Larry Kudlow, Krugman, Delong, and the Day I Achieved Nirvana

     Ok, not quite Nirvana but close enough. How about making the front page of Brad Delong's blog? For me that's close enough to Nirvana. It's like a Nirvana for econ nerds. So here at Diary we've achieved a new nadir. It's all about the N's-Nirvana and nadir.

      We've had other watersheds like the time Brad put me on his Twitterstorm.

      http://diaryofarepublicanhater.blogspot.com/2011/11/nick-rowe-answers-my-post.html

      There's been other nadirs since like Lars Christensen writing about me, Marcus Nunes and Rowe being regular Diary readers. However, this is a new nadir.

      http://delong.typepad.com/sdj/2013/07/noted-for-july-12-2013.html

      So Scott Sumner? The spotlight is on you. When are you going to stop pretending you have something better to do and just admit that my blog is great and you read it all the time? I'm just saying.

       Ok. I feel like I should write something substantive-though I love to strut I should do something substantive as well. Well, if you're reading this what do you think about Sumner's claim that we have easier money based on the discount factor?

        http://diaryofarepublicanhater.blogspot.com/2013/07/taper-talk-and-feds-monetary-stance.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29

         The Diary of a Republican Hater reader Nanute-my friend and benefactor-yes, I got a benefactor isn't that impressive? Of course what it means is I'm dirt poor and have a guy willing to buy me lunch once a month because of my clear great contributions to human science and your higher culture. Or so I tell myself.

        Look, I'm so excited by Brad's plug that I just told my Mother-wasn't hard to do she lives up stairs. Now you get why I think of this as one of the happiest days of my life-LOL.

         Anyway, my benefactor Nanute-I just love having the excuse to say that. Nanute is a good guy he lets me get away with calling him that. He alerted me to a very good discussion over at the Angry Bear between JazzBumpa and Mark Sadowski-Marcus Nunes also through in a post.

         http://angrybearblog.com/2013/06/jzb-smackdown-with-some-thoughts-on-trends-and-context.html

           http://angrybearblog.com/2013/07/the-standard-deviation-of-ngdp-growth-during-the-great-inflation.h

          http://angrybearblog.com/2013/07/the-standard-deviation-of-ngdp-growth-during-the-great-inflation.html

        

          I am going to have more to say about it but for now suffice it to say that there seems to be a lot riding on this debate. The Market Monetarists have argued that somehow the fact that we haven't gone off a cliff totally in this year's economy proves that the 'fiscal multiplier is zero' and that austerity is incapable of hurting the economy. 

          Sumner in particular seems to think that the Fed is omni powerful at least in terms of its-limitless-ability to stabilize the business cycle. JB and Sadowski then seem to get into a deep debate of the question whether or not very stable NGDP growth shows that fiscal policy is ineffective. 

         It's an argument that can be made two ways. You can argue either that stable NGDP proves no such thing or that it hasn't been so stable. It seems that JB does a lot of arguing in this second vein. Again, I'll have more to say later. If you haven't read about it t-as I hadn't until today-this is a very interesting and important debate. 

         P.S. What I find interesting is that Bernanke himself is much less convinced of his own omnipotence. He clearly thinks there's a major role for fiscal policy-which has been clear at least since he insisted to Hank Paulson back in 2008 after the AIG bailout that he needed to speak to Congress-that the TARP was a job for the fiscal authorities not the Fed. 

         http://www.amazon.com/Brink-Inside-Collapse-Global-Financial/dp/B006CDD6K0/ref=sr_1_1?s=books&ie=UTF8&qid=1373598390&sr=1-1&keywords=hank+paulson+on+the+brink