I have to admit that I was wrong. In the week since I decided to take a break from politics and monetary policy, thinking that being distracted by it was harmful, things haven’t gone so well. It’s been an awful week (and it’s only Wednesday). I piled on the work and found that I can only juggle so many things before I start dropping balls. I didn’t make any major mistakes, you know, the kind that gets one escorted out to the parking lot, but my credibility is a little worse for wear. Perhaps I am better off, at least for now, being a little distracted until I can get used to a heavier workload – hopefully I can make up for not being at 100% the last couple of days with a stroke of brilliance some time soon.
I was curious about how the “War on Inflation Targeting” has been going without me and decided to take a look. Marcus Nunes is talking about Poland and Sweden. Scott Sumner presented example #397 of never reasoning from a price change. Lars Christensen is talking about the setback in Japan. All of them are very good posts.
Ben Southwood of the Adam Smith Institute posted a question for Market Monetarists after having a chat with George Selgin. Anyone care to address it? I would but I am not the best suited to respond, being part of the “echo chamber” and not an economist. I could give him an encyclopedia-sized response full of links and references to the MM blogs, but it probably deserves a personal touch since MM has made its way onto the Adam Smith blog and the topic is being debated more publicly in the UK. There are quite a few inflation-Chicken Littles and bubble fear-mongers there; and it would be good, I think, to get the Market Monetarism debate going on their home turf. Perhaps there is a chance to persuade some of them which could end up being a big win.
And now, I shall flip on the rant switch.
Kocherlakota sometimes says things that completely hit the target. As Marcus Nunes pointed out, while Kocherlakota was in Turkey, he said something to the effect that having a low ceiling on prices is a really bad thing. No kidding.
Perhaps being late to have that observation, that stroke of brilliance one can get from an Econ-101 AS/AD model is better than never at all. But what about the garbage he peddled back in April about using QE to lower interest rates and, and on the flip side, stoking speculative bubbles? He truly is a man for the audience, now isn’t he? Sometimes I wonder when any one of these people who call themselves central bankers will man up and talk about how bad having too low of a ceiling on price movement truly is, here on American shores, out loud and within earshot of an American financial reporter so we can all share in their stroke of brilliance. We’ve heard enough B.S. We’ve had enough distraction by empty and deceptive rhetoric. There is simply no excuse for knowing the truth and not doing right by the people with it. It does no good at all to tell to Turks while the financial suffering continues at home.
Perhaps he just doesn’t have the cajones to be a hero at home. It really is a crying shame.