For Those Who Seek Understanding on Things Monetary, Read Tom Brown

     Tom Brown wears a few hats. He's a regular reader and commentator at Cullen Roche's Monetary Realism. He also has his own blog. Most importantly he's a reader and commentator here at Diary of a Republican Hater. Kidding. No, his blog is a great resource. However he got the ultimate praise by Cullen Roche:

    "A big part of Monetary Realism is about explaining things through what I refer to as stylized facts.  And one way to hone in on stylized facts is by focusing on accounting.  We do a lot of that with MR.  Whether it’s the sectoral balances, S=I+(S-I), explaining banking concepts or trying to explain QE."

     "JKH rightly says ”If you can’t explain it with accounting, you can’t explain it.”  And that brings me to a very important blog that a MR reader started earlier this year.  Tom Brown has provided the world with an invaluable resource for understanding money and banking.  He has gone through the accounting in excruciating detail to help better educate people about how banking actually works.  I don’t know of a much better resource on banking."

      "So, if you haven’t checked it out then go here and check it out.  It’s in the dropdown under education here permanently.  And remember, if someone tries to explain banking to you without the right accounting then tell them they’re not explaining it correctly.  And then point them to Tom Brown’s site so they get it right."

     http://pragcap.com/if-you-cant-explain-it-with-accounting-you-cant-explain-it

     Incidentally if you can't explain it without accounting this would seem to rule out a number of people pretty high up in the mainstream econ world. I'm not mentioning any names. Scott Sumner.No, not me. No names at all. Maybe even Krugman. Nope. No names used. 

     Tom really is a great resource and I often check out when I want to understand this banking and accounting stuff better. He also had a few comments about the recent debate between Mark Sadowski and Steve Waldman on the Great Inflation-was it as Monetarists since Friedman have insisted, that is a monetary phenomenon, or was chief cause real-one common real cause suggested through the years was the supply shocks to oil prices both in 1973-1974 and 1978-1979 and the food shortage in 1972-73. Waldman argues that the sudden population boom-thanks to the Boomers-along with a major acceleration of women into the work place?

    "I'm not a regular reader of Waldman's but I have to say I've been impressed with how he takes "constructive criticism." ... and with Mark too... he's an impressive firebrand for the MM cause, but he's not a uncritical zealot ... he clearly has his reasons and can produce an impressive analysis in a short amount of time. I wouldn't want to get on the wrong side of Mark actually! I'm not sure I could take the onslaught as gracefully as Steve does. Though I'm sure I flatter myself thinking he'd even spend 30 seconds debunking something I wrote on my blog!"

     "I explicitly contrast Steve's treatment of this issue with how I'd do it in my "blog." (I realize now, that the "blog" format was perhaps not the best for me):"

    http://brown-blog-5.blogspot.com/p/about.html

     "So go ahead Mark! I'm ready! I'll just change it when you're not looking. Ha!"

     "Actually I've never really had much interaction with Mark at all... I did try to get him to take up Row's recent challenge to poke holes in NGDPLT as "guard dog"... 

     http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/09/is-ngdplt-a-perfect-guard-dog-a-challenge.html

     "but he wasn't "sufficiently motivated" to give it a shot. And I did ... ever so gently ... suggest he might be mistaken once here:"

      http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/08/how-can-you-get-an-economy-into-a-liquidity-trap.html?cid=6a00d83451688169e2019aff456ef1970b#comment-6a00d83451688169e2019aff456ef1970b

     "Do I sound mealy mouthed and intimidated there? You bet... this was while Steve was crossing out whole posts due to Mark's sharp eye and unwillingness to let him get away with it! So I was impressed by your bold interchanges with him Mike. That's enough for this comment, but I've more to say re: Mark ... to be continued."

     http://diaryofarepublicanhater.blogspot.com/2013/09/more-on-population-growth-as-cause-of.html?showComment=1378966197264#c8908106056188580047

    I agree that Sadowski-whether you agree with him or not-is very impressive in what he does with analysis. Though just because he prodcues lots of charts and figures doesn't-necessarily make him right. I actually had another back and forth with him in the comments at Steve Waldman's. 

    I basically was arguing with this whole idea of Monetarism starting with Friedman of a 'Natural Rate of Unemployment' and NAIRU-'non-inflationary rate of unemployment.' I argue that teh change from low unemployment at any price as policymakers practiced prior to Volcker, and the low inflation-or 'non-accelerating level of unemployment' since is not necessarily an improvement. I see though that he has just left me a lengthy answer-I just finished my morning job and am trying to do a little blogging in the break till my evening job. 

    I'm going to have to go through it-he is very smart and knowledgeable there's no question. 

     "Hi Mark. Thanks for all the feedback. Whether you’re right or not I always appreciate your powers of analysis an to justify claims you make in a rigorous way. While I have nothing against Sumner-and actually do admire him in a number of ways, though he’s clearly not a big fan of mine-he’s not always so great about answering questions he’s not so impressed with in a thorough way-I guess you might call his tendency in such situations is to be rather ‘terse’ not to say ‘abrupt’ or ‘snarky.’ Certainly you do some great work for the Market Monetarist cause then."

    (This next sentence is where I quote Mark)

   “I can’t speak for what the public knows, or doesn’t know, but in my opinion the level of unemployment is always a policy choice even if you choose to do nothing about it.”

    Ok, back to me:

    "This just shows what’s a different approach between you and I. My reasoning in making this claim is intuitive-logically people are not going to be happy with rising unemployment-or underemployment a topic which I think that is given far too short a thrift-and if they actually hear that trhe government in some sense is ‘deliberately’ raising the unemployment rate just to keep the inflation low that could lead to real social frustration."

    "So I didn’t really take it as something that needed to be proved. If you can pore over a bunch of stats that show there is no correlation I would still be rather slow to buy it-just because it’s simple logic."

    http://www.interfluidity.com/v2/4706.html#comment-35548