The Ron Paul types and inflation

[Paulie]

As cute as those charts are, they don't explain the decline in purchasing power and standard of living in this country within the middle class. Every year you have to work harder than the last, for less out of your dollar, and less dollars to spend.

Charts are great and all, and can certainly help someone try and make a broad point, but I operate in the real world and my own lying eyes tell me a much different story.

 

[DSGE]

As cute as those charts are, they don't explain the decline in purchasing power and standard of living in this country within the middle class. Every year you have to work harder than the last, for less out of your dollar, and less dollars to spend.

Charts are great and all, and can certainly help someone try and make a broad point, but I operate in the real world and my own lying eyes tell me a much different story.

Ah, the old "My personal anecdotes which suffer from small samples and confirmation bias trump your data" excuse. Right there you've just lost all credibility. Aside from that, they do actually show a decline in purchasing power. The level of wages drops much further than the level of prices due to a recession. Since then their growth rates have been even. A recovery, if monetary policy ever loosens, should see the level return to normal.

 

[EdwardBaiamonte]

The like between monetary policy and bubbles is ridiculous, especially since monetary policy wasn't especially loose over the last 20 years.

of course thats idiotic as usual.
Wall Street Journal Taylor Rule
Stamford University Professor John Taylor unequivocally claimed that had the Federal Reserve from 2003 -2005 kept short term interest rates at the level implied by his "Taylor Rule" " it would have prevented this housing boom and bust." This notion has been cited and repeated so often that it has taken on the aura of conventional wisdom.
By JOHN B. TAYLOR
Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should not rule out government itself as a major culprit. My research shows that government actions and interventions -- not any inherent failure or instability of the private economy -- caused, prolonged and dramatically worsened the crisis.

David Gothard
The classic explanation of financial crises is that they are caused by excesses -- frequently monetary excesses -- which lead to a boom and an inevitable bust. This crisis was no different: A housing boom followed by a bust led to defaults, the implosion of mortgages and mortgage-related securities at financial institutions, and resulting financial turmoil.

Monetary excesses were the main cause of the boom. The Fed held its target interest rate, especially in 2003-2005, well below known monetary guidelines that say what good policy should be based on historical experience. Keeping interest rates on the track that worked well in the past two decades, rather than keeping rates so low, would have prevented the boom and the bust. Researchers at the Organization for Economic Cooperation and Development have provided corroborating evidence from other countries: The greater the degree of monetary excess in a country, the larger was the housing boom.

The effects of the boom and bust were amplified by several complicating factors including the use of subprime and adjustable-rate mortgages, which led to excessive risk taking. There is also evidence the excessive risk taking was encouraged by the excessively low interest rates. Delinquency rates and foreclosure rates are inversely related to housing price inflation. These rates declined rapidly during the years housing prices rose rapidly, likely throwing mortgage underwriting programs off track and misleading many people.


Adjustable-rate, subprime and other mortgages were packed into mortgage-backed securities of great complexity. Rating agencies underestimated the risk of these securities, either because of a lack of competition, poor accountability, or most likely the inherent difficulty in assessing risk due to the complexity.
Other government actions were at play: The government-sponsored enterprises Fannie Mae and Freddie Mac were encouraged to expand and buy mortgage-backed securities, including those formed with the risky subprime mortgages.

Government action also helped prolong the crisis. Consider that the financial crisis became acute on Aug. 9 and 10, 2007, when money-market interest rates rose dramatically. Interest rate spreads, such as the difference between three-month and overnight interbank loans, jumped to unprecedented levels.

Diagnosing the reason for this sudden increase was essential for determining what type of policy response was appropriate. If liquidity was the problem, then providing more liquidity by making borrowing easier at the Federal Reserve discount window, or opening new windows or facilities, would be appropriate. But if counterparty risk was behind the sudden rise in money-market interest rates, then a direct focus on the quality and transparency of the bank's balance sheets would be appropriate.

Early on, policy makers misdiagnosed the crisis as one of liquidity, and prescribed the wrong treatment.

