Friday, December 16, 2011

Monetary Policy

Paul Krugman's latest article is a dig at Ron Paul and his economic policies. This is one area that I don't know much about, and so parts of this article went over my head. But, the premise is hard to miss: that the GOP has adopted an economic view similar to Pauls, that they have claimed the expanded monetary base would lead to inflation, and that they have stuck to this view even in the absence of evidence to support them. In fact, the opposite has happened, but they continue to say that we are on the cusp of inflation, on the edge of depression, and on the point of financial ruin.

The interesting this is that none of this has come to pass. Krugman points out that, despite all these warnings, nothing that was predicted has happened.

What bothers me most about what Krugman says is the observation that this is a pervasive mentality across the GOP. It is held onto despite evidence to the contrary and continues to do so. Not only is this a bad way to believe in anything, but it directly jeopardizes economic recovery because it makes the GOP resolute in their opposition to promoting these policies.

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