I continue my one-man campaign against the disastrous impact of the quasi-monetarists (aka market monetarists) on the punditry. It took Scott Sumner three years to become the new normal; it will just take a collapse of the currency for my own take. An excerpt:
Even though their conclusion strikes me as absurd, these quasi monetarists are serious thinkers and it would be a big task to comprehensively critique their position. (I’ve made modest efforts here and here when they defended QE2.) Yet despite their sophisticated calls for the Fed to “target NGDP growth,” shape expectations, and so forth, in practice their message is being distilled by the secondhanders into calls for unadulterated handouts of paper money. As we will see, I don’t have to engage in caricature; pundits like Matt Yglesias and Martin Wolf are openly calling for helicopter drops of money as a solution to our economic woes.
P.S. A quick point about the title (which is one of the rare ones that was my suggestion and the editor kept): I understand that the normal phrase is, “A wolf in sheep’s clothing.” Do you honestly think I don’t know that? The point of the title is that Martin Wolf (and Matt Yglesias) aren’t recommending something that sounds appealing on the surface, but would actually have bad consequences when you peek under the disguise. No, they are openly calling for helicopter drops of money…in order to give us (price) inflation. My point is, they aren’t even cloaking the rhetoric anymore. Sumner et al. have managed to convince people that what we need is a good dose of price increases to help the middle class.
P.P.S. Holy cow, please don’t lecture me that what Scott Sumner et al. want is to target the level of NGDP, and have it grow at (say) 5% per year. Yeah, I know. I read Scott’s blog. In this article, I’m talking about Yglesias calling for “free money for the rest of us” (sic!) when his call is clearly based on his reading of Sumner.