We'll see Sumner's reaction later-Krugman very rarely does this-mentions, much less criticizes Market Monetarism-and here, he doesn't even address it by name, but instead speaks of 'NeoMonetarists.' Still, have no doubt that-as Zizek would put it-this letter 'reached it's true destination.' It doesn't take much for Krugman to get a rise out of Sumner, which is perhaps why he does stuff like this so seldom.
For those of you who aren't familiar with Zizek-well you should be.
http://en.wikipedia.org/wiki/Slavoj_%C5%BDi%C5%BEek
http://www.egs.edu/faculty/slavoj-zizek/articles/the-interpassive-subject/
http://www.slate.com/blogs/browbeat/2014/06/02/slavoj_zizek_calls_students_stupid_and_boring_stop_worshiping_this_man_video.html
I wonder how many readers of Diary of a Republican Hater have also read Zizek? He must love that last piece where Slate harangues him for calling students stupid and boring-he takes pride in this piece, I assume. For one thing he is narcissistic enough to enjoy being recognized by the mainstream press. Also it shows him 'taking away the enjoyment' of these students he apparently has been insulting.
In any case here is Krugman.
"Danny Vinik notes that “reform conservatives”, who are trying either to rescue the right from its intellectual torpor or to provide cover for its fundamental anti-intellectualism — your choice — have gotten a fair bit of lip service for some of their ideas, but none at all for one key proposal: activist monetary policy to assure full employment."
"This was predictable."
"The neomonetarist movement starts from an acknowledgement of reality: shortfalls of aggregate demand do happen, and they do matter, and we need an answer. Like the original monetarists, however, they reject any government role in the form of discretionary fiscal policy. Instead, they argue that the Fed and its counterparts can do the job all on their own if they really want to."
http://krugman.blogs.nytimes.com/2014/07/01/neomonetarist-delusions/?_php=true&_type=blogs&module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body&_r=0
Notice what he doesn't mention: three things stand out right away. No mention of 'Market Monetarist' , 'Scott Sumner' or 'NGDP targeting.' He certainly knows all too well who Sumner is. He knew about him no later than March of 2009.
http://www.themoneyillusion.com/?p=349
http://krugman.blogs.nytimes.com/2009/03/02/a-quick-response-to-scott-sumner/
Krugman's omission of Sumner's name is probably because he knows that if he does that Sumner will be complaining about this for the next 6 months-he'll probably write about nothing else. However, not mentioning MM or NGDP targeting I find problematic. Sumner believes that better than a higher inflation target would be NGDP level targeting. Surely Krugman is familiar with this? Why doesn't he address it head on? I guess the answer that someone like Brad Delong would give is that he has better things to do. Yet, if Krugman really wants to give us a comprehensive critique of 'reform conservatism', this omission makes it in-comprehensive
What also bothers me about this critique is that Krugman moves from the theoretical to the political too quickly. He himself says that he thinks that this is more important-that allegedly this 'NeoMonetarist' gambit-but in reality Market Monetarist-is a quixotic crusade that conservatism will never accept than a theoretical discussion of the merits such as they are regarding Market Monetarism. For Krugman of all people to stop at this water's edge is disappointing.
Interestingly, Vinik too in his analysis, even while touching on Monetarism, doesn't mention specifically either Market Monetarism or NGDPLT..
"Reform conservatives have had a big month. They released a new book, “Room to Grow,” that laid out a new, conservative reform agenda. Last Wednesday, Senator Marco Rubio became the most prominent conservative to pick up the reformicon mantle. But there is a big omission in this new agenda: It doesn’t have a solution to the current jobs crisis. And it's not because they're bereft of ideas. It's because the ideas they have are politically complicated."
"In “Room to Grow,” Michael Strain offers a variety of smart policies to make it easier for the unemployed to work. One example is to eliminate many occupational licensing requirements. He also wants to give companies financial incentives in the form of tax credits for hiring the long-term unemployed and to reform the Social Security Disability Insurance program to remove disincentives to work (although that would not help fill the hole in demand). These ideas would undoubtedly help reduce unemployment, but it’s hard to see them helping millions of people find work."
"In the New York Times last Friday, Ross Douthat, a reform conservative, made a similar omission. He argued that conservative, pro-work welfare reforms over the past two-plus decades have helped the economy and reduced poverty. But Douthat offers no solution to the current jobs-crisis. His pro-work policies may boost long-term growth, but they are insufficient to return the economy to full employment. Without a separate solution to the short-term hole in demand, reform conservatives do not have a complete economic agenda."
