Anyone who has been a regular reader of my blog knows that I have always looked at the question of MM in an evenhanded, honest way.
Sadowski's jibe at me.
That was at Interfluidity, and it was over a month ago. Since then your comments have been completely devoid of substance and they have become increasingly personal over time. At this point I find your behavior more disturbing than any other single commenter I interact with.
Daniel's claim that I and 'my ilk' are responsible for the current mess.
"You know, as much as I love taking shots at the Austrians – they’re actually harmless. They’re just a bunch of kooks with zero influence."
Note how he flatters me-he thinks that I'm a person of influence that is hurting the MM case.
Even Sumner as much as he tries to disparage me, seems to misfire if his goal is my discouragement. When he claims that I;m 'unqualified' to write a blog about economics he must know this will have the opposite effect to what he wants-me ceasing it.
Again, there's implicit flattery here: he worries that people are reading this blog-which they are-and that this again may harm the MM case.
The funny thing is that this hasn't been my goal or certainly not my conscious one anyway. I've always said that I find MM very interesting and intuitive-intuitive ideas are by definition interesting, though we know after Kant they're not necessarily correct; it's important to realize that an intuitive idea can be wrong-but that I have some reservations and questions as well.
I've tried to get these questions answered. What I've found is that Sumner doesn't like questions or at least the wrong kind and he has gotten more and more cagey and snarky over time. The funny thing is that compared to most Keynesians out there today, I've not been all that hard on Sumner. Yes I've offered criticism and skepticism but also I've found aspects I think are impressive.
Most liberals don't even try reading Sumner anymore-like Unlearning Econ, or certainly my friend and reader Greg. Many view Sumner and his blog as long since jumping the shark.
This doesn't mean I'm going to change my view I still find it interesting but have my skepticism. I'm not nor have I ever in the past simply attacked out of spite or pique which is more than can be said for Sumner's jibes at me.
You may have noted that Sadowski had made a request of me that I have not honored.
That was at Interfluidity, and it was over a month ago. Since then your comments have been completely devoid of substance and they have become increasingly personal over time. At this point I find your behavior more disturbing than any other single commenter I interact with.
Sadowski's jibe at me.
That was at Interfluidity, and it was over a month ago. Since then your comments have been completely devoid of substance and they have become increasingly personal over time. At this point I find your behavior more disturbing than any other single commenter I interact with.
Frankly I wish you would stop talking to me and about me, and I shall try and do the same with respect to you.
Daniel's claim that I and 'my ilk' are responsible for the current mess.
"You know, as much as I love taking shots at the Austrians – they’re actually harmless. They’re just a bunch of kooks with zero influence."
"It’s people like you, with your mindless repetition of “ZLB means no traction for monetary policy”, who are the source of today’s ills."
Note how he flatters me-he thinks that I'm a person of influence that is hurting the MM case.
Even Sumner as much as he tries to disparage me, seems to misfire if his goal is my discouragement. When he claims that I;m 'unqualified' to write a blog about economics he must know this will have the opposite effect to what he wants-me ceasing it.
Again, there's implicit flattery here: he worries that people are reading this blog-which they are-and that this again may harm the MM case.
The funny thing is that this hasn't been my goal or certainly not my conscious one anyway. I've always said that I find MM very interesting and intuitive-intuitive ideas are by definition interesting, though we know after Kant they're not necessarily correct; it's important to realize that an intuitive idea can be wrong-but that I have some reservations and questions as well.
I've tried to get these questions answered. What I've found is that Sumner doesn't like questions or at least the wrong kind and he has gotten more and more cagey and snarky over time. The funny thing is that compared to most Keynesians out there today, I've not been all that hard on Sumner. Yes I've offered criticism and skepticism but also I've found aspects I think are impressive.
Most liberals don't even try reading Sumner anymore-like Unlearning Econ, or certainly my friend and reader Greg. Many view Sumner and his blog as long since jumping the shark.
