Thank Monetarism for the Slow, Plodding Recovery

      I agree with Delong. If you want to know why the recovery has been so slow and taken so long-yes we have a 5.5% unemployment rate now, but does anyone really believe even now our economy  is truly healthy?-you have to look at Monetarism

      In the history of recoveries this one has been shockingly slow-at most 3% GDP. Yet Scott Sumner bizarrely claims this recovery vindicates Monetarism-defined broadly here so as to also encompass his 'Market Monetarism' where the central tenet is that fiscal policy is not needed for demand stabilization during a recovery. 

      "Ideas matter. That is the lesson of Hall of Mirrors, the American economist Barry Eichengreen’s chronicle of the two biggest economic crises of the past 100 years: the twentieth century’s Great Depression and the ongoing Great Recession, from which we are still struggling ineffectually to recover."

     "Eichengreen is my friend, teacher, and patron, and his book is to my mind the best explanation to date of why policymakers in Europe and the United States have reacted to the most dramatic economic collapse in almost four generations with half-hearted measures and half-finished interventions."

     "According to Eichengreen, the Great Depression and the Great Recession are related. The inadequate response to our current troubles can be traced to the triumph of the monetarist disciples of Milton Friedman over their Keynesian and Minskyite peers in describing the history of the Great Depression."

     Read more at http://www.project-syndicate.org/commentary/friedman-ideas-great-recession-by-j--bradford-delong-2015-03#sQZe2B03sc3ya206.99

    The very fact that someone like Delong is embracing Minsky is notable. It will be a long time till we see just how the Lesser Depression and the following lesser recovery impact the Macro mainstream but one thing that is clear is it will never be the same again. 

    No one has done more to try to push the Monetarist line post 2008 than Sumner. I've spoken to Delong about this and he did write a post regarding Sumner which I appreciated. He thinks it would be a waste of time for Krugman to talk about Sumner. 

     I still don't know why Krugman couldn't say write one post per month refuting 1 of Sumner's many errors. Of course, this would drive him absolutely bonkers. If Krugman were to write one critical post about Scott on the 1st of each month by the 30th Sumner might finally be ready to move on from it.

     Just in time for Krugman to criticize him on the 1st of the next month. Sumner would then spend the next 30 days carping about that. This is something that isn't appreciated about him. He absolutely has to get the last word on everything. If stubbornness is a cardinal virtue then he will have 'a seat on the right hand of God' in Heaven. 

    Again, Krugman wouldn't have to even worry about him the rest of the month-just 1 day per month-Scott Sumner day-would be enough to make Sumner crazy the rest of the month. 

    It'd be a real public service. 

    Because no one is doing more to try to entrench the Monetarist illusion than him. Is this lost on Krugman? Again, I get it that in Krugman's mind that would be punching down. Still, just kicking the hornet's next once per month...

   Sumner wonders why no bigger name economists are embracing an NGDP futures market. 

  "Why hasn't it happened yet?  Good question.  All I can say is that I’m doing my part; now I’d like to see some bigger name economists make a push for these markets."

    http://diaryofarepublicanhater.blogspot.com/2015/05/conservatives-peddling-bill-of-goods-on.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29

    http://www.themoneyillusion.com/?p=29417

    As I see it there are 2 likely reasons it hasn't happened 'yet.'

    1. These bigger name economists just aren't as brilliant as Scott and don't realize how great an idea an NGDP futures market is. 

   2. These bigger name economists realize how hopeless the idea is which is why they have bigger names-if they went out for such erroneous ideas they would deserve to have a small name like Scott does. 

    P.S. See, I have no problem going after Sumner but the trouble is he can just dismiss me as not an economist. He claims that he doesn't read me but I suspect otherwise-which is why he's always so peevish in his comments section. 

   Whether I'm right or not about that it's clear that many of his readers also read me. 

    This is why I'd like to see guys like Krugman, Delong, etc. occasionally going after him-partly just for the comic relief of how crazy he'd get and because it would be a real public service. 

    P.S.S. Sumner really does need to be called out-I say it's a public service partly because of his ability to confuse the layman. He's like the Rush Limbaugh of economics. As Al Franken once put it, the Rush Limbaugh show is where you get punished for knowing things; basically the less you know the further you go on Rush's show. 

   A classic example of this is his claim he won a bet from Krugman over austerity in 2013. In the midst of some very noisy data he cherrypicked 2 quarters-the 4th of 2012 and the 4th of 2013-and claimed this proved austerity had no ill effects. 

   I believe Delong is the one who pointed this out-and Simon Wren-Lewis. Yet, Scott continues to gloat about winning a bet. He's a laughing stock among the economics profession.