"What’s surprising is that they actually do have an answer for this hole: monetary stimulus. In an article for National Affairs, Strain outlined many of the ideas in “Room to Grow,” but he also argued in favor of continued loose policy at the Federal Reserve. “Monetary policy surely offers the best way to boost aggregate demand in the short term,” Strain wrote. “By keeping the federal funds rate at zero and pursuing its long-term asset purchase program (known as quantitative easing or QE), the Federal Reserve has done much to support the economy during the Great Recession.” Strain then runs through a variety of different policies that the Fed could pursue, like allowing for higher inflation, that would boost growth in the short-term and fill the hole in aggregate demand. Douthat has also written in the past in favor of monetary stimulus. Many other reform conservatives have as well."
"Which is why it’s strange that the words “monetary policy” never appear in “Room to Grow.” In fact, the Federal Reserve is only mentioned once in the 120-page book. This is undoubtedly a hard issue for reform conservatives. Republicans have been, if not openly hostile, then vehemently opposed to the Federal Reserve’s actions during the Obama presidency. When Fed chair Janet Yellen’s nomination was before the Senate in November, Rubio revealed his inflation paranoia and opposition to monetary stimulus. “Altogether, she has championed policies that have diminished people’s purchasing power by weakening the dollar, made long-term savings less attractive by diminishing returns on this important behavior, and put the U.S. economy at increased risk of higher inflation and another future boom-bust,” he said. In fact, it’s hard to find any Republican in Congress who supports the Fed’s actions."
http://www.newrepublic.com/article/118509/reform-conservatives-ignore-monetary-policy-new-policy-agenda.
To digress, the conservative idea of taking away the disincentives of SSI disability is a good one-depending on how they intend to eliminate these disincentives-which are considerable, right now once a beneficiary makes more than $300 a month, they're benefits begin to be phased out. At $800 dollars in a month, they lose their benefits. Still-not having yet read the book-if the proposal is simply to cut SSDI benefits then that's a cure worse than the disease-I'm not saying that's what's proposed as I don't know yet. I know one good conservative idea was to allow UI beneficiaries go continue to collect UI for the first 8 weeks of a new job. While this had been a Republican proposal, once Obama embraced it, of course, their interest in this ended.
Again, no mention of Sumner, MM, or NGDPLT. What's more, Sumner will argue-knowing him as I do-that in fact he has lately been embraced by some notable conservatives which is clearly true: Jonah Goldberg of the National Review has embraced Sumner, as has Larry Kudlow-who thanks to Sumner, is a recovering inflation hawk-and now Sumner has a regular column at Econlog.
So he has started to be embraced by some very notable conservative intelligentsia. Krugman and Vinik take his omission from Room to Grow-not him, who they too omit mention of, but his 'NeoMonetarist' movement-he doesn't seem to realize that the only NeoMonetarist out there is Stephen Williamson-as proof that he can't get a foothold in conservatism.
Sumner wouldn't see his omission from this book as that important perhaps-he'd point to the names I mentioned and others who have embraced him. It must be understood though that primarily, he has never seen his goal as converting Rand Paul or even Paul Ryan. Remember his dictum: 'There is no such thing as public opinion in economics.'
His goal is not to convince the median voter, much less the median Republican politician, but rather then median conservative economist-not only conservative economists either.
Say what you want about Sumner-I have of course-but he has game. He has a big picture perspective-if he wins over Republican economists, the politicians will follow. He's never seen his goal as simply to convince the Republican party anyway. Morgan Warstler has often complained that Sumner doesn't court Republicans the way Friedman did. However, Sumner doesn't see victory as simply being about the GOP's success. The difference between he and Friedman here may be that of living in a different time. The GOP during Friedman's time was a much more reliable vehicle than it is today. Sumner realizes how dysfunctional the party is and figures that he can't count on them alone.
My own guess is that the GOP is going into a long period in the wilderness. They learned nothing in 2012-it had seemed that maybe they had learned about immigration at least, but seeing them kill immigration reform makes it clear that they didn't. The demographic trends alone are enough to doom the party-as they've now shown they're incapable of immigration reform. Clearly it should be obvious that there's no hope of it unless we have Democratic supermajorities. By the way, the immigration trend is not the only one that works against the GOP-more broadly, in today's politics, society, and culture are at a very different point than during the GOP heyday from Nixon to Bush II. The culture war stuff is held in such low disrepute that the entire Tea Party is supposed to be about just the economic message-austerity-without wading into the divisive wars over God, gays and guns, race, etc.