This doesn't mean I'm going to change my view I still find it interesting but have my skepticism. I'm not nor have I ever in the past simply attacked out of spite or pique which is more than can be said for Sumner's jibes at me.
You may have noted that Sadowski had made a request of me that I have not honored.
That was at Interfluidity, and it was over a month ago. Since then your comments have been completely devoid of substance and they have become increasingly personal over time. At this point I find your behavior more disturbing than any other single commenter I interact with.
Frankly I wish you would stop talking to me and about me, and I shall try and do the same with respect to you.
I have continued to speak of him despite his request. Why? Well I'm honoring his other request of not speaking to him for the time being until maybe such time that things blow over. He seems to be angry at me or have an onus with me but it's not mutual. I am not at all angry with him. For what reason? I don't know what his problem is but it isn't mine. I guess what he means by personal is that he takes attacks on MM personally.
He unilaterally has demanded this it's not like it is a mutual agreement. As long as he takes an important place in this public debate I will refer to him intermittently depending on how relevant I find it. He can't prevent me from doing this-it's kind of like a public figure may hate you but they cant stop you from reporting on them.
Now let's look at what a genuine critic of MM has said, namely Joe Stiglitz. Sumner is not a fan of Stiglitz but if he knows what he's written about MM it's not hard to see why. Mind you, I'm not sure if Sumner is actually aware of what Stiglitz wrote about NGDP targeting in The Price of Inequality. Whether he does or doesn't, he already hates him anyway.
http://www.themoneyillusion.com/?p=12270
http://www.themoneyillusion.com/?p=12270
Stiglitz argues-on pg. 385, footnote 12-that all kinds of Monetarism, including NGDP targeting make the error of putting far too much focus on real T-Bill rates as determining economic activity. Interestingly in light of the big kerfuffle I got into it with Sadowski, Sumner and that other MM commentator Daniel the other day over the Zero Bound idea and liquidity traps-they have convinced themselves that the case of Switzerland pegging its currency to the euro proved that there is no liquidity trap-they also say that about FDR's gold buying program in 1933 and similar action-Stigliz actually doesn't believe the ZLB is the point. He argues that in a recession like ours, low interest rates could actually be retarding the recovery-this doesn't mean that he's calling for high rates.
He argues that today's Great Recession has been very different from the Great Depression as real interest rates were very high then thanks to the rapidly lowering prices. He thinks that the credit channel is more important than interest rates. Not that he's arguing for high interest rates-I don't think so as he's very critical of the high interest rates used during the Great Moderation-which can also be called the Great Disinflation. Certainly high interest rates can't be helpful, as while they get bank customers some nice interest they retard investment which will thereby retard investment which will actually serve to lower the saving rate, ironically as income will go down.
Overall, I think the MMers are interesting but they need a critical look as well. What I notice is that most liberals and Keynesians basically have moved on from Money Illusion. Unlearning Econ just sees time spent at the Money Illusion as a waste of time as Sumner just plays word games. True, but this is an idea that has gained a lot of popularity. I think that you ignore it at your own risk, and that someone should at least be trying to engage MM with a more critical eye. Even if Unlearning doesn't want to engage in more comments at Sumner-and who can blame him, as my experience shows it is turning into a very nasty business-maybe he could write a post or two now and again to counter the spin. I think Sumner has been pretty effective and many who genuinely are suffering have bought into him hook, line, and sinker to save them with NGDPLT.
The common types of comments you get form Keynesians and liberals is like these over at Pragmatic Capitalism.
PeterP says:
Read more at http://pragcap.com/budget-deficits-contribute-to-corporate-profits-but-dont-matter-right#CRaUORf5RXy1OtTk.99
Now let's look at what a genuine critic of MM has said, namely Joe Stiglitz. Sumner is not a fan of Stiglitz but if he knows what he's written about MM it's not hard to see why. Mind you, I'm not sure if Sumner is actually aware of what Stiglitz wrote about NGDP targeting in The Price of Inequality. Whether he does or doesn't, he already hates him anyway.
