{"id":16515,"date":"2014-03-21T15:35:46","date_gmt":"2014-03-21T19:35:46","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=16515"},"modified":"2014-03-21T15:36:41","modified_gmt":"2014-03-21T19:36:41","slug":"the-timidity-trap","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2014\/03\/21\/the-timidity-trap\/","title":{"rendered":"The Timidity Trap"},"content":{"rendered":"

The New York Times<\/em> has the OpEd The Timidity Trap<\/strong><\/a> by Paul Krugman.<\/p>\n

And I\u2019d argue that an important source of failure was what I\u2019ve taken to calling the timidity trap \u2014 the consistent tendency of policy makers who have the right ideas in principle to go for half-measures in practice, and the way this timidity ends up backfiring, politically and even economically.
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\nThe classic example is the Obama stimulus, which was obviously underpowered given the economy\u2019s dire straits. That\u2019s not 20\/20 hindsight. Some of us warned right from the beginning<\/a> that the plan would be inadequate \u2014 and that because it was being oversold, the persistence of high unemployment would end up discrediting the whole idea of stimulus in the public mind. And so it proved.<\/p>\n

What\u2019s not as well known is that the Fed has, in its own way, done the same thing. From the start, monetary officials ruled out<\/a><\/strong> the kinds of monetary policies most likely to work \u2014 in particular, anything that might signal a willingness to tolerate somewhat higher inflation, at least temporarily. As a result, the policies they have followed have fallen short of hopes, and ended up leaving the impression that nothing much can be done.<\/p><\/blockquote>\n

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This is another ironic Paul Krugman piece where he unknowingly identifies his own problem and blames it on others.<\/p>\n
The irony is that a purported Keynesian economist is too timid to come right out and say what it is that Keynes taught us.\u00a0 There is no monetary solution to this problem.\u00a0 Anybody who pretends that the Fed has any effective tools to combat the type of Great Recession that we faced is setting us all up for a huge disappointment.<\/p>\n
Krugman does identify the weakness in Obama’s stimulus.\u00a0 He should never leave that topic.\u00a0 To hint that there is another solution in the hands of the Fed is to promote Milton Friedman propaganda.\u00a0 At various points, Krugman admits that he was mesmerized and bamboozled by Friedman, but he seems to forget these moments of clarity for the most part.<\/p>\n","protected":false},"excerpt":{"rendered":"
The New York Times has the OpEd The Timidity Trap by Paul Krugman. And I\u2019d argue that an important source of failure was what I\u2019ve taken to calling the timidity trap \u2014 the consistent tendency of policy makers who have the right ideas in principle to go for half-measures in practice, and the way this […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-16515","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/16515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=16515"}],"version-history":[{"count":2,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/16515\/revisions"}],"predecessor-version":[{"id":16517,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/16515\/revisions\/16517"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=16515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=16515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=16515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}