Summers: I believe that these developments all reflect a growing awareness of the importance of the secular stagnation risks that I have highlighted over the lastseveral years. There is a growing sense that the world is demand short—that the real interest rates necessary to equate investment and saving at full employment are very low and may be often unattainable given the bounds on nominal interest rate reductions. The result is very low long term real rates, sluggish growth expectations, concerns about the ability even over the fairly long term to get inflation to average 2 percent, and a sense that the Fed and the world’s major central banks will not be able to normalize financial conditions in the foreseeable future.
The liberal economists cannot bring himself to say pension payments and entitlements have wrecked the economy. So we get this ridiculous transformation of variables, low growth is low demand. No kidding you idiot. Try telling us the actual facts for once.
Then we have Delong:
''Confidence in Federal Reserve Economic Management is, Right Now, Lacking''
OK, the Fed does not manage the economy. That fiction was created by the MIT basket weavers and has since been debunked many times. Delong should cut the hat tricks and state the truth, he and the UC professors want their pensions guaranteed, and they won't get it.
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