http://www.themoneyillusion.com/?p=12270
http://www.themoneyillusion.com/?p=12270
Stiglitz argues-on pg. 385, footnote 12-that all kinds of Monetarism, including NGDP targeting make the error of putting far too much focus on real T-Bill rates as determining economic activity. Interestingly in light of the big kerfuffle I got into it with Sadowski, Sumner and that other MM commentator Daniel the other day over the Zero Bound idea and liquidity traps-they have convinced themselves that the case of Switzerland pegging its currency to the euro proved that there is no liquidity trap-they also say that about FDR's gold buying program in 1933 and similar action-Stigliz actually doesn't believe the ZLB is the point. He argues that in a recession like ours, low interest rates could actually be retarding the recovery-this doesn't mean that he's calling for high rates.
He argues that today's Great Recession has been very different from the Great Depression as real interest rates were very high then thanks to the rapidly lowering prices. He thinks that the credit channel is more important than interest rates. Not that he's arguing for high interest rates-I don't think so as he's very critical of the high interest rates used during the Great Moderation-which can also be called the Great Disinflation. Certainly high interest rates can't be helpful, as while they get bank customers some nice interest they retard investment which will thereby retard investment which will actually serve to lower the saving rate, ironically as income will go down.
Overall, I think the MMers are interesting but they need a critical look as well. What I notice is that most liberals and Keynesians basically have moved on from Money Illusion. Unlearning Econ just sees time spent at the Money Illusion as a waste of time as Sumner just plays word games. True, but this is an idea that has gained a lot of popularity. I think that you ignore it at your own risk, and that someone should at least be trying to engage MM with a more critical eye. Even if Unlearning doesn't want to engage in more comments at Sumner-and who can blame him, as my experience shows it is turning into a very nasty business-maybe he could write a post or two now and again to counter the spin. I think Sumner has been pretty effective and many who genuinely are suffering have bought into him hook, line, and sinker to save them with NGDPLT.
The common types of comments you get form Keynesians and liberals is like these over at Pragmatic Capitalism.
PeterP says:
Sumner is just a troll. He is not an economist, that would be a joke. He has been wrong about everything in this crisis, austerity, QE efficacy, banking, you name it. That is why he is upset. Watching him repeatedly trying to argue with accounting is hilarious.
- AgreeCant even read the guy anymore. He’s like that DB that celebrates his interception after being torched for 5 TDs with all his cheerleading any positive data point that he can somehow relate to his monetary policy of choice.He has been manic depressive about Japan. Sometimes gloating other times more cautious.
- Agreed. I used to read Sumner all the time, then I found this place. It’s 1000 times better and I actually understand how the monetary system works now too.
Read more at http://pragcap.com/budget-deficits-contribute-to-corporate-profits-but-dont-matter-right#CRaUORf5RXy1OtTk.99
I remain one of the few non MMers who still read him and try to engage though it's obviously very unappreciated by Sumner and friends.
I don't think it's necessary to engage him on the blog-not many would like to do what I do there. However, it's a topic that I hope more bloggers hit on. I don't think Krugman fully appreciates that Sumner is really the biggest threat to the future of Keynesianism. Not that I think-as Sumner might like to imagine-that he is somehow seriously damaging Keynesianism, just that in the near future policymakers may be taken in by Milton Friedman 2.0's $2 bill.
P.S. Daniel really does flatter me-he thinks I'm a person of more than zero influence. Even Sumner's endless jibes at me as not being 'qualified' to write a blog about economics, is implicitly flattering me as he suggests that I'm literally miseducating the public. Patrick Sullivan says I lack self-awareness. How much to you think Sumner has? Certainly not enough to even spell the word projecting much less recognize that is what he's dong in his attacks on me. Again, though it's flattering that he worries about all these people reading me. You can annoy him too...
Just keep reading me and tell all your friends and family, proselytize, resolve in your mind that you won't rest until everyone you know reads me. If you want to... LOL
P.S.S. I guess the one kind of sort Keynesian that seems to do ok over at Sumner and gets along very well with Sadowski is Tom Brown. Maybe that's partly because he tends to focus more on the technical side of things rather than the visceral politics.
