As inflation accelerates and money growth (M2) exceeds 9%, Cowen
hints that he might like to see an expanded role for government fiscal policy:
Fiscal policy with excess capacity deserves a post of its own. For now I’ll note there is a difference between hiring people to work directly for the government, contracting with firms to use some of their excess capacity, and contracting with the highest quality firms which perhaps do not have much excess capacity at all.
But he hasn't given up on money printing:
I still favor looser monetary policy, but I view myself as lacking in real influence on the world and thus I am ”working through the available variations” rather than propagadizing (sic) for my favorite policy.
President Obama has nominated Alan Kreuger to head the White House Council of Economic Advisers. Kreuger is in favor of a VAT tax and thinks a high minimum wage doesn't cause unemployment. Here's
Cowen's take on the
serious interventionist Kreuger:
Hat tip goes to Greg Mankiw, and we should all agree with Greg that this [the Kreuger nomination] is good news.
This is what living in DC does to people. Over time it can take a thoughtful Libertarian and turn him into another braindead hack carrying the water for the state.
ReplyDeleteHow does Cowen divine whether a company has "excess capacity" or not? Does he know the thoughts and ambitions of all the private participants in the market and thus is able to determine that they'd all be better off patronizing that business with "excess capacity" than they would be if they kept those resources unemployed by irrationally "hoarding" their wealth?
ReplyDeleteEvery man is a dictator in his own mind. The sheer nerve of Tyler Cowen in this regard is impressive...
Consider that monetary policy is limited by fiscal policy. Unless there are treasuries to buy, the FED can't buy treasuries. Think about it. That's why you have all these people parroting the fed that its "options are limited" The FED wants some stimulus now so it has more to buy in QE3.
ReplyDeleteDude, it's Tyler Cowen. Expecting consistent logic is foolish here. Of course, he'll applaud Kreuger.
ReplyDelete@Nouriel is ecstatic his old Haaaarvard chum is getting the POTUS' ear. Good company all around.
ReplyDelete"How does Cowen divine whether a company has 'excess capacity' or not?"
ReplyDeleteHe simply uses the Potter Stewart method of economic calculation:
http://bit.ly/nEBh6W
Question: Where is all the new money going? Both the stock and commodity markets seem to be rather tame lately. If it's now flowing there, then where?
ReplyDeleteLooks like someone is fishing for a policy position. What a shill
ReplyDelete