One of my most read posts ever was the time I wrote about Nick Rowe simply leaving a comment on my blog. That was heady stuff. To say I was excited, is an understatement.
http://diaryofarepublicanhater.blogspot.com/2011/11/nick-rowe-answers-my-post.html
Technically, it's the third most popular though since I had my web consultant do a little touching up on my layout, where they gave me a 'popular post' list, that Nick Rowe post has more than doubled in all time views and keeps rising. However, my second most read post is An Anatomy of a Scott Sumner Post and it too has been growing by leaps and bounds.
http://diaryofarepublicanhater.blogspot.com/2012/04/anatomy-of-scott-sumner-post.html
At the rate they are both being read now, it seems that soon Nick's post will be second as my current all time most read post Erin Burnett's Fact Checking Flop hasn't gotten read much since the the addition of the popular post list, though it's listed at the top. Incidentally, what put my Nick post on the map was that Delong put it on his Twitterstorm-he clearly read it as well and loved my referring to Nick as a 'monetary rock star.'
However, if anything, this is headier stuff, as a question I poised to Nick in a recent post on the issue of austerity has inspired a post of his own. Actually the post is largely a direct quote of what he said in a comment to my original post. I initially had asked him about his position on austerity.
"not all the Market Monetarists seem to be trying to justify austerity. Nick Rowe doesn't seem to at all as best I can tell. Nick, if you're reading maybe you can elaborate your position."
http://diaryofarepublicanhater.blogspot.ca/2013/06/marcus-nune-salim-furth-and-case-for.html
He went on to do just that. Again, he basically made a post out of the comment he left so I'll quote his entire-very short-post here.
"Words matter. You can't have an intelligent discussion about fiscal policy if you use loaded and misleading words to describe fiscal policy."
Now I could grouse that he could have mentioned my post that inspired his question. I know, a tacky concern. for my own self-promotion., though I never said I was above self-promotion... He does mention me in the comments section.
"The "own goal" has been scored by those who have used the word "austerity" as a name for the position they oppose. I wrote this post becausesomeone asked me, quite unironically, what my position was on "austerity". By that he meant, what was my position on running deficits in a recession. Or read Gizzard's comment above, where he says that cutting government investment projects is austerity, because it reduces the consumption of those households employed in those investment projects. This just invites the reply: "You mean the government has to keep on spending money it can't afford just for make-work projects?"
http://diaryofarepublicanhater.blogspot.com/2011/11/nick-rowe-answers-my-post.html
Technically, it's the third most popular though since I had my web consultant do a little touching up on my layout, where they gave me a 'popular post' list, that Nick Rowe post has more than doubled in all time views and keeps rising. However, my second most read post is An Anatomy of a Scott Sumner Post and it too has been growing by leaps and bounds.
http://diaryofarepublicanhater.blogspot.com/2012/04/anatomy-of-scott-sumner-post.html
At the rate they are both being read now, it seems that soon Nick's post will be second as my current all time most read post Erin Burnett's Fact Checking Flop hasn't gotten read much since the the addition of the popular post list, though it's listed at the top. Incidentally, what put my Nick post on the map was that Delong put it on his Twitterstorm-he clearly read it as well and loved my referring to Nick as a 'monetary rock star.'
However, if anything, this is headier stuff, as a question I poised to Nick in a recent post on the issue of austerity has inspired a post of his own. Actually the post is largely a direct quote of what he said in a comment to my original post. I initially had asked him about his position on austerity.
"not all the Market Monetarists seem to be trying to justify austerity. Nick Rowe doesn't seem to at all as best I can tell. Nick, if you're reading maybe you can elaborate your position."
http://diaryofarepublicanhater.blogspot.ca/2013/06/marcus-nune-salim-furth-and-case-for.html
He went on to do just that. Again, he basically made a post out of the comment he left so I'll quote his entire-very short-post here.
"Words matter. You can't have an intelligent discussion about fiscal policy if you use loaded and misleading words to describe fiscal policy."
"Cancelling or postponing a government investment project might be a wise decision. Or it might be a foolish decision. But it is not "austerity".
"Implementing or preponing a government investment project might be a wise decision. Or it might be a foolish decision. But it is not "profligacy".
"Real economists talk about "tightening" or "loosening" fiscal policy. They don't talk about "austerity" or "profligacy". Not when they are talking among themselves. Or they shouldn't. They don't even talk about "fiscal stimulus", which is another loaded question-begging word."
"Austerity" and "profligacy" are perfectly good words to describe the consumption decisions of a household. But they are bad words to describe the consumption and investment and taxation decisions of a government. Because public finance is not like household finance."
"Economists are supposed to understand the difference. So they shouldn't use words that obfuscate the difference."
"There is one important exception, where economists should talk about "austerity". And it's an exception that proves the rule."
"It would be perfectly correct for economists to say that the UK government in the Second World War had a policy of "austerity". Because the purpose of that policy was to drive down household consumption as low as it could reasonably go. So it would free up as many resources as possible for the war. Yet at the same time the government ran very large deficits. Fiscal policy was extremely "loose". "Austerity" does not mean "tight fiscal policy".
