Friday, August 2, 2013

Madrick on why Summers should NOT be appointed to the Fed

Nap time at the White House

After, Dean Baker and Tom Palley, now Jeff Madrick explains why Summers would not be good for the Fed. Jeff says more directly than others that "inflation is his big concern" and that "jobs will remain hostage to Wall Street needs if he is chairman." And by the way, Dean, Tom and Jeff well aware of the limits of Clintonomics (Rubinomics) and the unsustainable bubbles that drove the 1990s and 2000s booms (if we can call the Bush period a boom), while Summers was clueless.

Jeff also picks up the point about how New Kenesians are more Monetarists than Keynesians. He quotes Summers saying that:
"As for Milton Friedman, he was the devil figure in my youth. Only with time have I come to have large amounts of grudging respect. And with time, increasingly ungrudging respect."
The natural rate, a very anti-Keynesian principle, and Friedman's only really important contribution (a negative one, of course) is what underpins Summers concerns with inflation, at least from a theoretical perspective.

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