To provide more liquidity, the Fed created the Term Auction Facility (TAF) in December 2007. Its main aim was to reduce interest rate spreads in the money markets and increase the flow of credit. But the TAF did not seem to make much difference. If the reason for the spread was counterparty risk as distinct from liquidity, this is not surprising.

Another early policy response was the Economic Stimulus Act of 2008, passed in February. The major part of this package was to send cash totaling over $100 billion to individuals and families so they would have more to spend and thus jump-start consumption and the economy. But people spent little if anything of the temporary rebate (as predicted by Milton Friedman's permanent income theory, which holds that temporary as distinct from permanent increases in income do not lead to significant increases in consumption). Consumption was not jump-started.

A third policy response was the very sharp reduction in the target federal-funds rate to 2% in April 2008 from 5.25% in August 2007. This was sharper than monetary guidelines such as my own Taylor Rule would prescribe. The most noticeable effect of this rate cut was a sharp depreciation of the dollar and a large increase in oil prices. After the start of the crisis, oil prices doubled to over $140 in July 2008, before plummeting back down as expectations of world economic growth declined. But by then the damage of the high oil prices had been done.

After a year of such mistaken prescriptions, the crisis suddenly worsened in September and October 2008. We experienced a serious credit crunch, seriously weakening an economy already suffering from the lingering impact of the oil price hike and housing bust.

Many have argued that the reason for this bad turn was the government's decision not to prevent the bankruptcy of Lehman Brothers over the weekend of Sept. 13 and 14. A study of this event suggests that the answer is more complicated and lay elsewhere.

While interest rate spreads increased slightly on Monday, Sept. 15, they stayed in the range observed during the previous year, and remained in that range through the rest of the week. On Friday, Sept. 19, the Treasury announced a rescue package, though not its size or the details. Over the weekend the package was put together, and on Tuesday, Sept. 23, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson testified before the Senate Banking Committee. They introduced the Troubled Asset Relief Program (TARP), saying that it would be $700 billion in size. A short draft of legislation was provided, with no mention of oversight and few restrictions on the use of the funds.

The two men were questioned intensely and the reaction was quite negative, judging by the large volume of critical mail received by many members of Congress. It was following this testimony that one really begins to see the crisis deepening and interest rate spreads widening.

The realization by the public that the government's intervention plan had not been fully thought through, and the official story that the economy was tanking, likely led to the panic seen in the next few weeks. And this was likely amplified by the ad hoc decisions to support some financial institutions and not others and unclear, seemingly fear-based explanations of programs to address the crisis. What was the rationale for intervening with Bear Stearns, then not with Lehman, and then again with AIG? What would guide the operations of the TARP?

It did not have to be this way. To prevent misguided actions in the future, it is urgent that we return to sound principles of monetary policy, basing government interventions on clearly stated diagnoses and predictable frameworks for government actions.

Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far

 

[expat_panama]

...Every year you have to work harder than the last, for less out of your dollar, and less dollars to spend...

Ah, the old "My personal anecdotes which suffer from small samples and confirmation bias trump your data" excuse...

Let's face it, the real choice here is between admitting that we're miserable because we're lazy,

or just falling back into Drama Queen mode...

 

[DSGE]

The like between monetary policy and bubbles is ridiculous, especially since monetary policy wasn't especially loose over the last 20 years.

of course thats idiotic as usual.
Wall Street Journal Taylor Rule
Stamford University Professor John Taylor unequivocally claimed that had the Federal Reserve from 2003 -2005 kept short term interest rates at the level implied by his "Taylor Rule" " it would have prevented this housing boom and bust." This notion has been cited and repeated so often that it has taken on the aura of conventional wisdom.
By JOHN B. TAYLOR
Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should not rule out government itself as a major culprit. My research shows that government actions and interventions -- not any inherent failure or instability of the private economy -- caused, prolonged and dramatically worsened the crisis.

David Gothard
The classic explanation of financial crises is that they are caused by excesses -- frequently monetary excesses -- which lead to a boom and an inevitable bust. This crisis was no different: A housing boom followed by a bust led to defaults, the implosion of mortgages and mortgage-related securities at financial institutions, and resulting financial turmoil.

