This morning I started a post on the possible meaning of a change in activity on my blog site that I had every intention to post. It was titled The economy is better, but concerned about monetary policy you should be. I decided not to publish it because it went south when I arrived at the topic of the impact of current political circumstances on monetary policy with the likelihood of Republicans taking over the U.S. Senate. The recent devolution of Republicanism into far right statism still inflames my sensitivities, and the post itself devolved into an unrecoverable rant as I went on. I just can’t talk about Republicans having packed the Fed’s Board of Governors with hard core sadomonitarists in the mid-2000’s without losing my cool.
Some, like Ynglesias and Sumner, to name a few, have pinned the blame for the Great Recession on Obama’s cluelessness and bad macro advice early in his presidency that caused him to leave seats on the Federal Reserve Board of Governors open in 2009-10, and then appointing more sadomonitarists when he finally filled them. I don’t necessarily disagree. It’s all true. But I can’t so easily discount the part Republicans played in creating the policy crisis in the first place. GW was on his way out the door when the thick of the crisis occurred, which means the most impactful portion of monetary policy failures happened on his watch. Obama just didn’t know what to do to straighten out the mess, and I am not sure to what extent Republican push back on monetary expansion had to do with Obama’s reluctance. Don’t get me wrong. I don’t like Obama and never have. Nearly everything his administration touches gets messed up. But I don’t blame him for having listened to Larry Summers at a time when it appeared as if liberal (as in the classical definition) economics failed. The Republicans, on the other hand, the ones who supposedly had the political market cornered on economics, don’t really have any excuse for being so stupid after neglecting to ensure adequate energy commodity supply.
I do not feel comfortable with the current state of monetary affairs, with no meaningful nominal target and no rules by which to govern policy, yet in some ways it feels like belaboring the point when I bring it up. Activity on my site is down considerably from a year ago today, with the majority of decline in search hits. The most popular post on my site has been The idiot’s guide to inflation. Even it only received a few hits in the 3rd quarter; and I think it’s because people are starting to feel better, a little more secure, and are going on about their lives.
On the radio this evening while I was headed home from the grocery store, the host was talking about economics, saying that things are looking better with the unemployment rate down, and more than 200k jobs created nearly every month this year. It in some ways confirmed my suspicion about why my site activity has declined. But then he said some things that were just wrong when he started talking about the Fed having to raise rates soon because with more people being employed it will mean prices will start to rise, to which Marcus Nunes has a great post regarding the revival of the long discredited theory of cost-push inflation… and radio host thinks full employment is synonymous with the headline unemployment rate.
This just goes to the point that almost no one is the wiser about macro than they were 8-10 years ago. We haven’t had the public debate necessary to put all of the fallacious arguments about the origins of inflation to bed forever, leaving us vulnerable to inflation nutter talking heads and monetary policy that is in disarray. These talking heads don’t seem get how incredibly bad it sounds to say something like, ‘if so-and-so gets a job, or if maybe a handful too many so-and-sos get jobs, it’s a bad thing for everyone else. Well, duh – only if the supply side is a real mess – and btw, the economy is global and there are ~7.2 billion people on the planet, about half to 2/3 of which have nothing to do but try to scratch a living off rocks. I just don’t know how mentally retarded one has to be to have such an argument leave one’s lips – that people obtaining a means of survival here in the U.S. is detrimental to the general welfare. Thoughtful, aren’t they. Some of you get to have jobs. But the rest, it’s just too bad – you and your pitchfork should drop us a line some time and let us know how you’re holding up. It might even sound appealing to some, as long as the person being left with the pitchfork is someone else.
PS: I vote with my pocketbook.