing aggressively for “really big quantitative easing and a higher inflation target.”  Krugman was fond of saying that QE didn’t work in Japan (even though they never really tried QE) and said we needed a much higher inflation target, and that central banks were way too conservative to do this.  In fact, even a 3% expected inflation target would have led to massive stimulus by the Fed, given the enormous slack in the economy.

So again, I ask this question:  How can we expect President Obama to have known when he first took office that the Fed needed to do much more stimulus?  Obama is not an economist.  Almost all non-economists think there is nothing more the Fed can do once rates hit zero.  How could Obama have known otherwise?  Perhaps the answer is that the policymakers in Washington were:

Looking to economic analysts for guidance

And did not find the guidance they needed from the most famous liberal economist in the world.

PS.  Yes, I know that this means Summers, Romer, et al, are also to blame.  And I’m sure Krugman believes no one in Washington listens to him.  But you know what I always say; it’s all about the zeitgeist.  And Krugman is as influential an opinion-maker as anyone.

PPS.  Every time I mention the open letter, a Krugman supporter tries to defend him.  So once again; I specifically asked him to support several “unconventional” monetary options like QE involving riskier assets, inflation targeting, etc.  I claimed he had once indicated those might work at the zero bound.  And this is true.  He answered my letter as if I claimed he had suggested conventional monetary stimulus could work at the zero bound.  He said he had never made such a statement.  True, but I never said he had.  Then he totally ignored my plea for more unconventional stimulus.  That is, until recently, when he started advocating policies I had asked him to support in the open letter last March.

PPPS.  Just before going to post this Krugman posted this:

So sure enough, we have Tim Geithner arguing that Ben Bernanke needs to be confirmed because otherwise the markets will be troubled.

I hate, hate, hate it when people say that we have to do something, not on its merits, but because otherwise we would damage market confidence. Nobody really knows how the markets will react; the right thing, always, is to pursue policies that look right on the substance.

The weird thing is that I had originally assumed that he was criticizing me for being naive in not understanding that Obama needed to consider the reaction of markets.  Now I think that he actually agrees with me, and that he was saying I was being idealistic for assuming that real world politicians wouldn’t kow-tow to markets, even if he and I both agree they shouldn’t.  Just one more example of how easy it is to misinterpret another blogger.  Did any of you guys also misread his criticism of me?  Or was it just me?

HT:  Dilip



22 Responses to “Looking to economic analysts for guidance”

  1. Gravatar of Paul J Paul J
    25. January 2010 at 14:50

    For what it is worth. I think you are exactly correct. Krugman did what he does with a lot of critisism (read the first few sentences then dismiss the whole rest of the article. See superfreakonomics for a great example.)

    In all honesty sometimes I feel as though two differe t people are writing his blog. Or maybe he is half drunk when he writes sometimes. I will either come away treading his blog thinking he is a genious or that he is a half stupid hypocrit. And I feel like more and more recently it is the latter.

    That was probably too harsh but oh well. It makes me angry when he pettitly dismisses your arguments.

  2. Gravatar of Mike Sandifer Mike Sandifer
    25. January 2010 at 15:41


    On a minor point, I had actually looked at this reply from Krugman you mentioned today earlier after reading today’s post referencing you. To quote from the March 2, ’09 reply:

    “My view, which I thought was pretty clear, is that the liquidity trap is real: no matter how much the Fed increases the monetary base, it has no effect, because it just substitutes one zero-interest asset for another. If the Fed could credibly commit to inflation at rates higher than the 2-ish percent target it’s already believed to have, that would be effective. But right now I don’t see that as a realistic option, hence the emphasis on fiscal policy and bank recapitalization.”

    Notice “If the Fed could credibly commit to inflation at rates higher than the 2-ish percent target it’s already believed to have, that would be effective.”

    So, it would seem to me he took your point, but just didn’t think such a monetary response was feasible at the time. I’d remembered this reply much the way you recall it in this post, so I was a bit surprised to find that sentence there today.

  3. Gravatar of bill woolsey bill woolsey
    25. January 2010 at 15:46

    If the Fed were purchasing zero interest T-bills (well, near-zero interest 4 week T-bills) with zero interest reserves, this might be true.

    In reality, the Fed is purchasing 1% and higher notes and bonds with .25 percent interest rates.

    Get rid of that .25 interest on the reserves, and do a lot more of it.

    There is no liquidity trap.

