As many of you probably saw, Clark Johnson has the first post in a series on Keynes and monetary policy over at Lars Christensen's blog. Johnson is a well regarded economic historian, and I found the post interesting if a bit puzzling. I hope to blog in more detail later when more of the posts come out.
I did not find it puzzling in a way that was different from how I always find market monetarists puzzling. The argument just seemed to boil down to "Keynes did like Roosevelt's devaluation a lot, but he also was pushing fiscal policy really hard so he thought monetary policy was ineffective" [my paraphrase, not his words... for new readers if I quote it's always written in blue - if it ain't blue, it's a paraphrase or a hypothetical exchange].
Johnson concludes this post with: "Yet Keynes seemed to dismiss this entire episode [the devaluation] in his call a few months later for fiscal stimulus!"
What I need explained to me is why "calling for fiscal stimulus" is equivalent to "dismissing monetary stimulus". You see this a lot, and maybe market monetarists have convinced themselves of the equivalence, but I can tell you a lot of us Keynesians are not clear on the argument.
Good info on the NRA in here. Bad policy - very bad policy. The important thing to remember is that although this is definitely part of the New Deal and needs to be laid at Roosevelt's feet, it's not a part of the New Deal that you'll find many economists applauding.
More later hopefully.
Over at Project Syndicate: The Internet's Next Act
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