Kenneth Rogoff: “Those who believe — often with quasi-religious conviction — that we need even more Keynesian fiscal stimulus, and should ignore government debt, seem to me to be panicking.”
Since we’re giving opinions — let’s call them “seems to me-isms” — rather [than] analysis, let me give mine: “Those who believe — often with quasi-religious neoclassical conviction — that no further Keynesian fiscal stimulus is needed, and that government debt cannot be ignored, seem to me to be insensitive to the needs of the millions of unemployed, and at odds with the available evidence.”
As for the snide remark about “panicking,” for those who are truly panicking due to the struggles they face finding a job, paying the bills, and so on, some urgency from policymakers would be much appreciated.
— Mark Thoma (University of Oregon)
First, an apology: I’m not very good at this whole blogging thing. I’m the kind of writer who likes to go into a cocoon for several days and reappear with a finished work. I get absorbed in my work, and it’s hard to force myself to post something everyday. Some writers find it easier to pour out their thoughts in-the-moment and collect it all into a coherent work later. So I’m back, but no promises about how long it’ll last.
Second, an observation: In the time I’ve been avoiding this blog and the news, nothing has changed. Legislators and economists are still arguing over fiscal stimulus, the financial regulation bill looks pretty much the same as it did a month ago (or two months ago, for that matter), investors are still worried about European debt, and Afghanistan is still a complete mess. I used to think the world would pass me by if I stopped paying attention for a few weeks, but I’ve come to realize that real change is rare—and the bulk of what we spend our time worrying about is the same things over and over. Continue reading “It’s the Same Old Song…and It Sucks.”
The Federal Reserve just can’t catch a break.
Back in 2001, the Fed caught hell for allowing the dot-com bubble to escalate so steeply. For the following two years, it found itself between inflation hawks who worried about historic low interest rates and deflation hawks who thought high unemployment was a harbinger of Japan-style depression.
After giving the Fed a breather for a few years, observers jumped on them in 2007 for ignoring warnings about predatory lending, in March 2008 for fostering moral hazard with the Bear Stearns deal, in September 2008 for crashing the economy by letting Lehman Brothers fail, and in the rest of 2008 for lowering interest rates too slowly before and during the crisis. In 2009, they were sandwiched between economists who wanted more aggressive, “unconventional” monetary policy and those who cautioned against loading up the Fed’s balance sheet with dangerous assets. Continue reading “Between a Rock and a Hard Place, But It Didn’t Have to Be This Way”