Comments on: Mankiw: Defer to the Philosopher-Kings

By: Rafe Champion

Rafe Champion — Wed, 01 Oct 2008 06:16:52 +0000

Has anyone explained why everyone will go down because some assets have been over-valued as the parcel was passed from one player to the next and a some of them have been caught holding the parcel when the music stopped?

By: Peter Klein

Peter Klein — Mon, 29 Sep 2008 23:12:16 +0000

Steve, on #1, the point isn’t whether Mankiw shares Bernanke’s theoretical framework, but whether the rest of us do. Greg must think we’re all New Keynesians now, as Tricky Dick might have said. But we’re not.

On #3, that’s exactly my point. Greg dismisses public-choice concerns as unworthy of comment. That he and Ben are pals is about as relevant as Bush getting a warm fuzzy when he looks into Putin’s eyes.

By: spostrel

spostrel — Mon, 29 Sep 2008 22:51:09 +0000

Greg has expressed considerable discomfort with the B-P plan, but he knows that when credible, informed people start taliking about a total collapse of lending and Depression-level dislocation you have to think about those claims. I am also opposed to the B-P plan (although I’m sure Peter wouldn’t be too enthused about what I would prefer to do instead). But no one is going to take anyone seriously who doesn’t think the equivalent of a massive bank run is something to worry about.

As to Peter’s four points.

1. Mankiw is a Keynesian in his view of the business cycle. So is Bernanke. So he finds Bernanke a credible interpreter of the data to which Bernanke has preferential access.

2. Mankiw thinks Bernanke has good practical judgment and more specific information than he does.

3. Mankiw has expressed unease at Paulson’s motives and the whole Wall Street incestuousness of this intervention, but he (I believe correctly) assesses Bernanke’s motives as avoiding a financial collapase that will rerun of the Depression. That is Bernanke’s special area of expertise and something we would expect him to be especially concerned about.

4. Calling avoidance of a great crash a concern with “efficiency” is a bloodless way of talking about avoiding widespread misery. These aren’t Harberger triangles being discussed. I’m happy to let all these Wall Street guys go under if they screwed up, but I’m not so eager to punish them that I’m willing to take everybody else down with them.

By: Mike

Mike — Sun, 28 Sep 2008 16:44:10 +0000

“If I were a member of Congress, I would sit down with Ben, privately, to get his candid view. If he thinks this is the right thing to do, I would put my qualms aside and follow his advice.”

OK. That’s it. Mankiw is officially removed from my list of Economists Worth Listening To.

By: Kiss-ass economics | The Libertarians

Kiss-ass economics | The Libertarians — Sat, 27 Sep 2008 14:56:09 +0000

[...] and Markets takes economist-to-the-GOP-stars Greg Mankiw to task for arguing Congress should defer to the supposed genius of messers Paulson and Bernanke: [...]

By: Mark

Mark — Sat, 27 Sep 2008 14:22:57 +0000

I, too, am somewhat shocked by the complete ignorance among the profession of the public choice aspect of this. But then again, when your craft is honed in schools that view the profession as technocratic and omniscient, it may not be so surprising.

Put $1 worth of sugar on the ground and you’ll attract plenty of ants and roaches. But $700 billion?!?!?