  4. Gravatar of Mike Sandifer Mike Sandifer
    25. January 2010 at 15:56


    I should add that your star is obviously rising as I see you quoted more frequently by the best known economists. Not that you this from me, but as someone coming from the profit-making world, I hope you’ll consider writing a popular book about this crisis and your monetary perspective. I admit to having a selfish motive here. Who knows, maybe a textbook would be nice too?

  5. Gravatar of Marcus Nunes Marcus Nunes
    25. January 2010 at 17:17

    There are 2 Krugmans. The Krugman before and after the NYT columnist. Check his Baby sitting co-op piece from Slate in 1998:
    The latter Krugman has become a bit too arrogant. In fact, just like Obama, he was pursuing his preffered agenda, and “a crisis should not go to waste”. So it became “convenient” to “forget” his own prior beliefs and advocate more Government (expenditure, health control, regulation, etc)

  6. Gravatar of The Ambrosini Critique » Blog Archive » “My beef with Scott Sumner” OR “Dude, you’ve already won the debate!” The Ambrosini Critique » Blog Archive » “My beef with Scott Sumner” OR “Dude, you’ve already won the debate!”
    25. January 2010 at 18:33

    […] often slips from this valid critique into a claim that the Fed continues to make a mistake (e.g. here: “Throughout much of 2009 I kept challenging liberals to push harder for monetary […]

  7. Gravatar of Bob Murphy Bob Murphy
    25. January 2010 at 18:50

    Scott, if you want senators to read your blog posts, there’s no way they can go up to having a “PPPS.” They don’t read their legislation, and they’re certainly not going to read a post this long.

  8. Gravatar of Richard A. Richard A.
    25. January 2010 at 18:57

    What could congress do to stimulate the economy? Immediately pass legislation that suspends the ability of the Fed to pay interests on excess reserves. This would tend to raise the money multiplier. Unlike fiscal stimulus, this would not cost the government. This is something I would like to see debated.

    Of course, if such legislation were to pass, I can imagine the Fed responding by raising reserve requirements.

  9. Gravatar of ssumner ssumner
    25. January 2010 at 19:25

    Paul, I’m sure he’s not drunk, but he can seem a tad inconsistent.

    Mike, You have to read my post first. I claimed that he suggested that QE could work if it involved buying longer term bonds or riskier bonds. He strongly denied ever making that statement. But then we found numerous times before and after where he did make that statement. Indeed he made it again a few minute later in the next post.

    There is no dispute about inflation targeting. We both agree that he supported that, and that wasn’t what I was referring to when I said he mischaracterized my views. He basically said I put words in his mouth, and I did no such thing. Every single word in my letter was 100% accurate.

    Bill, I agree.

    Mike, Thanks, the problem is finding the time.

    Marcus, It may not even be conscious, but I am inclined to believe that his newfound belief in much bigger government must have at least subtly affected his views on the relative merits of monetary and fiscal stimulus.

    Ambrosini probably won’t read this, but I’ll respond to his post anyway. Money is still too tight for several reasons:

    1. Two year inflation expectations are still way too low.
    2. It’s NGDP, level targeting, that matters anyway, and we need lots of catch-up in a world where many wages (like public employees) are inflexible.
    3. Tight might today creates a severe recession, which creates a massive budget problem, which RAISES long term inflation expectation.

    I realize your argument is in some ways more persuasive to good economists than my messy argument. I’d rather defend your position. And I agree that the “sell by date” of my argument is approaching, but I still don’t think we are there yet. When things are this depressed you can get rapid recovery without a breakout of inflation. I lived through it in 1983-84. We can do it again. If I’m singing the same song in 2011, put me out to pasture.

    Bob, I’m not trying to influence Senators directly, I’m trying to influence the “economic analysts” that give them “guidance.”

    Richard A. A great idea. They might respond that way, but after what happened in 1937, it would be awfully embarrassing. It would really put the spotlight on the Fed.

    My other fear is that it might not work, I’ve always accepted the notion that a zero rate might not be enough, and that a negative rate might be necessary to dislodge reserves (in the absence of other steps like inflation or NGDP targeting.)

  10. Gravatar of Mike Sandifer Mike Sandifer
    25. January 2010 at 21:39


    Yes I read the post. I was referring only to that particular Krugman response.

  11. Gravatar of cucaracha cucaracha
    25. January 2010 at 23:46

    Michael Unterguggenberger for the FED.

