The New York Times finally got around to running economist Paul Krugman’s April Fools’ Day column. It might be a few days late, but you don’t want to miss it. It’s a real gem:
Fundamentally, the right wants the Fed to obsess over inflation, when the truth is that we’d be better off if the Fed paid less attention to inflation and more attention to unemployment. Indeed, a bit more inflation would be a good thing, not a bad thing.
What a sidesplitter. Nothing like a bit of inflation to devastate Americans’ meager savings accounts while raising the cost of basic goods in a sluggish economy, am I right? It’ll be Stagflation all over again!
It’s great to see that even a Nobel Laureate like Krugman can still have a wicked sense of humor. Or at least it would be – if he were kidding:
To be sure, more aggressive Fed policies to fight unemployment might lead to inflation above that 2 percent target. But remember that dual mandate: If the Fed refuses to take even the slightest risk on the inflation front, despite a disastrous performance on the employment front, it’s violating its own charter. And, beyond that, would a rise in inflation to 3 percent or even 4 percent be a terrible thing? On the contrary, it would almost surely help the economy.
Yep, he’s serious. Then again, he probably hasn’t had to gas up his car or shop at a supermarket – that’s for the little people, who feel the impact of a weaker dollar every time they run errands.
William Anderson does a great takedown of the Krugman piece at his blog, Krugman in Wonderland. You might have an instinctive urge to second guess Krugman’s looney policy proposals, but check out Anderson’s blog for some consistently insightful criticism of the Keynesian thinking that makes a pro-inflation stance possible.