This isn’t a technical blog post, but more of rant, because I am quite frustrated with many of my fellow man.
A couple of weeks ago the National Review published a research article by David Beckworth and Ramesh Ponnuru that calls for a monetary regime change in the market monetarist point of view. It is an excellent article, by the way, and is well worth reading. I’m not going to discuss it in detail here because it speaks for itself. But when I read the comments attached to it, I feel the signs that we are indeed living in strange times and everyone has gone off their nut. It is equally shocking that a respected publication like Forbes would publish a rebuttal to it that has no data to back it up. In fact the author, Mr. Tamny seems to have not bothered to read it, but in his pinheaded response, just jumped to the conclusion that all market monetarists want to do is “print money.”
Well, that isn’t even really part of the plan because the proposal is to use the expectations channel to achieve monetary equilibrium and clear out the couple trillion of excess reserves that have been just sitting there. But if anyone ever bothered to read the article, Sumner’s or Christensen’s blogs (I have links in my blog roll) one would know exactly why. It would counteract the slowing of velocity, ease excess demand for money, stabilize markets and keep more people from needlessly losing their jobs.
I guess that is too much to ask of narrow-minded miscreants who think that stuffing mattresses for tax-free profit is the way we should be making money and have so much faith in their economic religion they forgot that we have global markets for commodities, and not every country has a messed up central bank. Never mind that the deflation they cause hurts their own income because all prices adjust, not just the value of money. It’s a WASH.
Beyond that, they only tell part of the truth. They don’t talk about the tradeoff between something like the plan in this article and maybe a percentage point more of inflation, which is already historically low (1.5%!!!), and the spending of posterity’s money on the explosion of social spending that is required when monetary blunders cause a crisis in self-sufficiency. The explosion of national debt tells quite a disturbing tale of not having enough taxpayers to support the people who got caught up in this mess in addition to all of the people who already had claims. Obama is only part of the problem – Bernanke and company with their PCE targets and bull crap forecasts are the rest. But I guess that is just fine to keep oil prices down by squelching demand for everything, when they really don’t understand how expensive that oil ends up being after all of the negative economic effects are factored in, including the opportunity cost of investments that will never be made. These people disgust me to the core.
They like to bash Obama for not following the law. What about the law regarding monetary policy? I wrote a post on it already, and they don’t seem to care about the law when it doesn’t suit them. They seem to be as guilty as anyone else in pretending that their preferences are law without following the process like they expect everyone else to do it. Well, I think we all know the reason they don’t go through the political process to change the law – because that would mean taking responsibility for the mess.