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12-16-2011, 02:23 PM   #1
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NYT/Krugman op-ed: G.O.P. Monetary Madness

QuoteQuote:
...
And there has, indeed, been a huge expansion of the monetary base. After Lehman Brothers fell, the Fed began lending large sums to banks as well as buying a wide range of other assets, in a (successful) attempt to stabilize financial markets, in the process adding large amounts to bank reserves. In the fall of 2010, the Fed began another round of purchases, in a less successful attempt to boost economic growth. The combined effect of these actions was that the monetary base more than tripled in size.

Austrians, and for that matter many right-leaning economists, were sure about what would happen as a result: There would be devastating inflation. One popular Austrian commentator who has advised Mr. Paul, Peter Schiff, even warned (on Glenn Beck’s TV show) of the possibility of Zimbabwe-style hyperinflation in the near future.

So here we are, three years later. How’s it going? Inflation has fluctuated, but, at the end of the day, consumer prices have risen just 4.5 percent, meaning an average annual inflation rate of only 1.5 percent. Who could have predicted that printing so much money would cause so little inflation? Well, I could. And did. And so did others who understood the Keynesian economics ...
http://www.nytimes.com/2011/12/16/opinion/gop-monetary-madness.html

12-19-2011, 04:38 PM   #2
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The line between Krugman and MMT is getting harder to define, despite his protests to the contrary. Not that I disagree with him.
12-19-2011, 04:42 PM   #3
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QuoteOriginally posted by GeneV Quote
The line between Krugman and MMT is getting harder to define, despite his protests to the contrary. Not that I disagree with him.
Magical Mystery Tour?



(or Chartalism?)
12-19-2011, 04:56 PM   #4
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QuoteOriginally posted by jsherman999 Quote
Magical Mystery Tour?



(or Chartalism?)
goo goo g'joob

12-19-2011, 08:32 PM   #5
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Interesting history and a quote..............

A Dark Age of macroeconomics (wonkish) - NYTimes.com
QuoteQuote:
The answer, I think, is that we’re living in a Dark Age of macroeconomics. Remember, what defined the Dark Ages wasn’t the fact that they were primitive — the Bronze Age was primitive, too. What made the Dark Ages dark was the fact that so much knowledge had been lost, that so much known to the Greeks and Romans had been forgotten by the barbarian kingdoms that followed.

And that’s what seems to have happened to macroeconomics in much of the economics profession. The knowledge that S=I doesn’t imply the Treasury view — the general understanding that macroeconomics is more than supply and demand plus the quantity equation — somehow got lost in much of the profession. I’m tempted to go on and say something about being overrun by barbarians in the grip of an obscurantist faith, but I guess I won’t. Oh wait, I guess I just did.
QuoteQuote:
One of my favorite non-fiction authors, John Ralston Saul, often remarks that the end of the Enlightenment, our time, reflects the end of the feudal age it replaced.
Knowledge in the feudal age was not meant to improve understanding of the world. It was meant to support the status quo. Its purpose was to make sure that things didn’t change, that those with power remained in power.
Whether such knowledge was in tune with the way the world worked or that knowledge improved the lot of society was not a consideration.
A pity we’ve returned to that time.
— Rob Graham
http://faculty.chicagobooth.edu/john.cochrane/research/papers/Cochrane_Infla...al_Affairs.pdf

got to love when they throw zimbabwe and Greece in.. neither of which applies to the US..........

Last edited by jeffkrol; 12-19-2011 at 08:47 PM.
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