    ( but unfortunately this great humble man is not alive anymore )

  12. Gravatar of cucaracha cucaracha
    26. January 2010 at 02:45

    Serious now – Gesell is too advanced for todays economists: Maybe a sharp devaluation of the US dollar & purchases of long term Treasuries… But how much money will you have to issue until then ? Maybe some fiscal spending with the FED’s financing providing some income redistribution (higher consumption that induces inflation from bottom to top) could help ?

    You have to admit that Krugman is particularly right about the FED and the other members of the board:

    Just take a look, this is from Richard Fisher, president of the Dallas Fed, appointed by member banks:

    “Regarding the Fed’s overall accountability, ours is the only BUSINESS in America that I know of that provides a public accounting of its balance sheet every week: It is called the H.4.1 release, and it is available on the Web(…)” (highlight is mine)

    Jesus Christ, “BUSINESS” !!? And did he expect the FED to be exempt from providing full information about its balance sheet ?

  13. Gravatar of TheMoneyIllusion » Is Bernanke too melancholy? TheMoneyIllusion » Is Bernanke too melancholy?
    26. January 2010 at 09:31

    […] who need to be educated are Fed Presidents like Janet Yellen, and what Krugman calls the “economic analysts” who advise them.  But my second point is that this “expectations” issue should […]

  14. Gravatar of Scott Sumner Nominates Cramer for the Fed | Contrarian Musings Scott Sumner Nominates Cramer for the Fed | Contrarian Musings
    26. January 2010 at 14:43

    […] people who need to be educated are Fed Presidents like Janet Yellen, and what Krugman calls the “economic analysts” who advise them.  But my second point is that this “expectations” issue should not […]

  15. Gravatar of Mr. E Mr. E
    26. January 2010 at 15:04


    I think there is somewhat of a different take on this.

    Krugman usually deals in the art of the pragmatic. So when he calls you out, and says “We’re at the ZIB”, he is really saying something like “We’ve seen all the unconventional monetary policy we’re going to see, and we are at the ZIB.”

    Of course, he knows there is lots of stuff we could do. But, we are not doing them, so we aren’t going to do them. Your suggestions about doing them are probably correct – but not really possible.

    Then, take a quick stroll in his shoes. He is the subject of a blog that responds to every word he writes from mises.org. He is regularly demonized by conservatives – they use his face and name in fund raising material. On Fox, Glen Beck and others regularly distort his words and make him out to be nearly a baby eater.

    I agree, he isn’t the most consistent, and he doesn’t “fight fair” I can excuse being inconsistent, because everyone is inconsistent.

    So for the “doesn’t fight fair” complaint, I think he is tired of the conservative noise machine being the only ones bringing a gun to a knife fight, and rather than just being a wimp and complaining about it, he is just raising his middle finger and shooting back.

    Let’s face it – you could be considered to be a conservative economist. You seem like a smart and good-natured guy, but he’s a smart and good-natured guy too. He is no longer concerned with being fair to every view point out there – even ones that might have merit. He’s been smeared with a variety of claims, over and over again for years.

  16. Gravatar of Doc Merlin Doc Merlin
    26. January 2010 at 18:21

    I don’t think you misread it. He argues against relying on “market confidence” when he expects it to go against his policy preferences. And he uses arguments about market confidence when it goes with his policy preferences.

  17. Gravatar of scott sumner scott sumner
    26. January 2010 at 19:56

    Cucaracha, You said;

    “You have to admit that Krugman is particularly right about the FED and the other members of the board:”

    Yes, but he has to admit that I was right about fiscal policy. The question is where to we go from here. And it is increasingly clear that monetary policy is our only hope. Indeed late last year Krugman starting moving in my direction.
    And now Obama is talking about spending cuts.

    Mr. E, You said;

    “Of course, he knows there is lots of stuff we could do. But, we are not doing them, so we aren’t going to do them. Your suggestions about doing them are probably correct – but not really possible.”

    I understand that Krugman knows this. But I have found through experience that 99% of his readers don’t. And I can’t say I am surprised, as he often presents his arguments in such a way that the average reader would think there is nothing the Fed can do once rates hit zero. Indeed the vast majority of economists think there is nothing the Fed can do once rates hit zero. Indeed some members of the FOMC believe this. It might help if Krugman spent a bit more time trying to educate the public, instead of presenting his arguments is such a way that most readers come away confused. After all, Krugman is an expert on unconventional monetary stimulus. Instead he screams out MONETARY POLICY WON’T WORK and then says very quietly unless they want it to work.

