Quite wondrous logic

The risk in question comes from Janet Yellen’s stated desire to unwind US quantitative easing.

The consequences of this, much heralded and now anticipated, change in central bank behaviour will be dramatic, and almost certainly pretty ghastly.
….
Second, the dogma is that monetary policy is needed. We now know it isn’t. It is fiscal policy that has to be used to manage the real economy. The era of the dominant central banker is over. The trouble is that they yearn for the 1990s when they thought they ruled the universe. Now they don’t but dogmatically they do not want to let go.

Changes in monetary policy are hugely, vastly, important. Therefore we must not use monetary policy to manage the economy.

Whut?

20 comments on “Quite wondrous logic

  1. All Murphy cares about is fiscal policy – there is, as far as I can see from his rambling and semi-coherent output, literally no economic problem which cannot be solved with more taxes and higher spending

  2. I enjoy cases where a problem is solved with less spending – the drop in teen pregnancies since the Coalition coincided with the funding for preventative programmes being canned.
    Snippa’s gig just could not compute that.

  3. This is pure Elynomics if you consider it sequentially:

    1) Murphy says QE will never be reversed
    2) QE is to be reversed
    3) It will be reversed

    I concede that this isn’t a universally acceptable logic but it has the say niche appeal as the thoughts of L Ron Hubbard.

  4. ‘And third, it is still thought that government must be constrained by bond markets to live within its means, which was a myth QE shattered but which frightens bankers enormously because in the hands of a socially motivated government QE could be used, as I have long suggested, to fund investment by a government in the real economy to transform the way it works for the benefit of ordinary people, with the conventional suppliers of capital being sidelined in the process. The battle over QE is, then, a battle fir the future of more than money, debt and the public finances; it is battle over who has control within the economy. Is that to be government and people, or bankers?’

    This was for me the most hilarious part of the entire post but I could have put in almost any paragraph. He is mentally unbalanced to a degree that I fear for his mental health. I mean just absolutely batshit crazy stuff.

  5. Doesn’t this manic word-spinning just prove that there is no possible topic that Snippa is capable of understanding; no policy area on which he does not hold a bat-shit crazy position?

  6. He clearly doesn’t understand the debate over monetary policy and the ways in which Central Banks should think about what they should target. His intellectual hinterland really is quite remarkably small (basically his tiny little brain) – although to be fair the debate over policy – which is highly technical and involves quite a lot of maths – is probably well beyond him.

  7. I mean just absolutely batshit crazy stuff.

    Megalomania is never pretty. Murphy sees himself as something of a Savior Of Mankind. If nothing else, it explains why he has so little regard for other people.

  8. Dennis the Peasant said:
    “Megalomania is never pretty. Murphy sees himself as something of a Savior Of Mankind. If nothing else, it explains why he has so little regard for other people.”

    Which way round is it? Does he not read anyone else’s work because he believes he knows everything, or does he have to say that everyone else is ignorant (or biased) to cover up the fact that he hasn’t read anything else?

  9. “Second, the dogma is that monetary policy is needed. We now know it isn’t. It is fiscal policy that has to be used to manage the real economy.”

    Wait… wasn’t there a “Green QE”? Isn’t that monetary policy, not fiscal policy? Wasn’t it needed? Or am I getting mixed up?

    And wasn’t there a “People’s QE”? Isn’t that .. etc?

  10. Mbe… That was so yesterday and the day before. Now we are gobbling up EU money on the “Meat Coffers” project

  11. Richard: Which way round is it? Does he not read anyone else’s work because he believes he knows everything, or does he have to say that everyone else is ignorant (or biased) to cover up the fact that he hasn’t read anything else?

    That’s the point I was fumbling towards earlier. Murphy is a closed system where externalities like other books or theories going back decades or even centuries have no place. Government policies which go counter to Murphy’s prescriptions are perverse and wrong.

    Consequently Murphy’s decree that QE will never be reversed is the Word of Murphy and should the WoM be cast aside, only ghastliness of biblical proportions can ensue.

  12. Which way round is it? Does he not read anyone else’s work because he believes he knows everything, or does he have to say that everyone else is ignorant (or biased) to cover up the fact that he hasn’t read anything else?

    I do not think it is an either-or proposition with Murphy. My sense is that he does read, but doesn’t read in the way most people do. I suspect he reads only that which he believes will be useful… In other words, he probably reads only that which he believes will be agreeable to his worldview, and he reads it quickly and uncritically. He does not read to learn, he reads to (1) validate, and (2) gather (cherrypick) data he thinks will be useful to himself.

    Example: Reading Murphy over the years, it is quite obvious he has never really read Adam Smith, and so what he has “learned” about Smith’s writings has come from sources that he knew to be hostile to Smith. That he misunderstands so much of Smith is due to the fact that he isn’t interested in learning Smith… He’s interested in discrediting Smith because in his own mind that bolsters his worldview.

    Beyond that, what little he has learned seems to come secondhand. Beyond Smith, you get the sense he’s never read Keynes or Richardo, despite the fact that he has, at times, claimed to be a follower of each.

    As an accountant, I can tell you that whenever he wanders off into discussions of anything accounting related, I get the strongest sense that he doesn’t really read the professional literature he tries to use… He seems to be more of a skimmer than a reader, and if true it would explain why he so often tends to butcher facts related to the profession.

  13. Dennis

    I think you are spot on with the diagnosis – he is really a polemicist, rather than a serious writer on political economy or economics. If he has read Smith he has certainly not read the Theory of Moral Sentiments and I’ll need to prevail upon the legendary Noel Scoper to send me links as to where he has claimed to be a follower of Ricardo – that’s extraordinary, even by his standards.

    As someone who has a friend who works closely with Murphy, one facet of both people’s approach (at least based on reading Murphy’s blog) which bolsters your thesis is that contrary evidence that comes from a source like Tim (for example) is dismissed as ‘Trolling’ ‘Neoliberal’ or other such label that means it can automatically be discounted without the need to argue against it.

    It’s an almost backhanded tribute to him, or a reflection of how low the quality of intellectual debate has sunk in the UK that he is taken as seriously as he is. In the pre-internet age he would have been read by about 17 people in ‘The Socialist worker’ or something….

  14. “skimmmer or scammer?”

    Interesting question.

    Prompted by his policy on what comments he allows to be published on his blog. The skimmer hypothesis is reinforced by the amount of times he lets through comments that are obviously going in a direction he doesn’t want to go. He can’t be actually reading them. Then he finds he’s got himself in a position, he’s having trouble refuting them & ends up with the “your wasting my time – you’re blocked”.
    The why takes you in the scammer direction. That the purpose of the blog is to get as much Murphy as possible out there. A full comments section suits his posture as the alternative economics guru. I’ve long harboured a suspicion that Murphy the economist is entirely a gig. He’s just writing things push the right buttons in his target market. So the logic in comprehending him is to work from the button back to what he’s written, not look for anything coherent in the content. There is no Murphonomics.

  15. It’s worth going back to archive material & looking at Murph’s articles on setting up tax efficient personal service companies for one’s skivvies, in this light. He’d wangled himself a writing gig for the Graun. He needed content. That was content.
    But it doesn’t square with his lifelong commitment to Quaker influenced socialist dogoodery. Sorry, but Damascene conversions doesn’t cut tit.

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