"Tomorrow is Lalaland, doing Bill Maher. Also on, Art Laffer.
This might be an occasion to revisit some of the predictions various parties made a few years back. Here’s Laffer three years ago, Get Ready for Inflation and Higher Interest Rates:
But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.OK, it’s only three years, so I guess there’s still time for the hyperinflation — but it had better get a move on. I think my take is doing a bit better:
Let me add, for the 1.6 trillionth time, we are in a liquidity trap. And in such circumstances a rise in the monetary base does not lead to inflation."He DID NOT say that 1.6 trillion times. That is blatantly false. Geez, I wish this hack would just quit it already.
[If this post confuses you (1.) don't worry about it, and (2.) why the hell aren't you reading Bob Murphy? He's got some of the best blogging on the internets!]
To quote Bill Maher: "I kid Bob Murphy".
I do think this will be a particularly good thing to talk about. The European comparisons are so wishy-washy to me because of the damn counterfactuals. But what Krugman is pointing at here is a solid qualitative difference in prediction. Not dueling, dubious marginal effects. I don't think economists have crystal balls for complex systems - I'm suspicious of forecasting. But this sort of qualitative forecasting oughta mean something and oughta be possible. And if I recall even Bob Murphy has backtracked on some of the stronger claims of the sort that Laffer is quoted on above.
btw - here's a great performance of another wonderful economist on Bill Maher. Krugman is long overdue: