Monday, October 4, 2010


I will not be adding new posts to Proxy Partisans for some time now.

It has been fun and a privilege, and I hope to resume when the time is right.

Thank you to all readers.

Sunday, October 3, 2010

Posen's speech

Adam Posen is a senior fellow at the Peterson Institute for International Economics , and you can click on that link to learn more about him. Heavy-duty important economist with trans-Atlantic influence. Member of the monetary policy committee of the Bank of England, etc.

Posen spoke on September 28 to the Hull and Humber Chamber of Commerce, and laid out "the case for doing more." See the whole speech here.

For more of what? by whom? Central bankers "in the UK and beyond," should be doing more to promote recovery, and should not concern themselves with the risk of inflation that this creates.

"[P]olicymakers should not settle for weak growth out of misplaced fear of inflation. If price stability is at risk over the medium-term, meaning over the two- to three-year time horizon ... it is on the downside."

That just sounds insane to me. It seems that our economics gurus have uterly lost sight of the most basic facts about the business cycle. Maybe this video will help. Surely recent events have vindicated Hayek's concern about the boom and bust cycle? Those responsible for the bust are always those who stoked the preceding boom.

We're suffering from the hangover from the last boom-bust, and we're reaching for a hair of the dog. Breaking the addiction would be a better plan.