P.S.S. I guess the one kind of sort Keynesian that seems to do ok over at Sumner and gets along very well with Sadowski is Tom Brown. Maybe that's partly because he tends to focus more on the technical side of things rather than the visceral politics.
I'll say this about the MMists (in their defense):
ReplyDelete1. I don't think you have to be a conservative to be an MMist. It helps if you're a libertarian and a Milton Friedman fan, but it's not actually necessary.
2. I don't see them as bomb-throwers. A lot of the Tea Party folks have worked themselves (or have let themselves be worked) into a tizzy about the size of government and the debt. They are convinced that the both need to be dramatically reduced ... NOW! Not even Lars Christensen thinks that's as big an emergency as they do (see his latest "tin foil hat" article).
3. I think they genuinely want a better economy than what we have now. They might be wrong about how to get there, but that's at least a noble goal. I don't think they want to stick it to the "lazy people" or immigrants or the 47% or the 99%. I have some real reservations about Tea Party people and cynical billionaire plutocrats in that regard... but MMists in general... I give them the benefit of the doubt. Even Morgan Warstler (who in my opinion is wrongly focuses on reducing the size of gov above all else) I hold in higher regard than the billionaire cynics, Tea Party, and right-wing hate-on-Obama-24/7 media.
When I see Tea Party types with their signs showing Obama as simultaneously all of the following:
Delete1. Nazi/Hitler/fascist
2. Marxist/Maoist/Stalinist
3. Iron-fisted ruthless Tyrant/King/Dictator
4. Weakling coward "boy"
5. Diabolically clever Dr. Evil
6. Bone-through-the-nose ignorant Savage or Ape
7. Muslim/Al-Qeda member
8. Atheist/God-hater
... my conclusion is they see him as just a plain monster. He is the embodiment of all their fears however contradictory. Anything negative about him is immediately accepted as true with no further thought given to it. It's impossible to be too extreme. No checking for internal consistency. It's at that point I have a hard time seeing the rabid opposition to him as being based on anything but out and out ignorant fear, paranoia, xenophobia, and yes, bigotry.
I know Tea Party people HATE to be accused of bigotry... and love to show off the Hispanics or blacks that are part of their camp. And I truly don't think it's JUST Obama's color that sets them off: it's the combination of his color/international-past/Keyan-father/Arab-sounding-name/manner of speaking/party. That alone would not account for the vitriol... but it provided the seeds needed to be exploited by the true scum of the Earth: the right-wing media entertainment complex, which is nothing but a bunch of irresponsible profiteering hucksters, who have zero ethics. They are borderline sociopaths, playing to the worst of the worst aspects of humanity.
And it's the conspiracy theory element which is a common thread. That's why I don't like the Austrian school very much: it seems to me to be the most amenable to be picked up by conspiracy theorists. I really hate conspiracy theories, right or left.
At the very least the MMists, and the traditional monetarists don't stoop that low. There may be some that pander to the cynical billionaire plutocrats, but at the very least the cynical billionaires (though probably sociopaths themselves) like stability. There is an anti-establishment strain in the Tea Party which is distrustful of this billionaire set... and that at least I can sympathize with a bit, but pretty much everything else about the Tea Party repulses me. Maybe I'm being unfair, but that's the impression I have both from the "mainstream" media and media which is more friendly to them.
Put it this way: if we were going to turn the reins of power over the the Tea Party or to the MMists, it's a no brainer for me. I'd chose the MMists in a heartbeat. Perhaps that would be a terrible mistake, but it's my gut reaction. I think the Tea Partiers are just too ignorant, impatient, destructive, bigoted, arrogant, enraged and hateful to be trusted. At least the MMists are just arrogant :D ... they may even be capable of learning something, who knows! (not that I could teach it too them... I mean learn something from reality if they had the reins of power). I'm not sure the Tea Party is capable of any learning whatsoever.