Sumner on some level knows that something like this may play out so he's not putting all his eggs in that basket.
My bigger criticism though is that Krugman doesn't even gander a theoretical debate which is really needed.
For those of you who aren't familiar with Zizek-well you should be.
http://en.wikipedia.org/wiki/Slavoj_%C5%BDi%C5%BEek
http://www.egs.edu/faculty/slavoj-zizek/articles/the-interpassive-subject/
http://www.slate.com/blogs/browbeat/2014/06/02/slavoj_zizek_calls_students_stupid_and_boring_stop_worshiping_this_man_video.html
I wonder how many readers of Diary of a Republican Hater have also read Zizek? He must love that last piece where Slate harangues him for calling students stupid and boring-he takes pride in this piece, I assume. For one thing he is narcissistic enough to enjoy being recognized by the mainstream press. Also it shows him 'taking away the enjoyment' of these students he apparently has been insulting.
In any case here is Krugman.
"Danny Vinik notes that “reform conservatives”, who are trying either to rescue the right from its intellectual torpor or to provide cover for its fundamental anti-intellectualism — your choice — have gotten a fair bit of lip service for some of their ideas, but none at all for one key proposal: activist monetary policy to assure full employment."
"This was predictable."
"The neomonetarist movement starts from an acknowledgement of reality: shortfalls of aggregate demand do happen, and they do matter, and we need an answer. Like the original monetarists, however, they reject any government role in the form of discretionary fiscal policy. Instead, they argue that the Fed and its counterparts can do the job all on their own if they really want to."
http://krugman.blogs.nytimes.com/2014/07/01/neomonetarist-delusions/?_php=true&_type=blogs&module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body&_r=0
Notice what he doesn't mention: three things stand out right away. No mention of 'Market Monetarist' , 'Scott Sumner' or 'NGDP targeting.' He certainly knows all too well who Sumner is. He knew about him no later than March of 2009.
http://www.themoneyillusion.com/?p=349
http://krugman.blogs.nytimes.com/2009/03/02/a-quick-response-to-scott-sumner/
Krugman's omission of Sumner's name is probably because he knows that if he does that Sumner will be complaining about this for the next 6 months-he'll probably write about nothing else. However, not mentioning MM or NGDP targeting I find problematic. Sumner believes that better than a higher inflation target would be NGDP level targeting. Surely Krugman is familiar with this? Why doesn't he address it head on? I guess the answer that someone like Brad Delong would give is that he has better things to do. Yet, if Krugman really wants to give us a comprehensive critique of 'reform conservatism', this omission makes it in-comprehensive
What also bothers me about this critique is that Krugman moves from the theoretical to the political too quickly. He himself says that he thinks that this is more important-that allegedly this 'NeoMonetarist' gambit-but in reality Market Monetarist-is a quixotic crusade that conservatism will never accept than a theoretical discussion of the merits such as they are regarding Market Monetarism. For Krugman of all people to stop at this water's edge is disappointing.
Interestingly, Vinik too in his analysis, even while touching on Monetarism, doesn't mention specifically either Market Monetarism or NGDPLT..
"Reform conservatives have had a big month. They released a new book, “Room to Grow,” that laid out a new, conservative reform agenda. Last Wednesday, Senator Marco Rubio became the most prominent conservative to pick up the reformicon mantle. But there is a big omission in this new agenda: It doesn’t have a solution to the current jobs crisis. And it's not because they're bereft of ideas. It's because the ideas they have are politically complicated."
"In “Room to Grow,” Michael Strain offers a variety of smart policies to make it easier for the unemployed to work. One example is to eliminate many occupational licensing requirements. He also wants to give companies financial incentives in the form of tax credits for hiring the long-term unemployed and to reform the Social Security Disability Insurance program to remove disincentives to work (although that would not help fill the hole in demand). These ideas would undoubtedly help reduce unemployment, but it’s hard to see them helping millions of people find work."
"In the New York Times last Friday, Ross Douthat, a reform conservative, made a similar omission. He argued that conservative, pro-work welfare reforms over the past two-plus decades have helped the economy and reduced poverty. But Douthat offers no solution to the current jobs-crisis. His pro-work policies may boost long-term growth, but they are insufficient to return the economy to full employment. Without a separate solution to the short-term hole in demand, reform conservatives do not have a complete economic agenda."
