Posted on 04/20/2009 8:52:51 AM PDT by TigerLikesRooster
Time For Mankiw To Resign
On Saturday I checked my watch to verify the date. A quick check showed it was April 18. Just to be sure I asked my wife Joanne and she assured me it was the 18th. Likewise my computer said it was the 18th.
For a brief moment, I thought we had flashed back in time and it was April 1.
April Fool's day was the only rational explanation I could come up with for a column in the New York Times by Gregory Mankiw, professor of economics at Harvard.
(Excerpt) Read more at globaleconomicanalysis.blogspot.com ...
Up until this article Mankiw always seem sane and somewhat moderate. On his blog he is now making the perfectly true, though trivial, point that negative real interest rates achieved through inflation would be preferable to deficit spending by the administration.
He’s presenting what I think is a false dichotomy: Stimulus or Inflation. Of course with the Obama stimulus we’ve have the worst of both worlds. He seems to saying that using inflation to prod the private sector to spend and invest makes more sense than having the Democrats blow it all on special interests. Maybe just. But he seems to discount the fact that free markets, nor even the Federal Reserve can maintain negative interest indefinitely (or we’d all be getting paid to borrow money). Eventually, and in my opinion sooner rather than later, real interest rates rise faster, a lot faster, than inflation.
http://gregmankiw.blogspot.com/
I rather think not! The drug kingpins have billions in hard cash and that is what is funding the ongoing shooting war in Mexico. Some favor!
I was under the impression that the "new design" for our currency was to thwart the state sponsored counterfeiting going on in North Korea and Iran. Those two countries were conducting "economic warfare" on the US economy by pumping out billions of dollars in "almost perfect" counterfeit one hundred dollar bills of the "old design". They were causing inflation in the US while generating their own "foreign exchange". The intent to issue new currency does nothing to stop them if we do not pull the old bills from circulation.
Regards,
GtG
PS Swamp the Treasury? Horse feathers, they can print up a couple trillion on demand from the Obamanation, or so we're told.
He is sort of panicking, in short. I think there are many other economists panicking, too. It shows. This looming catastrophe could irreparably damage their credibility.
Regards,
GtG
I agree, people counterfeiting our currency do not do us a favor. However, when someone stores or hoards genuine U.S. currency they are doing us a favor by making an interest free (or as Mankiw would say, negative interest rate) loan.
People do this because they see the greenback as a stable reservoir of wealth, with excellent liquidity.
If we haven’t got the self discipline to validate those assumptions, shame on us.
Visit his website. I rather like him.
Lots of economist warned of the current debacle. Policy makers kicked the can down the road hoping the dam would burst after their term was over, to mix metaphors.
It is apparent that they stayed away fearing that any serious challenge would set back the expansion of global economy and free trade. The typical argument has been that we have some problems, it could go bad, however, it will turn out alright in the end.
I’m not an economist, but I knew that America couldn’t live on Asian credit forever. I was hoping for a soft landing for the economy. The longer you try to postpone the inevitable, generally, the worse the consequences.
Obama seems to introducing the worst possible witch’s brew of fiscal, monetary and environmental policy all at once, essentially a perfect storm (to mix another metaphor). If we get out of his adminstration without a severe depression, it will be a miracle. And he seems to be completely clueless.
If we’re lucky, we’ll recover in a generation or two (I’ll be dead by then anyway.) If not we’ll do like the Soviet Union and spiral down for seventy years. The Russians are still at least a generation way from getting over the hang over from the Soviet economic miracle.
Yes, nobody is more qualified to turn a disaster into a catastrophe than a Harvard madman(remember Unabomber?)
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