He hits a familiar theme in the opening sentence from a recent post: “There are days where everything seems hopeless. I still find that 98% of the pundits I read don’t even understand that low rates don’t mean easy money.”
But wait, there is at least one other man who gets it. Sumner explains that an FT article gets the analysis right. Sumner provides a block quotation to show this “ray of hope” in understanding. It contains the following two sentences:
Despite German misgivings, low interest rates are no evidence that money is too loose: nominal GDP growth stutters along at less than 3 per cent, a clear sign that the stance is much too tight. In recent years the ECB twice made the mistake of raising rates too soon, and thereby punished Europe with a deeper recession and a worse fiscal crisis.
I have often complained when Sumner would wag his finger at people for equating the ECB’s low interest rates with easy money in one post, then in another post say matter-of-factly that the ECB raising interest rates meant tighter money. But I think this is the first time when I’ve seen someone (whom Sumner endorses on this very point) making those two points in back-to-back sentences.