[T]he truth is that we really don’t know how low unemployment can go, which means that the unemployment rate is not a good reason to tighten. Wait until you see the whites of inflation’s eyes!
But what I am really curious about is, when does Wenzel think the FED should tighten?
Is it really that hard to conceive of the simple fact that Austrians don't want a central bank? Once you're able to assimilate that and understand why, you'll realize your question is meaningless to Austrians.
Cough, cough. Newbie alert.
Sometimes I wonder if Krugman even believes Krugman's BS, or if he is just there to approve of everything the FED does no matter what.
IF the world had currencies that were:* liberated from government central planning* based on hard money rather than fiat* held on behalf of depositors and lent to borrowers by banks that were not corporatist crony government institutions with the power to create more currency units (through fractional reserves)THEN this question would NEVER enter into anyone's mind, other than that of a megalomaniac cloud-cuckoo-land academic. The cost of money should be priced as other commoditites are priced in a free market: as a result of continuous price discovery from millions, billions, and trillions of independent transactions between and among free and voluntary participants, free from fraud or aggression.Central planning by all-knowing, all-powerful poohbahs makes sense only those those suffering from mental disease.
One would think that unemployment rates can't go negative ... but the Krugtron can show you how it's done! He's so smart!