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Thursday, December 27, 2018

DeLong: Saddest of all were Ron McKinnon and Jagdish Bhagwati... [feedly]

Moderator: Couple of things about this post from Brad DeLong: 1) It is an indirect, but pretty potent, example of how interest, especially class intrest,  trumps reason, even among highly educated economists....2) DeLong -- not a Marxist -- has a long running extramarital affair with the Old Mole, whom he returns to not infrequently to try and re-refute things Marx predicted that DeLong fears may be true, but has a "duty" to deny.

Saddest of all were Ron McKinnon and Jagdish Bhagwati...
https://www.bradford-delong.com/2018/12/saddest-of-all-were-ron-mckinnon-and-jagdish-bhagwati.html

Ah, yes. There is a distinct asymmetry between economists who are Democrats and economists who are Republicans: Saddest of all were Ron McKinnon and Jagdish Bhagwati...Paul Krugman: "Thinking about Trump's attempt to bully the Fed, I found myself remembering the open letter by a who's who of conservative economists (plus some 'economists') accusing Ben Bernanke of 'currency debasement'. Four years later, Bloomberg went to ask signatories why they were wrong; none of them—not one—would admit having been wrong..."

Douglas Holtz-Eakin, on November 24, 2010, trying to claim that the letter was not the partisan political attack that it was:

The letter... does not say... anything...that might be genuinely politicizing the Fed.... [T]he issue became "political" the moment that the QE II defenders asserted that it was a political attack. It is disappointing that when presented with a serious critique by academics, think tank analysts, and market participants the immediate response is "it must be a conservative attack on the Fed." Note that implicitly this also carries the message: "I'd never consider that conservatives have ideas or that I might learn something from them." So sad...

Immediately pre-undermined by Kevin Hassett the day before:

I've signed many open letters to policy makers over the years. The response to this one was stunning. I was surprised, and remain so, that the letter was criticized so widely and so passionately.... I'll be the first to admit that the letter may have forfeited some impact because of the obvious Republican bent of the signers, some of whom, shall we say, don't exactly spend their typical workday immersed in equations...

Back in late 2014: 22 hacks hacking:

Jim Grant: I think there's plenty of inflation—not at the checkout counter, necessarily, but on Wall Street... at the expense of other things, including the people who saved all their lives and are now earning nothing on their savings...

John Taylor: inflation, [un]employment... destroy[ed] financial markets, complicate[d]... normaliz[ation]... all have happened...

Douglas Holtz-Eakin: The clever thing... is never give a number and a date. They are going to generate an uptick in core inflation.... I don't know when, but they will...

Niall Ferguson: This bull market has been accompanied by significant financial market distortions, just as we foresaw. Note that word 'risk.' And note the absence of a date. There is in fact still a risk of currency debasement and inflation...

David Malpass: The letter was correct...

Amity Shlaes: Inflation could come... the nation is not prepared...

Peter Wallison: All of us... have never seen anything like what's happened here. This recovery... by far the slowest... in the last 50 years...

Geoffrey Wood: Everything has panned out.... If the Fed doesn't ease money growth into it, inflation could arrive...

Richard Bove: Someone's got to prove to me that inflation did not increase in the areas where the Fed put the money...

Cliff Asness... declined to comment. ..

Michael Boskin... didn't immediately respond...

Charles Calomiris... was traveling and unavailable...

Jim Chanos... didn't return a phone call or an e-mail.

John Cogan... didn't respond...

Nicole Gelinas... didn't respond...

Phone calls... and an e-mail... to Kevin A. Hassett... weren't returned...

Roger Hertog... declined to comment...

Gregory Hess... didn't immediately return...

Diana DeSocio... said Klarman stands by the position...

William Kristol... didn't immediately return a call...

Dan Senor... didn't respond...

Stephen Spruiell... declined to comment...

Worst of all, I think, was Douglas Holtz-Eakin: "The clever thing... is never give a number and a date. They are going to generate an uptick in core inflation.... I don't know when, but they will..."

Saddest of all were Ron McKinnon and Jagdish Bhagwati. I could never got Ron to tell me just what he was thinking. And Jagdish knew much better than to sign a letter saying Trump-Ryan-McConnell would pay for himself. Yet he did......

#shouldread #economicsgonewrong #highlighted

 -- via my feedly newsfeed

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