Saturday, August 11, 2012

Brad DeLong is a big fat idiot?

For thinking he'd get away with this challenge of Scott Sumner;
No, it certainly isn't, as Prof. Sumner and his Merry Band of Men quickly proved, at all difficult finding instances of DeLong claiming (in the not so distant past) that fiscal stimulus was needed, because monetary policy was out of ammunition.  From the plethora of examples, we sample;

  1. I tried to post these to Brad’s site yesterday but he deleted my comment…
    January 19, 2009:
    “The fact that monetary policy has shot its bolt and has no more room for action is what has driven a lot of people like me who think that monetary policy is a much better stabilization policy tool to endorse the Obama fiscal boost plan.
    The fact that Gary Becker does not know that monetary policy has shot its bolt makes me think that the state of economics at the University of Chicago is worse than I expected–but I already knew that, or rather I had thought I already knew that.”
    January 27, 2009:
    “I think we have done [monetary stimulus--the central bank buys short-term safe government bonds for cash] and can’t do any more of it and expect it to have any effect.”
    February 09, 2009:
    “Why We Need a Big Fiscal Boost Program:
    Because monetary policy is already tapped out–Treasury interest rates are at zero”
And this gem;
DeLong: “MONETARY POLICY HAS REACHED ITS LIMITS… I am not sure these two points of view are consistent–if we are near a liquidity trap, expected open market operations should, after all, have little impact on inflation as well as little impact on real activity.
Couldn't have happened to a nicer guy.

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