The Koch brothers funded Mercatus Center at George Mason University has just announced that the Center has named Scott Sumner as the Ralph G. Hawtrey Chair in Monetary Policy.
Sumner is a professor of economics at Bentley University and runs the blog The Money Illusion.
In a blog post today he wrote:
In a sense I’ll never retire, as I’ll keep promoting NGDP...I hope to achieve many goals, but the one that might be of greatest interest to MoneyIllusion readers is a book on NGDP targeting and market monetarism.By all accounts, on a personal level, Sumner is a decent guy, but his NGDP targeting advocacy is simply another bizarre view that money printing somehow can result in the creation of real wealth.
It appears that the Koch brothers are now pushing a multi-front advocacy of NGDP targeting. George Selgin, the Director of the Cato Institute's Center for Monetary and Financial Alternatives, has also said positive things about NGDP targeting.
Joseph T. Salerno slapped down Selgin's advocacy of such targeting:
In fact Selgin expresses a profound solidarity with Keynesian macroeconomists like Bernanke when he states in his interview that a shrinkage in the demand for goods is undesirable and must be avoided, whether by quantitative easing or by mandating that the Fed target a constant level of nominal GDP in the long run. Like Bernanke et al. it seems that Selgin has not learned the first principle of business cycles, which was originally discovered by the classical economists and elaborated into a full theory by Mises, Hayek, and later Austrian economists.
The classical economist David Ricardo gave this principle concise and elegant expression:
Men err in their productions, there is no deficiency of demand.It is truly difficult to understand why Koch-funded operations are moving in this oddball direction. But it is the most bold move yet by the Koch brothers away from the advocacy of sound money policy. Are they so desperate to fit in with the establishment that they now are willing to advocate money printing that deep down they must understand does nothing but distort the economy.
What is NGDP targeting anyways? Will spending money digging ditches and fill them in increase GDP? If so, then what is the point of targeting nominal GDP anyways? Just more central planning to give more power to the special interest groups.
ReplyDeleteAny advocacy of "stimulus" whether monetary or "fiscal" is based upon the lie that the undistorted market fails and/or fizzles out due to a lack of externally induced momentum. These folks rely exclusively upon the evidentiary fact that artificially stimulated booms always end badly which they then blame on the market and a lack of the proper form and intensity of "stimulus". They can never point to that original market failure and will always ignore the main Austrian points of how their "stimulus" does nothing but shift wealth and distort price signals. Economies do not have or lack "momentum". These are dishonorable people.
ReplyDeleteFor years, blog commenter “Major Freedom” has calmly and thoroughly explained to Sumner his errors from an Austrian perspective on Sumner’s blog. Sumner seems to respond to all or most comments but always ignores Major Freedom, except for this one time:
ReplyDeleteLucas, MF works hard each day to prove that he’s the most tasteless, classless, moronic and petty human being every to walk on the face of the Earth. It’s just my luck that he chose to make a fool of himself on my blog.
blog.http://www.themoneyillusion.com/?p=17692&cpage=1#comment-205619
How’s that for a scholarly response to the Austrian School?
The above link is incorrect. This is the correct link to Sumner's response to Major Freedom:
ReplyDeletehttp://www.themoneyillusion.com/?p=17692&cpage=1#comment-205619