Scott Sumner Reluctantly Agrees With Krugman on Inflation
This is a long but “neat” post by Scott Sumner. I still think he is basically wrong, but it’s always refreshing to see someone who admits when his “enemies” are right (in his mind). He also points out an odd inconsistency in Krugman’s writings:
In my view Krugman is mixing science and advocacy in a very misleading and inappropriate way. When he evaluates central banks, he seems to take a deterministic, scientific, and clinical attitude, as if studying a colony of ants….Central banks are assumed to be impervious to public pressure. On the other hand his stance toward fiscal policy is much more normative. Now he is an advocate, he’s part of the game, passionately calling for more stimulus. But I don’t see how this makes any sense. If we are going to take a deterministic view of things, it seems likely that Congress is also far too conservative to implement the sort of spending that Krugman advocates. Indeed, hasn’t that already been shown? Couldn’t one just as reasonably say: “Since Congress clearly won’t do what it takes, we must fall back on the Fed as our only hope for the sort of stimulus that the economy needs.”
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Krugman is 100 times more influential than I am. With his NYT column, and his ideological allies in the White House, he is arguably the most influential economic pundit in the world. And he is also known (for better or worse) for his moral outrage over perceived injustices. In many cases I think he goes a bit over the top. But here it is just the opposite. I am outraged over Krugman’s lack of outrage over current monetary policy.