I'm not sure there's as much difference between the Tea Party and the MMers as you may think. Ok, I'm playing Devil;s Advocate here. Still, consider two people: Sumner and Ted Cruz.
DeleteYou think they're miles a part, but are they? One way of looking at it is this: what is it that Ted Cruz believes that Sumner doesn't? On real policy-and accusing Obama of being born in Kenya is not a policy-I don't know that there's much disagreement between the two men.
I think Morgan Warstler is a lot more honest than Sumner and he sees MM as just a really shrewd way to shrink the government way down.
Again, Mitlon Friedman-the father of MM-cared about nothing more than attacking government. When Sumner claims that the fiscal multiplier is zero and that there is full monetary offset, that's just GOP fiscal policy 101
Again, this is the Devil's Advocate position, I realize there is a more charitable view of MM too and I've often considered it. I'm not saying I'm ruling it out now. HOwever, I think that the less charitable view needs to be considered as well.
I'm finding even Sadowski is getting very shrill about Keynesianism. I'm not the only one who's noted this-did you see the questes from Naked Capitalism-sure you did as you read that regularly.
Again, if you give them the benefit of the doubt do you give me a benefit of the doubt 'too If you believe my intentions are good I wonder why Sumner tries to always act like he thinks they're bad when I ask him questions he doesn't like.
Again, I've never been as hard on MM as some other Keynesians are. However, I got to wonder why they're getting so cagey? They see anyone who questions them as the enemy and they defintely see Keynesianism as the enemy.
So you could argue that it's just that MMers have better packaging. It's stil lthe ultimate goal of making sure government doesn't work and that no matter how bad things get, we never use fiscal policy to fight a recession-ie, we reject Keynesianism.
DeleteAgain, this is the most uncharitable view. However, can you see that it's at least plausible?
Well their intentions are good I don't get why they have so much hostiity. I mean do you give me the benefit of the doubt? If so how do you explain the hostility?
ReplyDeleteI too have tried to give them the benefit of the doubt but when even someone like Sadowski who puts on such an heir of resonableness starts getting into nasty snark I wonder why that is.
I like Morgan because he's honest. He tells the truth-and he thinks MM is indeed about shrinking the size of govt above all else.
Sumner defintely seems to have a very dsiparaging view of me-sounding much like the caricatures of the 47%.
I do think you can argue that Sumner;s endless razzing of the Keynesians and his boasting about zero fiscal multipliers and monetary offsets is real, that he's not just joking about that.
You can make the case for your premise that they are genuine and what a better economy, high employment, etc. You can also make the less charitable case that they are basically just about attacking big government in a novel way.
Milton Friedman was no shrking violet about the government. For him government was the enemey-and he's the father of monetarism.
http://www.amazon.com/Government-Problem-Essays-Public-Policy/dp/0817954422/ref=sr_1_1?s=books&ie=UTF8&qid=1382661622&sr=1-1&keywords=milton+friedman+government+is+the+problem
"I don't think you have to be a conservative to be an MMist. It helps if you're a libertarian and a Milton Friedman fan, but it's not actually necessary."
ReplyDeleteHowever, this construes it as just being about the sociology of the invdividuals who call themselves MMers. I'm not claiming that everyone who considers themselves an MMer also considers themself a conservative Republican.
My question is the policy of MM itself-does it necesarily have conservative implications? Morgan Warstler says yes. I find his argument persuausive. If you look at what Sumner says it's not so different.
