Saturday, November 1, 2014

Oeconomico est omnis divisa in partes tres

And the worst of them can't get it through their thick heads that interest rates are not 1. the price of money, 2. the transmission mechanism of monetary policy, nor 3. a useful way to think about recessions. Even when dressed up in ersatz Latin;
Princeps Cogitationis: You have just made me sit through a twenty-minute dialogue! I could have read Summers’s original piece in ten minutes!
Thrasymachus: But you wouldn’t have read it, would you? And if you had you wouldn’t have understood it because you would still be ignorant of the proper intellectual context.
Princeps Cogitationis: But how do I boil this down to soundbites? I need soundbites–preferably scary ones about risks that make people sit up and pay attention!
Oeconomicarus: Sorry. Can’t help you. The secular stagnation income has very high asset prices and healthy profits because the lousy labor market produces a depressed labor share. It’s not very good for entrepreneurs. But it’s not the kind of thing to scare the currently rich–that is one big reason we are right now in it.
Though great minds do think alike on what was the money graph;

Which is worth pondering with an election coming next week--who is responsible for the performance shown by that red line.

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