He has now attributed me for his recent post:
"The title of this post was inspired from a post by Mike Sax."
http://neweconomicperspectives.org/2013/11/scott-sumner-find-mmts-achilles-heel.html#comment-516800
That's all I wanted, doesn't take much to make me happy. Still I disagree with Peter P:
"Sumner doesn't even understand that doubling the base drops rates to zero and nothing else happens. As I said, debating him is a waste of time. But you got your attribution so it must have been worth it."
http://diaryofarepublicanhater.blogspot.com/2013/11/wray-vs-sumner-on-interest-rates.html?showComment=1383700274926#c1009088908648164220
There Peter does answer Sumner's missive that he never said cut rates to 0% to double NGDP but double the monetary base. However, the assumption that both Wray and Peter have is that doubling the base automatically drops rates to zero. Still I disagree that debating Sumner is a waste of time. Don't get me wrong asking his questions on his blog may seem futile for many, however, it's important that his zombie ideas are engaged properly as he has a very large forum and a large audience.
I think you ignore him at your peril. As Greg puts it, someone should right a post compiled of 'Stupid things Scott Sumner says' or STSSS. Think of Diary of a Republican Hater as that place.
It seems to me that both the MMTers and the MMers just wants to say the other side is clueless and just hang out in their little ideological ghettos. What I want, however, is to really get at truth and knowledge of the economic world. Seems to me that even the Great Wonk himself, Mark Sadowsk got a little frustrated in this one:
"With respect to the Randy Wray post, it appears that Mike Sax blogged on a post that Scott did on MMT over two years ago. Sax’s post was blogged about at Mike Norman’s, and in turn Wray blogged on the post at Mike Norman’s (i.e. up the food chain of Ancient Fiscal Tautology it went)."
"The title of this post was inspired from a post by Mike Sax."
http://neweconomicperspectives.org/2013/11/scott-sumner-find-mmts-achilles-heel.html#comment-516800
That's all I wanted, doesn't take much to make me happy. Still I disagree with Peter P:
"Sumner doesn't even understand that doubling the base drops rates to zero and nothing else happens. As I said, debating him is a waste of time. But you got your attribution so it must have been worth it."
http://diaryofarepublicanhater.blogspot.com/2013/11/wray-vs-sumner-on-interest-rates.html?showComment=1383700274926#c1009088908648164220
There Peter does answer Sumner's missive that he never said cut rates to 0% to double NGDP but double the monetary base. However, the assumption that both Wray and Peter have is that doubling the base automatically drops rates to zero. Still I disagree that debating Sumner is a waste of time. Don't get me wrong asking his questions on his blog may seem futile for many, however, it's important that his zombie ideas are engaged properly as he has a very large forum and a large audience.
I think you ignore him at your peril. As Greg puts it, someone should right a post compiled of 'Stupid things Scott Sumner says' or STSSS. Think of Diary of a Republican Hater as that place.
It seems to me that both the MMTers and the MMers just wants to say the other side is clueless and just hang out in their little ideological ghettos. What I want, however, is to really get at truth and knowledge of the economic world. Seems to me that even the Great Wonk himself, Mark Sadowsk got a little frustrated in this one:
"With respect to the Randy Wray post, it appears that Mike Sax blogged on a post that Scott did on MMT over two years ago. Sax’s post was blogged about at Mike Norman’s, and in turn Wray blogged on the post at Mike Norman’s (i.e. up the food chain of Ancient Fiscal Tautology it went)."
"Other than the absurdity of Wray responding to something Scott wrote over two years ago, the most absurd thing is the importance that Wray attaches to Scott’s remarks on interest rates. MM obviously doesn’t think interest rates are an important measure of monetary policy."
As I pointed out to Sadowski, this is a pretty feeble argument-Sumner wrote this post 2 years ago so it's 'all absurd.' Here was my response to Sadowski over at Money Illusion:
"I don’t know what’s absurd about simply commenting on a 2 year old post-people are trotting out Krugman posts from years ago all the time-4 years, 6 years, 10 years, 15, if they think they’ve somehow caught him in an error. If you don’t believe me just check out Bob Murphy-most days he’ll have at least one old Krugman quote. We can’t discuss something Scott wrote 2 years ago?"
"In what way does he now disagree with what he wrote then? IF he doesn’t then where’s the problem?
I just wanted to write a Sumner-MMT post-it’s not my fault if he hasn’t written anything about them since."
The last part of Sadowski's comment was probably even more feeble:
"So Wray’s argument that interest rates can have perverse effects on aggregate demand via the interest income channel (which is itself an incredibly implausible argument, unless you’re a bond coupon-clipping rentier like Warren Mosler who wonders how all the little poor people get by on their interest income when bond yields are so low) disproves Scott’s argument seems like an amazingly case of bidirectional obliqueness."
If a liberal or a Keynesian were to employ such a'class warfare' argument we'd never hear the end of it from Sumner about how the commentator in question shouldn't be discussing it as they aren't economists. Notice that he switches gears to Mosler even though the post was by Wray so it's actually doubly irrelevant.
I think that Jose Guillermo sums up Sumner's point:
"Sumner's law in plain English: "When banks double their deposits at the central bank in a moment when the economy is not at the zero lower bound, then nominal GDP will eventually double".
I would say that Sumner wouldn't think it'd be eventual but instant and that because of IRR and an economy in a bad recession. It's not a very impressive law. Why would the Fed double the MB in the middle of a heathy economy? What is the actual value in this 'thought experiment.'
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