Larry Summers Welcomes Ben Bernanke To The Blogosphere The Only Way He Knows How

By telling Bernanke he doesn't know jack about monetary policy.
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Very nice. Now let the grownups do the talking.

Which is to say, rudely. Or, perhaps more charitably, with an aggressively polite explanation of how he, Larry Summers, is right, as he always is. What does it all mean? Well, it means we are screwed, although not as screwed as the Europeans and Japanese—but their being screwed is going to screw us, too. It may also mean that someone else should be running the Fed, but Larry’s going to let you draw your own conclusions on that one.

I have argued that the 2003-2007 recovery and quite possibly the late stages of the 1990s recovery were powered in significant part unsustainable financial conditions. Ben is skeptical...I think that it will be hard to escape the conclusion that household debt grew at an unsustainable pace in the decade before the great financial crisis and that this was an important spur to growth. And I am fairly confident that wealth effects associated with a booming stock market were important in the late 1990s...Throughout the industrial world the vast majority of the revisions in growth forecasts have been downwards for many years now. So, I continue to urge that it is worth taking seriously the possibility that we face a chronic problem of an excess of desired saving relative to investment. If this is the case, monetary policy will not be able to normalize, there will be a continuing need for expanded public and private investment, and there will be a need for global coordination to assure an adequate level of demand and its appropriate distribution.

On Secular Stagnation: A Response to Bernanke [larrysummers .com]
Why are interest rates so low? [Ben Bernanke's Blog]

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It takes a strong man to look at Ben Bernanke's gentle, bearded face and tell him to piss off. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, is just such a man. Lacker's used every opportunity to let Bernanke and his rotating cast of puppets that they're wrong about the stimulus and that they're imperiling what used to be the Fed's only mission, controlling inflation. And he's apparently doing so at substantial risk to his own standing, because while bickering, name-calling and kicking-and-screaming disagreement is all the rage every else in the District of Columbia, dissent does not go over well at the marble Politburo on Constitution Avenue NW.