Mike, here's my take: You could buy into the concept that the fiscal multiplier is zero and still be a centrist or even moderately left of center. I won't attempt to dig up the quotes, but I'll point out places where I think either Sumner or Sadowski have made statements similar to what I write below:
ReplyDeleteJust for laughs, assume they're right. Assume that pretty much (w/ a few exceptions) the only way that fiscal helps you ***when you're in a recession*** is if you don't fight it with monetary offset (in other words you do monetary stimulus too)... so why do the fiscal?. That's the key I think. It might be a dead wrong concept, but it's not inconsistent with being moderate to moderately left of center. Why? Sumner himself has said that fiscal policy should be evaluated on its own merits. He's opposed to using it to do the job he thinks is better handled by monetary alone. And of course since he's more libertarian than not, he's not in favor of most gov spending either, but that is a separate issue. Well right there, that opens up space for a variety of approaches to fiscal, taxes, and gov spending, but all based on the merits of each program. Single payer health care? Let's look at the merits. Build a particular bridge or another? Again, evaluate it on it's own. Same for a tax cuts or building highways, etc. Some of those things might be very good for the economy overall, but don't confuse that stuff with what monetary is supposed to do. Don't tie the project/policy to the concept of the ZLB or a recession, etc. Let monetary take care of that. Chuck Norris and a rule based CB and NGDPLT will set it all right: it won't prevents busts and booms (Sumner doesn't believe in "bubbles" but he does believe in busts and booms), but it'll keep silly monetary problems from getting in the way. It's not that tax cuts or spending or particular programs are bad or good regarding what monetary policy does, it's that they shouldn't be evaluated in that regard.
Again, I don't know if I accept that: I'm a skeptic. But I'm a skeptic in all directions really. I don't have the tools to evaluate what's likely correct or not in most cases.
Perhaps you're correct that Sumner is being disingenuous, but I'm still not convinced. I flat out asked Sumner if it's possible to be a liberal MMist... and what is an example of the closest approximation to one in existence. He said something about Glasner not being a fan of Friedman.
Scott doesn't think of himself as a conservative. I've seen him describe himself just today or yesterday as a "right wing liberal." I've also seen him say he's a libertarian or a "classic liberal." Classic liberal doesn't translate to "right wing liberal" necessarily for me, so I find that a bit confusing.
DeleteRegarding the parties, he's certainly not a fan of either. I think he stole this from one of his commentators, but he's basically said that regarding monetary policy, the GOP is the party of bad ideas and the Dems are the party of no ideas. I think he wrote that today actually. Regarding everything else, he says that the Dems are the party of bad ideas and the GOP is the party of no ideas. Not flattering either way! But given that he's extremely concerned about monetary policy, perhaps that's an even harsher criticism of the GOP than it is of the Dems overall.
And believe it or not (I might be COMPLETELY out to lunch on this one) but something he wrote once gave me the impression that he may have even voted for Obama at least once. For Sadowski, it's clear he's voted for Obama both times, since he says he's voted solid D since 2000 (and libertarian before that). He just doesn't regard the GOP as a viable governing party at this point (or something to that effect). I think he wrote that it was W that convinced him that it was more important to be anti-GOP than to vote his principles (libertarian I guess). I had a short follow on thread with him in the article in which he revealed that he'd never voted GOP.
Regarding the hostility to you and your comments, I don't understand why. I won't try to defend that.
BTW, what do you think is the best approximation to a liberal MMist? Miles Kimball? Doesn't he write that blog "Confessions of a supply side liberal?"
Oh, and BTW, I did ask Glasner once about fiscal vs monetary. As I recall he was in favor of doing both, but of course he put more emphasis on the monetary, but he more had the attitude of not opposing fiscal policy when in a bad recession "Why not do both?" is what he said if I recall correctly. And then of course Beckworth has laid out a helicopter drop style fiscal policy to be used in extreme emergencies. I don't think Sumner was in favor of that though.
DeleteMaybe you've seen commentator Benjamin Cole on Sumner's or Cullen's blogs? He advocates something I'd describe as a mixed approach too... and for that matter so does Cullen and even Krugman.
Actually just today or yesterday one of Sumner's commenters (with a foreign sounding name... perhaps French?) said he was confused by Sumner's implication that he was a conservative because he (the commenter) was very much a liberal but found himself agreeing with most of what Sumner wrote (perhaps just in that one article). I think that's where another of Sumner's commenters jumped in and said "Scott says he's not a conservative: he's a right-wing liberal." Not long after Scott agreed.
BTW, I noticed that Nick Rowe is getting a few recent comments from somebody calling themselves the "Market Fiscalist" ... Ha!... I didn't bother reading the thread, but it did get Nick's attention: they both had multiple comments in the thread.
