Welcome to the party, Larry

Shall we compare to a Summers day at the blog? Off to a pretty solid start (again, we agree with Scott Sumner). Summers is skeptical about the Fed's itchy trigger finger; Why the Fed must stand still on rates.

Why the Fed must stand still onWhy the Fedd must stand still on rates

Two weeks ago I argued that a Federal Reserve decision to raise rates in September would be a serious mistake. As I wrote...the market was assigning a 50 percent chance to a rate hike. The current chance is 34 percent. Having followed the debate among economists, Fed governors and bank presidents I believe the case against a rate increase has become somewhat more compelling even than it looked two weeks.

Now, we wish he'd become even bolder and say something along the lines that the Fed should realize, after all these years, that Milton Friedman was correct to state that interest rates are not the price of money. They're the price(s) of credit.

The interest rate is not the price of money.... The price of money is how much goods and services you have to give up to get a dollar. You can get big changes in the quantity of money without any changes in credit.

.... You must sharply distinguish between money in the sense of the money or credit market, and money in the sense of the quantity of money. And the price of money in that second sense is the inverse of the price level--not the interest rate. The interest rate is the price of credit.

If economists want to stop confusing themselves, they need to stop thinking of monetary policy in terms of raising and lowering an interest rate (such as the Fed Funds rate at which banks lend overnight to each other).

Two weeks ago I  argued that a Federal Reserve decision to raise rates in September would be a serious mistake.  As I wrote my column, the market was assigning a 50 percent chance to a rate hike. The current chance is 34 percent. Having followed the debate among economists, Fed governors and bank presidents I believe the case against a rate increase has become somewhat more compelling even than it looked two weeks ago. - See more at: http://larrysummers.com/2015/09/09/why-the-fed-must-stand-still-on-rates/#sthash.qm0kDWff.dpuf

Two weeks ago I  argued that a Federal Reserve decision to raise rates in September would be a serious mistake.  As I wrote my column, the market was assigning a 50 percent chance to a rate hike. The current chance is 34 percent. Having followed the debate among economists, Fed governors and bank presidents I believe the case against a rate increase has become somewhat more compelling even than it looked two weeks ago. - See more at: http://larrysummers.com/2015/09/09/why-the-fed-must-stand-still-on-rates/#sthash.qm0kDWff.dpuf

Two weeks ago I  argued that a Federal Reserve decision to raise rates in September would be a serious mistake.  As I wrote my column, the market was assigning a 50 percent chance to a rate hike. The current chance is 34 percent. Having followed the debate among economists, Fed governors and bank presidents I believe the case against a rate increase has become somewhat more compelling even than it looked two weeks ago. - See more at: http://larrysummers.com/2015/09/09/why-the-fed-must-stand-still-on-rates/#sthash.qm0kDWff.dpuf