    You said;

    “So for the “doesn’t fight fair” complaint, I think he is tired of the conservative noise machine being the only ones bringing a gun to a knife fight, and rather than just being a wimp and complaining about it, he is just raising his middle finger and shooting back.
    Let’s face it – you could be considered to be a conservative economist. You seem like a smart and good-natured guy, but he’s a smart and good-natured guy too.”

    I am in not position to judge myself. I haven’t met Krugman so I have no idea whether he is a “good-natured guy.” I judge people by how I observe them treat others. Do they treat the arguments of other bloggers with respect. Do they distort the views of others. Etc.

    By the way, most of the conservatives I know think liberals don’t fight fair, whereas they believe that they do. Most of the liberals I know think conservatives don’t fight fair, whereas they believe that they do. So the argument that Krugman can fight dirty because conservatives do is just silly. I hope these aren’t the ethics you teach your children. If we all did tit for tat we’d end up back in the stone age.

    Is this your argument: “Glen Beck is evil. Glen beck is conservative. Scott Sumner is conservative. Ergo Scott Sumner should be treated with contempt.”

    You seem like a “good-natured guy” I am pretty sure you don’t treat your acquaintances that way, even if they are conservative.

  18. Gravatar of Chad Hime Chad Hime
    26. January 2010 at 21:23


    You hit on a very important point in that last post – one of the main reasons I come to your site every day to see what’s kicking around your head – and that is the fact that you treat others’ arguments with respect. You are willing to acknowledge where you might be wrong, what you might not know, what others may be right on, exactly where and why you disagree with some or all of their argument, and you often put yourself in their shoes, which is instructive in teasing out how they came to their conclusions.

    Understanding others’ views is the first step to changing their minds – attacking and deriding others’ views almost always causes the target to go on the defensive and lash out. Certainly the target of derision rarely finds merit in the attack. You exemplify this principle consistently, and you ought to be commended for that fact. You also deserve props for responding intelligently to posts in the comments section – I love it (and this is my first post).

    Krugman as a perfect example of a guy who doesn’t empathize with his critics, or even those with legitimate questions. He’s so smart, witty, literate, and knowledgeable that he could be advancing the discussion in the mainstream considerably. Instead he chooses to arrogantly pursue a dogma, while dismissively insulting many fellow economists, pundits, and commentators instead of considering their arguments, and respnding in a measured and sensible way. I seriously doubt he’d take that tone with a student in his class, who asked a question or stated a view which he considered to be misguided.

    I certainly hope you will continue to engender such stimulating discussions on this blog, and furthermore I hope that someday soon you end up with a syndicated column with mass distribution – you might have to dumb it down some, but you’d advance the public discussion mightily. That being said, don’t change a thing as far as your format on this site, including shortening your posts (which was, I hope in jest, mentioned above).

    I can say without a doubt that I wish that I had studied under you or professors like you for my Econ undergrad, and if/when I return for my masters I would strongly consider studying under you (if only such decisions were so simple!). My Econ professors tried to turn everything into a ****ing math problem, and it totally turned me off (luckily it was my second major – history was the other – so undergrad wasn’t a complete waste). I’ve learned more about Econ since I graduated 3 years ago than I ever did while paying to learn the material, and I have to say your blog is the best one on the net in my opinion (and I have some 30-40 in my favorites).

    OK I’ll stop fawning, keep up the good work.


  19. Gravatar of ssumner ssumner
    27. January 2010 at 14:25

    Thanks Chad, It’s comments like yours that keep me going. I agree that Krugman could play a more constructive role if he took the arguments of others more seriously, and engaged in a constructive conversation on the issues.

    Many economists don’t want to respond to him after he implies they are either fools or knaves. I can’t say I am surprised.

  20. Gravatar of wayne burkhart wayne burkhart
    31. January 2010 at 14:55


    I like the old line, “Let’s you & him fight!”

    With reference to your debates with p. krugman, I’ve been following you both, and a certainly appreciate this post as clarifying of all of the issues around the current economic performance and our possible responses/correctives.

    Your writing is clear, responsive and respectful at the same time. Thanks a lot for doing it.

  21. Gravatar of scott sumner scott sumner
    1. February 2010 at 07:15

    Thanks Wayne.

  22. Gravatar of It’s All About Monetary Policy | Reaction Radio It’s All About Monetary Policy | Reaction Radio
    1. February 2010 at 19:50

    […] there are political considerations, as Sumner recognizes. It’s Washington, after […]

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