Tuesday, August 13, 2013

thoma re cap samuelson v krugman

pk gives us a big post
call it politically induced
pro cyclical macro paralysis
"We can argue endlessly about whether unconventional monetary policy could do the trick if only the Fed
did it on a truly huge scale"

". the fact is that the Fed hasn’t ever been willing,
or felt that it had sufficient political room,
to do that experiment"
"the political economy of policy turns out to make an effective fiscal response to depression very difficult."

politics trumps the samuelsonian synthesis
"we need “macroprudential” policies "

"regulations and taxes "
"designed to limit the risk of crisis"
"even during good years"

"we now know that we can’t count on
an effective cleanup when crisis strikes."
pk means mostly hog tie the FIRE SECTOR
" I don’t just mean banking regulation...
the logic of this argument calls for policies
discourage leverage in general,
capital controls to limit foreign borrowing,
and more."
if we go this route
in essence
put a permanent governor
on our credit system
our engine of corporate expansion
and that in turn will lead
to not just more but
much much more
or so I suspect
irony here ?
politics scotching macro
propose some even less politically plausible remedies
remedies corporate amerika defeated in ...well 1896

What’s more, you have to ask why, if markets are imperfect enough to generate the massive waste we’ve seen since 2008, we should believe that they get everything else right. I’ve always considered myself a free-market Keynesian — basically, a believer in Samuelson’s synthesis. But I’m far less sure of that position than I used to be.

sorry about the last paragraph
it needs quotes and a comment
here's the comments
somewhere since spring 09
pk crossed another bridge
on the long zig zag road
toward gosplan 2.0
my comment back a few posts
seems to flower nicely here...

even as pk attacks milty his real target may be Samuelson
And the neoclassical synthesis

Of course not the bold young macro side of Paul Samuelson in the early post war years
Prior to cost push