Monetary excesses were the main cause of the boom. The Fed held its target interest rate, especially in 2003-2005, well below known monetary guidelines that say what good policy should be based on historical experience. Keeping interest rates on the track that worked well in the past two decades, rather than keeping rates so low, would have prevented the boom and the bust. Researchers at the Organization for Economic Cooperation and Development have provided corroborating evidence from other countries: The greater the degree of monetary excess in a country, the larger was the housing boom.

The effects of the boom and bust were amplified by several complicating factors including the use of subprime and adjustable-rate mortgages, which led to excessive risk taking. There is also evidence the excessive risk taking was encouraged by the excessively low interest rates. Delinquency rates and foreclosure rates are inversely related to housing price inflation. These rates declined rapidly during the years housing prices rose rapidly, likely throwing mortgage underwriting programs off track and misleading many people.


Adjustable-rate, subprime and other mortgages were packed into mortgage-backed securities of great complexity. Rating agencies underestimated the risk of these securities, either because of a lack of competition, poor accountability, or most likely the inherent difficulty in assessing risk due to the complexity.
Other government actions were at play: The government-sponsored enterprises Fannie Mae and Freddie Mac were encouraged to expand and buy mortgage-backed securities, including those formed with the risky subprime mortgages.

Government action also helped prolong the crisis. Consider that the financial crisis became acute on Aug. 9 and 10, 2007, when money-market interest rates rose dramatically. Interest rate spreads, such as the difference between three-month and overnight interbank loans, jumped to unprecedented levels.

Diagnosing the reason for this sudden increase was essential for determining what type of policy response was appropriate. If liquidity was the problem, then providing more liquidity by making borrowing easier at the Federal Reserve discount window, or opening new windows or facilities, would be appropriate. But if counterparty risk was behind the sudden rise in money-market interest rates, then a direct focus on the quality and transparency of the bank's balance sheets would be appropriate.

Early on, policy makers misdiagnosed the crisis as one of liquidity, and prescribed the wrong treatment.

To provide more liquidity, the Fed created the Term Auction Facility (TAF) in December 2007. Its main aim was to reduce interest rate spreads in the money markets and increase the flow of credit. But the TAF did not seem to make much difference. If the reason for the spread was counterparty risk as distinct from liquidity, this is not surprising.

Another early policy response was the Economic Stimulus Act of 2008, passed in February. The major part of this package was to send cash totaling over $100 billion to individuals and families so they would have more to spend and thus jump-start consumption and the economy. But people spent little if anything of the temporary rebate (as predicted by Milton Friedman's permanent income theory, which holds that temporary as distinct from permanent increases in income do not lead to significant increases in consumption). Consumption was not jump-started.

A third policy response was the very sharp reduction in the target federal-funds rate to 2% in April 2008 from 5.25% in August 2007. This was sharper than monetary guidelines such as my own Taylor Rule would prescribe. The most noticeable effect of this rate cut was a sharp depreciation of the dollar and a large increase in oil prices. After the start of the crisis, oil prices doubled to over $140 in July 2008, before plummeting back down as expectations of world economic growth declined. But by then the damage of the high oil prices had been done.

After a year of such mistaken prescriptions, the crisis suddenly worsened in September and October 2008. We experienced a serious credit crunch, seriously weakening an economy already suffering from the lingering impact of the oil price hike and housing bust.

Many have argued that the reason for this bad turn was the government's decision not to prevent the bankruptcy of Lehman Brothers over the weekend of Sept. 13 and 14. A study of this event suggests that the answer is more complicated and lay elsewhere.

While interest rate spreads increased slightly on Monday, Sept. 15, they stayed in the range observed during the previous year, and remained in that range through the rest of the week. On Friday, Sept. 19, the Treasury announced a rescue package, though not its size or the details. Over the weekend the package was put together, and on Tuesday, Sept. 23, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson testified before the Senate Banking Committee. They introduced the Troubled Asset Relief Program (TARP), saying that it would be $700 billion in size. A short draft of legislation was provided, with no mention of oversight and few restrictions on the use of the funds.