Don't get me wrong. I thikn Glasner is great. He is a monetarist however, just not a Freidman monetarist-he prefers Hawtrey and Cassell. INterestingly he always argues that Friedman was very bright but also was a liar and intellectual bully.
DeleteI would describe Sumner that way too.
Now I get this argument:
"ust for laughs, assume they're right. Assume that pretty much (w/ a few exceptions) the only way that fiscal helps you ***when you're in a recession*** is if you don't fight it with monetary offset (in other words you do monetary stimulus too)... so why do the fiscal?. That's the key I think. It might be a dead wrong concept, but it's not inconsistent with being moderate to moderately left of center. Why? Sumner himself has said that fiscal policy should be evaluated on its own merits. He's opposed to using it to do the job he thinks is better handled by monetary alone. And of course since he's more libertarian than not, he's not in favor of most gov spending either, but that is a separate issue. Well right there, that opens up space for a variety of approaches to fiscal, taxes, and gov spending, but all based on the merits of each program. Single payer health care? Let's look at the merits. Build a particular bridge or another? Again, evaluate it on it's own. Same for a tax cuts or building highways, etc. Some of those things might be very good for the economy overall, but don't confuse that stuff with what monetary is supposed to do. Don't tie the project/policy to the concept of the ZLB or a recession, etc. Let monetary take care of that. Chuck Norris and a rule based CB and NGDPLT will set it all right: it won't prevents busts and booms (Sumner doesn't believe in "bubbles" but he does believe in busts and booms), but it'll keep silly monetary problems from getting in the way. It's not that tax cuts or spending or particular programs are bad or good regarding what monetary policy does, it's that they shouldn't be evaluated in that regard."
In theory that might seem true-just do NGDPLT then we can talk over fiscal policy within its proper sphere. Yet I think that the real intelletual fathers of monetarism-Friedman and Friedman 2.0-Sumner-wager that in truth we;ll end up with a much smaller government sphere even if in theory you could be a 'big government monetarist.' I think our fiscal policy in such a regime would be much more handicapped and with a lot less choice than it may see.m Yet I think he wants people to blieve it's more openended than it is-this is what the logicians call 'overdetermination'
By the way my argument is not whether Sumner personally or MM generally is 'centrirst'-I wouldn't quibble with that designation but even if you could call him that this doesn't mean he isn't wrong.
In late on this one guys. Much to think about and comment on.
ReplyDeleteAs you both know I have a very uncharitable view of MMers in general and Sumner specifically. Rowe is mostly a nice guy but even he has a certain "reality" that he dogmatically subscribes to without evidence, which is not what anyone who calls them selves an academic searching for truth should do.
It seems to me the core of MM is that the 70s disproved Keynes. Ive heard people say that Friedman had the unfortunate opportunity to watch his ideas be put into practice......... and be rejected. He supposedly convinced CBs to try and control monetary aggregates as a way to control prices and quickly found out that CBs DONT directly control monetary aggregates....... banks and the public borrowing form them do. The CB experiments lasted a very short time before they simply went to inflation targeting and NAIRU. Now, you'd think this would discreidt monetarism but in fact all its done is make the monetarists say "They werent doing it right", which is funny cuz Friedman apparently had carte blanche on his ideas.
Anyway, the "70s disproved Keynes" is as much a central tenet of MMers as Christains go to heaven a central tenet of Christianity.
Now, much discussion can be done on the 70s inflation and its causes. Additionally much can be discussed about Keynes and his ideas. I personally dont think Keynes' ideas were really fully appreciated by even his admirers and what we really got was bastard Keynesianism, Additionally, comparing the affects of policies that started in 30s, 40s through the 70s involves dealing with leaving a gold standard, financing 3 wars (WWII, Korea, Vietnam) and huge demographic and social shifts (baby boomers and civil rights era) To have all those external forces and suffer no hyperinflations or massive monetary events is quite remarkable really.
