Brad Delong, New Monetarist

And I Do Not Understand the Federal Reserve's Current Thinking at All...

There are no signs in the pace of technological progress, in the level of investment, in the pace at which the American labor force educates itself, in measures of capacity utilization, in signs of upward wage pressure due to labor quality bottlenecks, or in surging commodity prices due to supply bottlenecks to suggest that the path of growth of U.S. sustainable potential GDP is materially lower today than was believed back in 2007.

He wants to know what the Fed is going to do about this. Brad identifies the problem, DC is a snake pit with multipliers less than one:

It is true that fiscal policy is and has been sub-optimally tight due to Republican Congressional obstruction and the Obama administration's turn in January 2009 2010 to deficit reduction as job #1 with Obama's call that since "families across the country are tightening their belts… the federal government should do the same".

So, Brad's new monetarism theory suggests that loaning a snake pit in DC will help the economy. That is some kind of Money Illusion when cheap money for DC causes more efficiency in DC?

 At least Krugman has given up on the idea that DC can do anything rational. His theory is that cost benefit analysis is impossible, so random acts of government work just as well. BBoth of these theories are wrong. The correct theory is to make DC efficient, possibly by using some theory of democracy. Unfortunately, the UC system are believers in undemocracy, its in the school charter, no real democracy allowed.

The nation suffers another problem, California. The nation is waiting for a huge economy, whose government has been floundering for 20 years, to construct, in the next month, a completely revamped medical industry. If Brad worries about the swamp we call DC, then Brad might worry that he has only two official senators, and that is why Brownocare is a unglorious mess. Brad has only two Senators because Brad signed an oath, when he was employed by UC. That oath: No one talk about the lack of Senate democracy because UC lives on that margin of undemocracy.