The two men were questioned intensely and the reaction was quite negative, judging by the large volume of critical mail received by many members of Congress. It was following this testimony that one really begins to see the crisis deepening and interest rate spreads widening.

The realization by the public that the government's intervention plan had not been fully thought through, and the official story that the economy was tanking, likely led to the panic seen in the next few weeks. And this was likely amplified by the ad hoc decisions to support some financial institutions and not others and unclear, seemingly fear-based explanations of programs to address the crisis. What was the rationale for intervening with Bear Stearns, then not with Lehman, and then again with AIG? What would guide the operations of the TARP?

It did not have to be this way. To prevent misguided actions in the future, it is urgent that we return to sound principles of monetary policy, basing government interventions on clearly stated diagnoses and predictable frameworks for government actions.

Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far

Haha. If only that lesson could be applied to your posts.

More Taylor rule garbage. Still quoting the same couple of people as if it's meaningful.

If you want to actually respond to me with something that's not a waste of time, you need to address this argument:

Money ultimately effects the economy through NGDP. I know you're aware of the equation of exchange, MV = PY. So monetary policy (M) can be assessed by looking at NGDP (PY). Which is intuitive since money affects the price level but in the short run can change real output. If money is loose, we should see quick NGDP growth. If money is tight, we should see slower NGDP growth.

Now we see that during the low interest rate period from 2001 to 2003, NGDP growth actually slows. If the interest rate were "artificially low", this would have turned up as quick NGDP growth. So what is the low interest rate telling us?

As we can see pretty clearly here, the low interest rate is not "artificially low"; it's low because there was a fall in monetary velocity (V).

So what about the stance of monetary policy during the crisis? As you can see, they not only let NGDP growth slow, it became negative! NGDP actually fell. Sticky wage/price theory tells us that this causes a recession. So blame the Fed for not accommodating monetary policy enough to offset the fall in velocity.

 

[EdwardBaiamonte]

More Taylor rule garbage. Still quoting the same couple of people as if it's meaningful.

Garbage??? Taylor is the critic Greenspan takes most seriously. Of course as a liberal there is little that you can actually understand.


Former Federal Reserve Chairman Allan Greenspan has just published a paper which serves as a defense of his economic stewardship during the bubble years. The thesis of the paper is that a global savings glut, not a low Federal Funds rate led to the housing boom and its subsequent bust. In addition, lax regulation allowed banks to take on risk that they couldn't support.

Submitted: March 19, 2010Comments: 0 Former Federal Reserve Chairman Allan Greenspan has just published a paper which serves as a defense of his economic stewardship during the bubble years. The thesis of the paper is that a global savings glut, not a low Federal Funds rate led to the housing boom and its subsequent bust. In addition, lax regulation allowed banks to take on risk that they couldn't support.


Greenspan seems most stung by criticism from Stanford economist John Taylor who has argued that a low Federal Funds rate was a cause of the housing bubble. One of Taylor's big contributions to monetary policy is the Taylor Rule. In short the Taylor rules says that (in Ben Bernanke's words):

"In its most basic version the Taylor rule is an equation that relates the current setting of the federal funds rate to two variables: the level of the output gap (the deviation of output from its full-employment level) and the difference between the inflation rate and the policy committee's preferred inflation rate. Like most feedback policies, the Taylor rule instructs policymakers to "lean against the wind"; for example, when output is above its potential or inflation is above the target, the Taylor rule implies that the federal funds rate should be set above its average level, which (all else being equal) should slow the economy and bring output or inflation back toward the desired range."

A well regarded research paper by Richard Glarida, Jorde Galli, and Mark Gertler suggests the Taylor Rule was responsible for lowering GDP volatility since its use in the 1980s. So, Taylor seems to have some credentials.

He believes that the Fed did not follow the Taylor Rule during 2002-2005 and kept the Fed Funds rate too low for too long. The chart below shows what Taylor thinks the Fed should have done versus what it did do.



He then went on to model what he believes would have happened had the Taylor model been followed. The solid line represents actual housing starts. The small dashed line shows what Taylor's model would have predicted housing starts to be using the actual Fed Funds rates. The larger dashes show what the model would have predicted had the Fed followed the Taylor rule.



