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Friday, December 28, 2018

Paul Krugman : Hard-Money Men, Suddenly Going Soft : "I have been insufficiently cynical about modern conservative econ... [feedly]

Paul Krugman : Hard-Money Men, Suddenly Going Soft : "I have been insufficiently cynical about modern conservative econ...
https://www.bradford-delong.com/2018/12/paul-krugman-hard-money-men-suddenly-going-soft.html

Paul KrugmanHard-Money Men, Suddenly Going Soft: "I have been insufficiently cynical about modern conservative economics.... While I yield to nobody in my appreciation of the right's fiscal fraudulence, I took its monetary hawkishness seriously. I thought that all those dire warnings about the inflationary consequences of the Federal Reserve's efforts to fight high unemployment, the constant harping on the evils of printing money, were grounded in genuine—stupid, but genuine—concern. Silly me. It's no surprise that Individual-1, who lambasted the Fed for keeping interest rates low while Barack Obama was president, is demanding that it keep rates low now that he's in the White House. After all, nobody has ever accused Donald Trump of having consistent, principled views about monetary policy (or anything else). But it is a shock to see so many conservative voices—including, incredibly, the editorial page of The Wall Street Journal—echoing Trump's demands...

...It's hard to overstate just how consistent and intense The Journal and others of like mind used to be in their attacks on easy money.... Now, you might say that the explanation for the right's about-face on monetary policy is the same as the explanation of its about-face on deficits. That is, Republicans want pain and suffering when there's a Democratic president, but a nonstop party when one of their own sits in the White House.... I used to think there was something more to the story.... The right's emotional response to Fed policy—its hatred for using the printing press to boost the economy, no matter what the circumstances—always seemed real to me. I never believed that Paul Ryan really cared about the deficit, but I did believe his assertion that his views on monetary policy were derived from the denunciation of paper money as a form of looting in Ayn Rand's "Atlas Shrugged."...

Then Trump decided to pressure the Fed, and many of the erstwhile hard-money men became easy-money men overnight. I mean that more or less literally. Consider the case of Kevin Warsh, a former member of the Federal Reserve Board who was for a time considered a likely Fed chairman. Up until two months ago he was always for higher interest rates—but this week he suddenly wrote an op-ed article calling on the Fed to stop rate hikes.... These days the G.O.P. is all about power; there are no principles it will adhere to if they involve any political cost. And it's a party that belongs to Trump: What he says is the party line, on any and every issue. Trumpism, it turns out, trumps everything else—even Ayn Rand.... 

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