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Alright, you don't think that the Kerry loss was in any way connected with his pro-war position? Do you think that Kerry was too far left, some sort of McGovern or something?

you think? I think that the visceral hatred and vilification of George Bush was a powerful rallying point for the Democratic grassroots. The Bush-as-belligerent-racist-ignorant-jock-proto-fascist bogeyman certainly drew a lot of lefties out of the anti-corporate Green Party and back into the...

"except it is an aesthetic disaster, and, partly, an ideological disaster (certainly wrt those parts that constitute the wilder fringes of the Tea Party)." From what point of view? From a 1970s parent's point of view, punk was an aesthetic disaster -- but that was kind of the point, right...

"This Tea Party nonsense is an ideological and aesthetic disaster, augmented by weird Palinism. (Although, of course, you can't really equate Tea Party activism with Republicanism, as such. But the tone and tenor of Republican organs, NRO for example, has gone sharply downhill under their...

what do you mean? I'm guessing that you would say it's still all about the interest rate, even if the Fed is letting it float?

Yeah, that's a BETTER way to do it, but not the only way. " If banks require reserves, the CB must supply them, or abandon the target" That's exactly what Volcker did. You can either endogenize the interest rate or the supply of reserves. Obviously letting the quantity of reserves float is...

"The quantity of reserves (fiat currency) has nothing to do with the quantity of loans (credit money) being made. Nothing." Not true. Just because pushing on a string doesn't increase loans, that doesn't mean that pulling on the string (reducing reserves) won't constrain loans. Raising...

Looks like it will go through, but I still want to see a vote on the public option. Bernie Sanders backed down on it under pressure, but the corrupt Dems who are against the public option should still be forced to show their colors. There's really no reason not to allow a vote on a public...

maybe the case, but it's kind of besides the point. Canada has a pretty bubblicious housing market as well. Pretty much everyone in the western world had a housing bubble, Canada's and Australia's just never really burst because they had a stronger financial systems, stronger economies and...

yeah I think that's basically it although the way that Sumner sets it up, I don't think it would even work as a forecasting device

yeah I'm not sure. It's difficult to disentangle what he means. for one thing that whole bit is by Bill Woolsley, who at least isn't quite as stupid as Sumner Here's the thing: supposing that this system works, why would anyone buy one of those contracts when the Fed would be working to...

no, I don't think so anyway. It's a futures contract, so I think the only thing that would initially happen is that the collateral from both sides would be posted with the exchange. If anyone's position gets really bad they would just have to post more collateral or be forced to sell/cover...

heres the thing though, Sumner has the Fed buying and selling the NGDP futures at a fixed price, but he also wants to use it as an indicator of them they need to increase the money supply (on a generous reading of his position). But how can you tell that you need to raise or lower actual NGDP...

It would have to be cash settled based on some agreed standard figure, like government CPI on the settlement date. Say we enter into a $100 futures contract on the price level. I go long and you go short. If the price level rises by 2% you would owe me $2 at settlement, but it sinks by 2% I...

the difficult thing about explaining Sumner is that he gets just about everything wrong. You could only believe what he believes based on a complex interlocking system of wrong ideas. There's no single wrong idea that is the source of his mistaken view. It's the sum of a multitude of...

well a combination of Rational Expectations gone awry and the problem I bring up in my second comment there. It could work if there were a market for spot inflation like there is for pork bellies - but obviously there isn't.

The other main thing is that futures change spot prices by forcing arbitrage between the futures market and the spot market. If you drive up the price of corn futures, you will drive up the price of physical corn because arbitrageurs will start buying it off the spot market and selling it...

Well, it's difficult to explain something that fundamentally doesn't make any sense, but here goes: Sumner thinks that the US should not target inflation, or try to separate inflation from real growth. He thinks that they should just target NGDP which is the combination of inflation and real...

haha yeah it's pretty funny to see. someone needs to mention to them that the strongest financial systems that didn't implode were zero reserve systems in Canada and New Zealand (Australia too maybe?) I'm curious to see how the monetarists like Sumner will make sense of this move. Also, I...

yeah I call it the Krugman Derangement Syndrome. Sumner is the most ridiculous... he's like Captain Ahab. Krugman does make mistakes once in a while, but they are pretty rare. Most of the time his critics only succeed in showcasing their bumbling mediocrity. For some reason this China thing...