Let me first admit, I may just be wishing here. Yet Krugman wrote a piece that likely rankled Sumner. Of course, he doesn't mention Sumner by name-just people who Sumner doesn't like seeing Krugman-in particular-attack:
"Oh, and by “error” I don’t mean “views I disagree with”; I mean raw conceptual or empirical banana-peel episodes, the kind of thing that defenders of these men (who have a lot of defenders) try to justify not by claiming that they were right, but by claiming that they didn’t say what they did, in fact, say."
"Now, few have matched Ferguson’s awesome arc of inanity. But still, consider the list:
"Oh, and by “error” I don’t mean “views I disagree with”; I mean raw conceptual or empirical banana-peel episodes, the kind of thing that defenders of these men (who have a lot of defenders) try to justify not by claiming that they were right, but by claiming that they didn’t say what they did, in fact, say."
"Now, few have matched Ferguson’s awesome arc of inanity. But still, consider the list:
1.Robert Barro pointing to the decline in private spending during World War II as evidence that multipliers are small, somehow forgetting rationing and all that.
2.John Cochrane and Eugene Fama confusing accounting identities with causal relationships, and reinventing the Say’s Law fallacy.
3.Robert Lucas misunderstanding Ricardian equivalence.
4.Robert Samuelson and Olli Rehn asserting that Keynes wouldn’t have been a Keynesian given current debt levels, without checking actual British debt in the 1930s (which was much higher than debt now).
5.John Taylor equating Fed policy to hold down interest rates with a price ceiling on, say, apartment rents.
2.John Cochrane and Eugene Fama confusing accounting identities with causal relationships, and reinventing the Say’s Law fallacy.
3.Robert Lucas misunderstanding Ricardian equivalence.
4.Robert Samuelson and Olli Rehn asserting that Keynes wouldn’t have been a Keynesian given current debt levels, without checking actual British debt in the 1930s (which was much higher than debt now).
5.John Taylor equating Fed policy to hold down interest rates with a price ceiling on, say, apartment rents.
Of course, Krugman doesn't mention Sumner-that's one of the unwritten rules of the proxy war. Of course, Sumner mentions Krugman a lot, but Krugman only responds in kind very rarely though he did for once recently.
In truth I don't know that Krugman meant this piece as a kind of proxy piece. I know that Sumner is constantly targeting Krugman. I do know he won't like the piece. Most on the list Sumner has argued about before. The thing is that I do believe that it's of great consequence and that if Krugman doesn't think much about Sumner, he should think a little bit more. I suspect he doesn't want to give Sumner too much credit which makes sense, but only up to a point.
If you want to know who as much as anyone provides the intellectual basis for opposing fiscally stimulus it's Sumner much more than any wild-eyed Austrian who has been promising hyperinflation for 4 years thanks to a huge expansion of the monetary base.
It's Sumner's quasi Monetarist line. Unlike a simpleminded Austrian and Austerian-I love how similar the words are-he admits that austerity is a drain on the economy but only it it's not offset by monetary policy. If the Fed eases appropriately-ideally an NGDP level target-then according to Sumner the GOP can have as many sequesters as its heart desires.
Krugman needs to take this view head on. Historically, it was the Monetarist line that was able to upend Keynesianism in the 70s. The fact is Sumner is basically winning here, though you'd never know that listening to him:
"In the 1930s FDR knew how to debase a currency. Modern policymakers seem to have forgotten how, and thus embarked on a long and fruitless detour into the morass of fiscal stimulus.".
http://www.themoneyillusion.com/?p=21109#comments
What fruitless detour? We had one round of fiscal stimulus in 2o09 and that's been it. We've tried much more in the way of monetary remedies and yet to hear him tell it all anyone is doing is taking about the multiplier all day: who is doing that? Certainly not Congress
Speaking of proxy wars, while Sumner regularly baits Krugman-for Krugman to respond in kind would lead to major fireworks-Sumner usually tries to keep his tone when going after Sumner somewhat civil. Not so with his fellow MMer, Marcus Nunes. He can insult Krugman in a way Sumner avoids:
"Like a spoiled brat, Krugman stomps his feet and cries that it´s fiscal stimulus or nothing. Surely, he pays lip service to monetary policy but since we are stuck in his beloved liquidity trap-ISLM world, there´s almost nothing the Fed can do!"
http://thefaintofheart.wordpress.com/2013/05/07/krugmans-bias/
I like Marcus always appreciate his analysis, but this is a bit over the top. He never has said there's nothing the Fed can do. It's the MMers who say the fiscal authorities can do nothing,
Krugman needs to take this view head on. Historically, it was the Monetarist line that was able to upend Keynesianism in the 70s. The fact is Sumner is basically winning here, though you'd never know that listening to him:
"In the 1930s FDR knew how to debase a currency. Modern policymakers seem to have forgotten how, and thus embarked on a long and fruitless detour into the morass of fiscal stimulus.".
http://www.themoneyillusion.com/?p=21109#comments
What fruitless detour? We had one round of fiscal stimulus in 2o09 and that's been it. We've tried much more in the way of monetary remedies and yet to hear him tell it all anyone is doing is taking about the multiplier all day: who is doing that? Certainly not Congress
Speaking of proxy wars, while Sumner regularly baits Krugman-for Krugman to respond in kind would lead to major fireworks-Sumner usually tries to keep his tone when going after Sumner somewhat civil. Not so with his fellow MMer, Marcus Nunes. He can insult Krugman in a way Sumner avoids:
"Like a spoiled brat, Krugman stomps his feet and cries that it´s fiscal stimulus or nothing. Surely, he pays lip service to monetary policy but since we are stuck in his beloved liquidity trap-ISLM world, there´s almost nothing the Fed can do!"
http://thefaintofheart.wordpress.com/2013/05/07/krugmans-bias/
I like Marcus always appreciate his analysis, but this is a bit over the top. He never has said there's nothing the Fed can do. It's the MMers who say the fiscal authorities can do nothing,
Well, I'd recheck the first sentence if I were you. Krugman may not accommodate you, but Steve Roth at Angry Bear might. See his post today. You'll love the title. http://angrybearblog.com/2013/05/scott-sumner-goes-marxist-proposes-targeting-labors-share-of-income.html
ReplyDeleteCool-thanks for that link.
Delete