"(They implemented austerity by a mixture of: rationing consumer goods; persuading people to save by buying war bonds; and directly controlling the supply-side, so that firms that used to produce consumer goods were told they had to produce weapons instead.)"
Now I could grouse that he could have mentioned my post that inspired his question. I know, a tacky concern. for my own self-promotion., though I never said I was above self-promotion... He does mention me in the comments section.
"The "own goal" has been scored by those who have used the word "austerity" as a name for the position they oppose. I wrote this post becausesomeone asked me, quite unironically, what my position was on "austerity". By that he meant, what was my position on running deficits in a recession. Or read Gizzard's comment above, where he says that cutting government investment projects is austerity, because it reduces the consumption of those households employed in those investment projects. This just invites the reply: "You mean the government has to keep on spending money it can't afford just for make-work projects?"
"The "Austerians" have won, because even their opponents have adopted their language. "Austerity" now simply means "let's have balanced budgets, even in a recession".
So I get mentioned in the comments section at least-but of course it was way down and how many readers get down that far? Ok, enough with my tacky concerns. Though another proud day for me was when Nick's friend and fellow Market Monetarist, Lars Christensen, did mention me in a post, actually wrote a post about a post of mine. That was heady stuff too.
Overall, I must say, that while I question them on fiscal policy, I have nothing but good things to say about most of these Market Monetarist guys, personally. I mean they've all been very good to me-with the exception of Sumner, himself. However, Lars, Marcus NuNines, and Nick have all ready my blog-clearly Nick and Marcus at least read it quite often-and David Glasner always has thoughtful and fairminded comments for just about all commentators on his blog.
Scott himself, has and taught me a lot, but has never been a fan of mine and often gets quite unpleasantly snarky when questioned. It's been my feeling that he's gotten worse in this regard, He did agree with me there to his credit. And I have learnt a lot from him in all fairness.
Ok, how about some actual substance on what Nick is saying? Whether he's right or not about the term austerity it can be asked what do we gain if we were to listen to him and adopt his definitions and never speak of austerity but fiscal tightening?
Whether you call it austerity of fiscal tigthening, I still object to insisting on balancing the budget during a bad recession. I certainly agree with him that public finances are different than individual finances which is something that the austerians never admit: they talk about how a 'the government finances are like a household's. You can't live beyond your means and neither should the government.'
I'm still not sure about this distinction that austerity only applies to household consumption. Keynesians believe that fiscal tightening leads to a drop in household consumption by depressing demand. The British program of the 40s-which Nick believes is a rare case of genuine government austerity-wasn't even meant to cut net spending but to simply redirect it. If one goes with national income accounting, is total spending decresaed? No, it's redirected. In the U.S. it's widely believed that WWII spending was what finally ended the Great Depression. After all, if GDP=C+I+G+NX, then in the case of Britain, C decreases in favor of G, but the net GDP or output doesn't change. It seems to me that what critics of austerity have in mind is that the fiscal tightening will lead to a drop in net spending in the economy-or Sumner's NGDP. I notice that the distinction between NGDP and GDP gets confusing. It's like the Diary of a Republican Hater reader Greg says. GDP is measured in nominal terms to begin with.
Yet, whether we agree about the correct use of austerity or not will it change the contours of debate? I don't see why. Those who want fiscal tightening will still want that and those who want loosening will still call for that.
UPDATE: Nick actually elaborates his position more in the comments section of this analyzed post.
"I think I would object to the word "Austerian" too. I would prefer: "the nutters who think that because central banks have screwed up and let NGDP fall below trend therefore we all have sinned and must punish ourselves". Or if Determinant can come up with something catchier and theological?"
UPDATE: Nick actually elaborates his position more in the comments section of this analyzed post.
"I think I would object to the word "Austerian" too. I would prefer: "the nutters who think that because central banks have screwed up and let NGDP fall below trend therefore we all have sinned and must punish ourselves". Or if Determinant can come up with something catchier and theological?"
"BTW, my own post on "How can we spot a boom?" was my version. There is something irrational in the belief that because we are worse off now than in the past, that past must have been an unsustainable illusion for which we are now paying the price. Economists who complain about "Austerians" should instead try to figure out how we can spot a boom, and think about Milton Friedman's plucking model."
"In the right circumstances, Austerity is a good thing. And in the right (often very different) circumstances fiscal surpluses are a good thing too. We don't want to discredit these ideas."
If so, they're definitely not good things right now. If there is ever a time for a budget surplus, now is not the time. I see that Nick's reader, Determinant took up Nick on a new term.
"Flagellants (as caricatured by Monty Python and the famous board-knocking) were a real sect, and disclaimed as heretical and crazy by everyone."
"Fiscal Flagellants, perhaps? Except they're never Auto Fiscal Flagellants as they always want to cut other people's benefits, not their own."
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