Mattheus von Guttenberg defends career politician Ron Paul thusly:
"Paul doesn't highlight it often (because he is not speaking to a crowd of students or postdocs trained in economics) but the whole point of talking about the erosion of the monetary unit is to emphasize the non-neutrality of money in the short run.
But of course, money is neutral in the long run. Who cares if the money unit is 50% of what it used to be if your paycheck is 200% what it used to be? I understand that point, Daniel. But Paul is trying to bring attention to the interim process. In the short run, money is most certainly not neutral and large influxes of it benefit specific people and organizations at the expense of other people and organizations."
Do you all think this is justified? My first thought was that accepting the short-run non-neutrality of money is pretty coincident with advocacy of expansive monetary policy. That's sort of where it all starts. But I suppose that's not strictly necessary, so we can let that one go.
Still, I think Mattheus is wrong. If you know money is neutral in the long run, you don't go around spouting as your main argument against the Fed that the dollar has lost 95% of its value since 1913 (or whatever the number is). If you actually know that non-neutrality is a short-run issue, what Ron Paul goes around saying is precisely what you wouldn't want to say if you thought most people don't understand short-run non-neutrality.
If you understood economics, but were worried other people didn't, what you would do is talk about real wage trends and trends in the real value of fixed incomes and the minimum wage. That's a short-run non-neutrality point.
Friday Night Music
2 hours ago