"What’s surprising is that they actually do have an answer for this hole: monetary stimulus. In an article for National Affairs, Strain outlined many of the ideas in “Room to Grow,” but he also argued in favor of continued loose policy at the Federal Reserve. “Monetary policy surely offers the best way to boost aggregate demand in the short term,” Strain wrote. “By keeping the federal funds rate at zero and pursuing its long-term asset purchase program (known as quantitative easing or QE), the Federal Reserve has done much to support the economy during the Great Recession.” Strain then runs through a variety of different policies that the Fed could pursue, like allowing for higher inflation, that would boost growth in the short-term and fill the hole in aggregate demand. Douthat has also written in the past in favor of monetary stimulus. Many other reform conservatives have as well."
"Which is why it’s strange that the words “monetary policy” never appear in “Room to Grow.” In fact, the Federal Reserve is only mentioned once in the 120-page book. This is undoubtedly a hard issue for reform conservatives. Republicans have been, if not openly hostile, then vehemently opposed to the Federal Reserve’s actions during the Obama presidency. When Fed chair Janet Yellen’s nomination was before the Senate in November, Rubio revealed his inflation paranoia and opposition to monetary stimulus. “Altogether, she has championed policies that have diminished people’s purchasing power by weakening the dollar, made long-term savings less attractive by diminishing returns on this important behavior, and put the U.S. economy at increased risk of higher inflation and another future boom-bust,” he said. In fact, it’s hard to find any Republican in Congress who supports the Fed’s actions."
http://www.newrepublic.com/article/118509/reform-conservatives-ignore-monetary-policy-new-policy-agenda.
To digress, the conservative idea of taking away the disincentives of SSI disability is a good one-depending on how they intend to eliminate these disincentives-which are considerable, right now once a beneficiary makes more than $300 a month, they're benefits begin to be phased out. At $800 dollars in a month, they lose their benefits. Still-not having yet read the book-if the proposal is simply to cut SSDI benefits then that's a cure worse than the disease-I'm not saying that's what's proposed as I don't know yet. I know one good conservative idea was to allow UI beneficiaries go continue to collect UI for the first 8 weeks of a new job. While this had been a Republican proposal, once Obama embraced it, of course, their interest in this ended.
Again, no mention of Sumner, MM, or NGDPLT. What's more, Sumner will argue-knowing him as I do-that in fact he has lately been embraced by some notable conservatives which is clearly true: Jonah Goldberg of the National Review has embraced Sumner, as has Larry Kudlow-who thanks to Sumner, is a recovering inflation hawk-and now Sumner has a regular column at Econlog.
So he has started to be embraced by some very notable conservative intelligentsia. Krugman and Vinik take his omission from Room to Grow-not him, who they too omit mention of, but his 'NeoMonetarist' movement-he doesn't seem to realize that the only NeoMonetarist out there is Stephen Williamson-as proof that he can't get a foothold in conservatism.
Sumner wouldn't see his omission from this book as that important perhaps-he'd point to the names I mentioned and others who have embraced him. It must be understood though that primarily, he has never seen his goal as converting Rand Paul or even Paul Ryan. Remember his dictum: 'There is no such thing as public opinion in economics.'
His goal is not to convince the median voter, much less the median Republican politician, but rather then median conservative economist-not only conservative economists either.
Say what you want about Sumner-I have of course-but he has game. He has a big picture perspective-if he wins over Republican economists, the politicians will follow. He's never seen his goal as simply to convince the Republican party anyway. Morgan Warstler has often complained that Sumner doesn't court Republicans the way Friedman did. However, Sumner doesn't see victory as simply being about the GOP's success. The difference between he and Friedman here may be that of living in a different time. The GOP during Friedman's time was a much more reliable vehicle than it is today. Sumner realizes how dysfunctional the party is and figures that he can't count on them alone.
My own guess is that the GOP is going into a long period in the wilderness. They learned nothing in 2012-it had seemed that maybe they had learned about immigration at least, but seeing them kill immigration reform makes it clear that they didn't. The demographic trends alone are enough to doom the party-as they've now shown they're incapable of immigration reform. Clearly it should be obvious that there's no hope of it unless we have Democratic supermajorities. By the way, the immigration trend is not the only one that works against the GOP-more broadly, in today's politics, society, and culture are at a very different point than during the GOP heyday from Nixon to Bush II. The culture war stuff is held in such low disrepute that the entire Tea Party is supposed to be about just the economic message-austerity-without wading into the divisive wars over God, gays and guns, race, etc.
Sumner on some level knows that something like this may play out so he's not putting all his eggs in that basket.
My bigger criticism though is that Krugman doesn't even gander a theoretical debate which is really needed.
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