I often joke that Money Illusion commentator Morgan Warstler is Scott Sumner's alter ego. If anything if Scott's strategy at co-option is as brilliant as Morgan thinks it is-I think it is-then Morgan should probably shut up.
Of course he won't and that's why you have to love this Far Right Tea Party crank. While most conservatives do what Judge Judy talks about-they pee on your leg and tell you it's raining-Warstler comes right out and tell you "No, I am peeing on your leg, it is not raining."
Take Sumner's recent post "Soros Was Right."
http://www.themoneyillusion.com/?p=13981#comments
Listen to Scott credit Europe as his best students for Market Monetarism (MM).
"I started my blog with a focus on US policy, but I’m actually seeing more signs of market monetarist influence in Europe than the US. That’s probably because although fiscal stimulus won’t work in either region, the impossibility of fiscal stimulus is more obvious in Europe. Hence money is the only game in town."
This might seem ironic. I mean you would think the Europeans were failing. They have relentlessly pursued mindless austerity, they tightened monetary policy last year when they were still far below and trend NGDP or inflation targeting path and even go as far as to celebrate last year's raise in rates as a victory. Sumner himself has heaped scorn on that. Indeed they now stand ready to start tightening again.
In the US whatever you think about US monetary policy it has been considerably looser than Europe. So what gives? His praise of Europe can only be if his main aim is less about monetary loosening than fiscal tightening. In that case Europe has gotten us beat in spades. While they enjoy their Scott Sumner first place ribbons in Market Monetarism they can also enjoy being on the brink of recession while the US continues to grow and recover.
But then here comes Morgan in the comments again giving the game away.
Over and over…
"IF you buy the premises of MM, “fiscal not needed” isn’t really optimal.
The real optimal fiscal policy under NGDPLT is “cut spending to match revenue”
If we can trust the CB to keep the NGDP on track it can do it just as well while we are firing public employees (increasing public worker productivity)
Check out how awesome Estonia is doing:"
http://www.guardian.co.uk/technology/2012/apr/15/estonia-ussr-shadow-internet-tita
Yes, Estonia-that is the model that MM has in view. If only he were joking. Sobering stuff.
However, just in case this is still all to subtle to you-subtlety as you can see is one of Morgan's vices-here he is again:
"Let me pose a thought experiment, which BTW getting people here to entertain is not so easy…. so extra points for trying."
—–
"There is a great god called MARKET which generally loves some more than others….
Suddenly, he is made angry and points an a group of people and says, “THEY SHALL HAVE MUCH LESS RELATIVE TO ALL OTHERS”
"Now, you are a policy maker, and you are not only not a god, but you TRULY accept the dominance of MARKET."
"Here’s the question:
"Why not just drag the losers MARKET hates into the public square and reduce them compared to everyone else?"
"Why not do it AS FAST AS POSSIBLE."
"Why do we hide the losers in the basements and closets and have the whole town shit on?"
—–
"The question is NOT how could we have gotten our economy moving again without the losers losing."
"The question is how can we more quickly screw the losers into the ground without remorse."
"The fastest way out is out was Obama making like Clinton, throwing people out of the wagon, and leaving the Fed to solve the problem."
So what does Sumner have to say about this? Here is his answer to Morgan:
"Morgan, I agree Obama should have been more like Clinton."
Again, Sumner aims not so much at monetary stimulus as fiscal austerity. Why else would he say that Europe is doing better at MM than the US where we have had both more monetary stimulus and less fiscal austerity.
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