These models seem to show that Greenspan's low interest rate policy was a factor in the housing bubble.

Greenspan counters by saying the following:

"Taylor inappropriately equates starts (an increase in supply) with demand, the primary driver of home prices. The evidence suggests that it is not starts that drive prices and initiate the “upward spiral,” but the other way around."

He then takes issue with the model Taylor used, claiming the Taylor rule is not built to be expanded into housing starts:

"Housing starts, in any event, should be extraneous to Taylor’s explanation of the
bubble. It is employed because the Taylor Rule by itself is structured to indicate a proper
federal funds rate to balance the trade-off between inflation and unemployment. There
are no asset price inputs, especially home prices, called for in the Taylor Rule. Home
prices cannot be substituted willy-nilly for the CPI or core PCE price in the Taylor
paradigm. CPI could stand as a proxy for home prices if the correlation between home
prices and CPI were very high. But, it is not. The correlation between home prices and
consumer prices, and between asset prices in general, and product prices is small to
negligible or, on occasion, negative."

He also says that the Taylor rule would not explain the international scope of the housing bubble. The bubble was not centered just in the United States.

But perhaps most interesting is his analysis which shows that housing prices are much more highly correlated to long term bond yields than the Fed Fund rate.

"Between 2002 and 2005, monthly home mortgage 30 year rates led monthly U.S. home price change (as measured by the 20 city Case-Shiller home price index) by 11 months with an R2 (adjusted) of 0.511 and a t-statistic of -6.93; a far better indicator of home prices than the fed-funds rate that exhibited an R2 (adjusted) of 0.216 and a tstatistic of -3.62 with only an eight month lead.62 Regressing both mortgage rates (with an 11-month lead) and the federal funds rate (with an 8-month lead) on home prices yields a highly significant t-statistic for mortgages of -5.20, but an insignificant t-statistic for the federal funds rate of -.51."

It is, he believes a massive glut of cash caused by an inbalance in savings versus spending in places like China, mixed with lax regulation that led to the housing bubble.

So, why does any of this matter? Because even today, economists are debating whether a Fed Funds Fund rate of 0% is too low for too long. This low rate is causing pain to millions of savers who have watched the average rate on a savings account drop to below 1.5% APY. Bond yields are pitiful and mortgage rates have once again fallen to record lows.

Will this fuel future inflation or another asset bubble? My gut tells me that both Greenspan and Taylor are right. After all, the housing bubble started in 1998 when the Fed Funds rate was 6%+. Plus, the Fed Funds rate does not determine long term bond yields. Thirty-year mortgage rates are based on the 10 year Treasury bill, not the Federal Funds rate. Still there is no doubt that many ARMs did benefit from the low Fed Funds Rate. Plus, a low Fed Funds rate sends investors into longer term maturities for yield, driving those rates lower. A low Fed Funds rate helps to bring down longer-term Treasuries.

The super low Fed Funds rate may not have been the cause, but it certainly didn't help. Today, Bernanke and others needs to be vigilant that another bubble isn't forming from under an overly accomodative Fed Funds rate.

 

[Katzndogz]

Purchasing power means more than how much a person has to spend. It's how much things cost. The more goods are taxed, the more regulations a manufacturer or provider has to comply with, the more things are going to cost.

 

[DSGE]

Edward, I'm not interested in reading your copy/pastes or hearing your appeals to authority. I put the time and effort into forming a clear argument and even bolded "this is what you need to address if we're going to have a meaninful conversation". Either address the arguments that I make, or concede. I want to hear your counter-argument, not Greenspan's opinion of instrument rules.

 

[itfitzme]

I can't post links, so I can't quote the graphs.

That graph includes reserves. The basic monetary equation, MV=PQ is for money in the flow. M is the money that is in exchange for the quantity of product (Q) at price (P). V is the rate of turn over. Two times if the same money is used twice, three times if it is used three time. It isn't strictly velocity, which would be in something per second, like feet per second, but it is representative of rate so velocity is a good enough term.