Keynes' ideas (if you accept that the policy from 30s thru 70s was "What Keynes would do") lasted 40+ years. Friedmans lasted far less time. Not even close.
So one key to upending MM, in its present form, is to reject the idea that the 70s were an example of "Proving Keynes wrong". And this is where I think MMers spike the ball a little too soon (like the 50 yard line! on a 100 yd kick return!)
This doesnt mean that there arent some things that MMers get right (none to think of off hand), its not a cut and dried world, but.......... to me.... they lack the humility to lead (they WANT to be the boss too badly), they lack the interest and skills in proper investigation AND they are to willing to cede ALL authority in management of our money to ONE GUY............who isnt elected by the populace.
Thats the biggest mark against them in my view. They do not truly trust the market! They want monoply!
If you take what I've written about MM over the last 2 years, you'll see I've on balance not been as uncharitable as Greg. Nevertheless Greg is right on a lot of what he says.
ReplyDeleteI would say my approach is kind of 'dialetical'-so I kind of agree with both the charitable view-Tom-and the uncharitable view-Greg. I mean either may well be right. And it may be somewhere in the middle.
However, I've tried to honestly enegae them and they refuse to engage. Sumner clearly has harbored a grudge against me for the times I've called him on things. He treats me as if I'm not speaking in good faith which makes me suspect that he's projecting.
In general I take a very uncharitable view of supply side econ, which MMers certainly are. Thanks for thinking Ive been "right" on a lot but I would say its mostly cuz Im skeptical of what guys like Rowe and Sumner profess as truths. Claims that banks dont matter, that fiscal policy does nothing or that Japans prices are 100x ours are just examples of the type of reworking and redefining the world to suit their paradigm rather than the opposite, which most scientists do, altering your paradigm to fit the world.
DeleteBut in an age where a degree from Liberty University in biology (or in anything for that matter) isnt laughed out of the room, one shouldnt be surprised by anything. I hope we are witnessing the last gasp of these dogmatists, unable to accept the integrated and diverse world we live in.
Sumner is just a lap dog for the hegemon (to quote Warstler) using his academic degree and blog to justify all efforts to stop govts from being proactive and doing somehthing to improve welfare of people, and not just play guardian to the 1%ers booty.
He's a centrist ONLY on the scale where 1 means leave everyone alone and help support everyones welfare to the best you can and 10 means be overtly aggressive about telling the little people about where they stand in your view and what you intend to do with them if they try and buck the system. But even on that scale he's more like a 7-7.5 with Warstler being the 10. And BTW.... on that last scale..... 5 is not the "correct" place to be.
See I've tried to at least entertain Tom's view but Sumner's clear unwillingness to engage with those who question him is very telling.
DeleteI don't even think there's much difference between Morgan and him-Morgan is just more honest about it. Sumner wants a veneer of a 'centrist' or nonpartisan but even with the recent shutdown while he criticized the GOP his real\ worry is that he knew it wouldn't work.
I hope youre right that this is the last gasp. I think Sumner is the one who is trying to get them more life.
Gasps can last years and take a lot of good people down.
DeleteAnd I only said I HOPE we are witnessing a last gasp. I am generally optimistic about human nature but certainly realize that the dark side of our nature can break down in five seconds what our good side built in 5 years.
Correct they can. My estimate-I think you've said the same-is that it will probably take the next 10 to 20 years to shutdown Tea Party nation once and for all.
DeleteI appreciate your optimism about human nature, and of course, I agree.
So I think Sumner is worth reading but keep your eyes open. Don't be too uncritical or you become the next member of his MM brood. LOL
ReplyDeleteDavid Glasner is certainly someone who I think is a very high quality scholar. He seems to me to approach things in a much more good faith way than Sumner. He is also one of the few Neoclassical economists today who actually has some clue about the history of ideas in economics which is key to get anything more than a shallow understanding of the economic world.
On the other hand I remember that Sumner in his FAQ actualyl encourages people to read blogs more than books in terms of learing monetary policy which guarantees your understanding will be shallow