Folks, something is happening here, first I get a call from a D.C insider who only wants to talk about Ron Paul, and now this from Krugman:
The Economic Consequences of Mr. Paul
Kash Mansori pursues the same line of thought I followed after Bernanke’s press conference, and fleshes it out.
Basically, if you listen to Bernanke’s analytical comments, they make a powerful case for more expansion. Underlying inflation is low; unemployment is disastrously high, and the corrosive effects of long-term unemployment are hurting the future as well as the present. More quantitative easing — QE3 and beyond — might not work, but it’s very much worth trying.
And yet Bernanke balks at doing anything, suddenly seeming to abandon his own analytical framework. What’s going on?
Mansori and I agree: he’s afraid of the inflationistas, and is accommodating them even though he believes they’re completely wrong.
Maybe that’s what he has to do. But it’s truly tragic.How Krugman can not see the inflation swirling around him or the fact that employment is starting to tick up (especially in the tech sector) is amazing, but he does know Ron Paul is coming. One out of three for Krugman isn't bad.
BTW, money supply is growing at roughly 4.5% and hundreds of billions more of new money is flowing into excess reserves. If this is accomodating the "inflationistas", then the Ritz Carlton is now accomodating guests at the Cockroach Hotel.