P and Q are the money that is passed from one person to the other as Q is the quantity of the product that is passed in the other direction. M cannot represent static funds in accounts, especially in bank reserves.

There is, in fact, no measure of the actual flow of money. Measures on the money supply are static. For instance, we can measure a checking account at $2000 in January then $2000 in February. But, $1000 could have gone in and $1000 gone out so the flow would be $1000 while the measure of the static $2000 isn't the flow.

The monetary base is a measure of coins, paper money (both as bank vault cash and as currency circulating in the public), and commercial banks' reserves with the central bank. And any published number of the velocity of M1, M2, or even based on the monetary base do not represent the V in MV=PQ. Neither do these numbers represent M.

In order for bank reserves to influence M, the have to be borrowed against. If no borrowing occurs, there is no increase in M. Even then, at some point, it has to be paid back. So the only way that M will be see a sustained increase in if borrowing is constantly replenished.

A better representation of the monetary equation would be (Mx + dS + dC) = PQ, where dS is the change in bank balances of the public (savings) and dC is a change in the credit (borrowing). Mx would be the currency in circulation, though not money that people have in cookie jars or money in bank vaults. None of these represent money in the flow.

To the best of my knowledge, the US hasn't "printed" any money since the reserve banking system was created. The amount of Mx hasn't increased. The entire system is relying entirely on the accumulation of debt.

 

[DSGE]

I can't post links, so I can't quote the graphs.

I think you can get around it by removing the www. off the front or something...

That graph includes reserves. The basic monetary equation, MV=PQ is for money in the flow. M is the money that is in exchange for the quantity of product (Q) at price (P). V is the rate of turn over. Two times if the same money is used twice, three times if it is used three time. It isn't strictly velocity, which would be in something per second, like feet per second, but it is representative of rate so velocity is a good enough term.

P and Q are the money that is passed from one person to the other as Q is the quantity of the product that is passed in the other direction. M cannot represent static funds in accounts, especially in bank reserves.

That's not what I see when looking at the dimensions. The dimension of velocity is "per time period", say /year. On the right hand side we have NGDP, which is "dollars/year". Which leaves M to be "dollars", a stock not a flow.

There is, in fact, no measure of the actual flow of money. Measures on the money supply are static. For instance, we can measure a checking account at $2000 in January then $2000 in February. But, $1000 could have gone in and $1000 gone out so the flow would be $1000 while the measure of the static $2000 isn't the flow.

Yeah I think we measure the "flow" by just taking NGDP, which we get from estimates of total income/expenditure, and dividing it by the "money stock". The "flow" of $1000 in and out of the chequing account doesn't show up in the money stock estimate, but it certainly shows up in the NGDP estimate. And so it also ends up being shown in NGDP/M = Velocity.

To the best of my knowledge, the US hasn't "printed" any money since the reserve banking system was created. The amount of Mx hasn't increased. The entire system is relying entirely on the accumulation of debt.

"Currency in circulation outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions"

 

[editec]

STICKINESS of labor costs is in part the reason why we don't have inflation even when the M1 rate climbs.

Typically in an inflationary period, it is labor costs that are the last thing to rise in price.

And a lack of expendable money in the consumers' pockets also prevents the sort of hyperinflation that the Ron Paul types keep warning us is coming, too.

 

[DSGE]

STICKINESS of labor costs is in part the reason why we don't have inflation even when the M1 rate climbs.

Typically in an inflationary period, it is labor costs that are the last thing to rise in price.

And a lack of expendable money in the consumers' pockets also prevents the sort of hyperinflation that the Ron Paul types keep warning us is coming, too.

Wage/price stickiness means that an expansion of money will, like you said, not raise prices one-for-one in the short run; it will however raise real output in the short run. This is why you look not at inflation to assess the looseness of monetary policy, but nominal GDP (which is the price level times real output). More intuitively, we only care if new money is being spent (if it's just sitting under a mattress or being held as liquidity then it doesn't have real effects). Since NGDP is total nominal spending in an economy, if new money is being spent it will raise NGDP.

