I’ve been traveling over the last week. I had only my iPad and smartphone with me and therefore didn’t do a lot of posting. But I did notice some better posts than the one I did on Ted Cruz’s interrogation of Janet Yellen. Scott Sumner’s is here and David Beckworth’s is here.
I like these posts as they encompass many of the main ideas of Market Monetarism with some additional ideas that I had brought up from time to time, such as the sterilization of the bank lending that was apparent in one of Christina Romer’s early crisis analysis papers and confirmed by the transcripts from the June 2008 emergency FOMC meeting.
I can just feel the MM momentum building, and it’s fantastic even if the right people are not credited for those additional ideas. Christina Romer deserves credit for drawing attention to the sterilization mess as well as George Selgin for picking up the ball and running with it. Had George not run with the idea, I am not sure we’d be popping open the champagne bottles in mini-celebration now.
And here is another idea I came across as I was reading about the US oil rig count starting to dwindle. It’s a play on the difference between the ideas of having too much demand for gas, or too little gas for the demand that drives the price movements for transportation fuel. This time around, instead of having too much gas for the demand, I wholeheartedly believe we have too little demand for the gas – and we can clearly see the tradeoff involved with the current expected path of monetary policy – people are already losing their jobs and for what good reason I do not know. Though, Yellen and crew seem to think it is necessary to prevent inflation from rising above 2% in any given time period. And with that said, I shall let my readers be the judge as to the necessity of tight money.