Ramanan beat me to it. I actually started writing something like this yesterday buy didn't have time. Beats me why anyone is listening to, or economists engaging with an undergrad in economics, even though he is studying at Princeton and is obviously a bright kid with a future. I thought he had promise when he started out, but he has seen the promised land from the top of the mountain, his perch at The Washington Post, and it is a chair at Harvard. Sell out.
The Case For Concerted Action by
Evan Soltas Is The Future Greg Mankiw
Ramanan
9 comments:
"Ramanan beat me to it."
:) I am flattered.
The economics blogosphere has run completely off the rails in the last several weeks, doubling down on its general stance of irrelevancy and hidebound socioeconomic conservatism. If the Yellowstone super-volcano erupted and blew up half the country, the econ bloggers in the dominant brat pack would spend two weeks after the eruption discussing whether the Fed should tighten or loosen. They have become caricatures of themselves.
Soltas was the head of the Republican Club at Phillips Exeter and winner of some Yale economics competition before moving on to Princeton. He's clearly the right sort of people as far as the incestuous Economics profession and its cream-of-the-crop army of safe, ruling class twits is concerned.
"If the Yellowstone super-volcano erupted and blew up half the country, the econ bloggers in the dominant brat pack would spend two weeks after the eruption discussing whether the Fed should tighten or loosen. They have become caricatures of themselves."
:-)
Is it a campaign against full employment or a campaign to end the current Fed QE/ZIRP policy?
I think the latter, but to get there, they have to raise the NAIRU the way their monetarist brains work (btw including Krugman he just sees the surface symptoms here) ...
So they have to somehow change the current macro view that the Fed should continue to be "stimulative" and hence #1 stop the QE which is bleeding govt bond balances out of the "money manager" industry and then #2 get the rates back up as the rates are too low for these managers to take out any fees...
iow people arent going to pay PIMCO and Blackrock (Princeton NJ btw....) to manage govt bond funds earning 0% interest... as the Fed and external sector are buying more bonds than are net being issued so these firms are bleeding balances under management hence we see the pressure boiling over at PIMCO, etc...
We are still running like a 4-500B CAD and those people just put the balances in their US Treasury securities account at the Fed, and then the Fed is buying like 500B per year and the deficit is less than these amounts so SOMEBODY is losing 100s of $B UST balances and it is the PIMCOs and Blackrocks of the world... so this has to stop in their view... and as they are all monetarists, the first thing they have to do in their warped deranged irrational mental contortions is change the current view of NAIRU and then get the Fed to stop the QE and ZIRP...
Ironically, this to me seems like the only way to increase fiscal flows (as we are in full blown austerity otherwise... current govt idiot magistrates think "we're out of money!") ie thru the interest income channel so in a way I hope these idiots are actually able to pull it off and our retired senior savers can get their interest income back at least which they have been doing without for like the last 5 years... stock market will boom, some jobs will be created, etc... it may be the best short term thing we can hope for right now...
rsp,
I think you've identified the hidden agenda, Matt. Where there's power and influence, there is almost always an agenda serving as propaganda and a hidden agenda favoring the interests of the powerful and influential. This is not considered preferable to exhibiting raw power, which is now considered outré.
Yes, I think Matt is right. The rentiers want their interest payments back, so they have to pretend we have a tight labor market and are facing inflation pressures in order to sell it.
I have yet to hear any original thought out of this kid. What has he ever done except regurgitate monetarist BS with his cheeky, overly wonky blogging? Overrated. Anyone who thinks the labor market is remotely "tight" needs a serious reality check. Or to get laid. In Evan's case, it may be both.
"The rentiers want their interest payments back, so they have to pretend we have a tight labor market and are facing inflation pressures in order to sell it"
Yep, and of course this exposes the total BS of bond vigilantes controlling interest rates via market mechanisms. Vigilantes might control fed policy to a degree but its the fed which controls interest rates, when they are committed to do so.
To believe otherwise would mean to believe that the last six years the vigilantes didn't want higher rates on their govt "investments"
Ha! Good point Greg you've actually checkmated them there but their pea brains are such scrambled eggs they can't see your irrefutable logic... rsp,
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