Currently NGDP is growing near its trend rate (though about 10% below its trend level), so that tells you that the giant quantity of base money the Fed injected isn't being spend (which we all know, it's just sitting in banks as excess reserves). Now the fear is that once the demand for money returns to normal, and these excess reserves start getting spend, there'll be hyperinflation. Of course that assumes that the money will be there permanently, which is not the case. The Fed are going to remove the excess reserves and return their balance sheet to normal when economic activity picks up.

http://research.stlouisfed.org/publications/review/10/11/Blinder.pdf (pdf)

 

[EdwardBaiamonte]

I put the time and effort into forming a clear argument .

but who cares about your argument?? The argument that the whole world is paying attention to is Greenspan vs Taylor. If you want to be lost in your own tiny irrelevant world go for it!! They frame the terms of the debate, not you, for some reason.

 

[DSGE]

I put the time and effort into forming a clear argument .

but who cares about your argument??

Hahaha. Are you seriously this dumb, or are you just a raging narcissist? This is a discussion forum you fuck hole. You say your opinion or argument, then other people respond with counter-arguments. When you say dumb shit, then I call you on the dumb shit, you either have to address the argument that I've made or lose and look like a moron. Seriously, why are you here, on a discussion forum, if not to discuss things with people?

The argument that the whole world is paying attention to is Greenspan vs Taylor. If you want to be lost in your own tiny irrelevant world go for it!! They frame the terms of the debate, not you, for some reason.

Again, more laughable garbage. First off, I'm not talking to the whole world. I'm not having a fucking conversation with Tom Keene as a guest on Bloomberg. I'm talking to an ignorant moron on the internet.

Second, there is no such Greenspan vs Taylor argument that anybody is paying attention to. There is, however, considerable limelight on NGDP targeting. People to endorse such a regime include (aside from the market monetarists) Tyler Cowen, Matt Yglesias, Brad DeLong, Paul Krugman, Greg Mankiw, and of course it was front and centre in the news recently when Jan Hatzius of Goldman Sachs endorsed it and Christina Romer gave her endorsement with this article.

So get over yourself.

 

[EdwardBaiamonte]

You say your opinion or argument, then other people respond with counter-arguments. When you say dumb shit, then I call you on the dumb shit,

if so then you can find a forum to debate about knitting or table tennis and be just as happy. I get paid to debate about important things, and hopefully will earn my place in heaven as a result. If you want to narcissistically bother with your idiotic and irrelevant distractions go for it. Sorry!!

 

[EdwardBaiamonte]

First off, I'm not talking to the whole world. .

you'll find you'll have much a larger audience and feel better about yourself if you talk within the terms and context that the world is using rather then being so absorbed within yourself.

 

[DSGE]

First off, I'm not talking to the whole world. .

you'll find you'll have much a larger audience and feel better about yourself if you talk within the terms and context that the world is using rather then being so absorbed within yourself.

Haha. If that isn't the pot calling the kettle self absorbed. I see you're only responding to (and likely only reading) the first sentence. Now I know why I keep responding to your posts, it's always a good laugh.

 

[EdwardBaiamonte]

Haha. If that isn't the pot calling the kettle self absorbed.

reread for comprehension! you're the one who wants a narcissistic personal conversation in your own context and vocabulary while I want to conversation within the Greenspan/Taylor context and terminology

 

[DSGE]

Haha. If that isn't the pot calling the kettle self absorbed.

reread for comprehension! you're then one who wants a narcissistic personal conversation in your own context and vocabulary while I want to conversation within the Greenspan Taylor context and terminology

I was talking to Paulie about monetary policy and bubbles and you interjected quoting John Taylor. You don't get to barge in on somebody else's conversation and then dictate the terms of that conversation. Also, the fact that you think quoting Taylor's opinion is somehow evidence is astonishing.

That aside, the whole point is that I disagree with John Taylor. I don't use interest rates to assess monetary policy, I explained why, and you're demanding that I ... what?... have to express my disagreement by way of a Greenspan quote?

Sort your shit out dude.

 

[EdwardBaiamonte]

That aside, the whole point is that I disagree with John Taylor.

And so does Greenspan but he's important so try to frame your argument in that more relevant context.