Feb 2009 is when I joined the Market Monetarist camp. I say joined because I can’t really be a Market Monetarist in practice, but I offer everything I’ve got to try to support the MM economists on the “front lines.” Scott Sumner was the evangelical who persuaded me that there are many different ways to look at a problem, not just the popular explanation. But also his arguments are very compelling logically; as many salvos that have been launched that I know about, none have come close to persuasive counter arguments. I’m not looking for a silver bullet, just something that works better than the ongoing disaster of policy.
I believe Scott’s correct that the Great Recession didn’t have to happen. But I’m not looking to dwell on the past or for justice necessarily. All I’ve really wanted these last 20 months I’ve spent here on my own blog and two years before that publishing diaries on a popular conservative website is for the powers that be to just do the right thing for everyone. There is a way out that could quite possibly be more or less a win-win and for some unknown reason it hasn’t been taken. They’re still playing with QE and mish-mashed targets on what seems like a fool’s errand while mass economic suffering continues. Why not at least try the alternative rather than spend all this time, perhaps forever, trying to fit a square peg into a round hole? It is truly heartbreaking to live it and witness both sides of the struggle. Sadly, it is what is.
I have a copy of Herbert Hoover’s Magnum Opus. It was a work he spent approximately half of his life writing. When it was complete, two weeks before his death, he altered his will to leave specific instructions for its holding and much later publication. Later, historians attempted to piece together why he would have dedicated much of his life to the work and not publish it, determining that at least one of the factors was that he did not want to sully the names of men with whom he had unsurpassable disagreements. Basically, what started out as a project of passion, and perhaps revenge, taught him that even people we disagree with can be trying to do the right things in their own eyes, and likely did not deserve the punishment he would have heaped upon them.
The recent disagreement about Milton Friedman between David Glasner and Scott Sumner brought to mind that Friedman did nearly the same thing with his monetary history, not having what he already knew published until the people involved had passed on. I am not so sure that discretion is always the better part of valor, however, but it is likely closer that I care to admit most of the time. The right time and place for such ‘truths’ to be revealed is not always so easy to spot. I just could not keep that kind of secret while knowing the misery being perpetuated by a rather consequential and avoidable mistake.
I have a lot of questions for which I am aware there will never be answers. One such question is if these people are New Keynesians, or any other kind of Keynesians, how could they adopt headline inflation targeting when it is easy to see on a simple AS/AD model what happens when a negative supply shock is not allowed to turn into inflation? I know of no such theory that presents the economic sacrifice of families in order to keep prices from rising, or perhaps to preserve the independence of the central bank as a public welfare-inducing good idea. Is it even a good governance structure, that in a worst case scenario, everyone and everything else goes down the tubes while the central bank lives on after having not only set up the fall but also did nothing to mitigate it? Really, I think that to be quite a perverse view of public service. But it happened in the EZ, and to some extent here in the US with the specter of BIS still floating around in the halls of Congress and elsewhere. I find the arrogance revolting and ignorance of the blatantly obvious breathtaking. I try not to think about it, but I just wasn’t wired to be able to become detached from it, as it is just some sort of terrible B-movie.
I remember my own struggles to stay above water, and I think about the woman without the winter attire and holes in her gloves on a sub-zero Fahrenheit day. I think about my daughter moving cross-country for a job that fell through, and the girl at work, about the same age as my daughter, who moved back in with her parents because she couldn’t make it on her own. I think about people being hungry at work because their spouse lost a job, and my close friend who lost everything and nearly starved while I had not the means to help; and the many more I don’t know who show up as statistics.
It’s all very difficult to reconcile with anything that makes sense. I’m not used to this kind of disorder and dysfunction. It’s all quite new to me, and I’m still struggling. I still have hope, however. It cannot rain all the time.