From Karl Smith by way of Noah Smith
While you don’t want to get trapped into people thinking that cyclical concerns are liberal concerns … I don’t think it actually helps to offer middle ground.
The problem is that too much of the debate is manufactured. That is, it is debate for debate’s sake. There is no underlying reasoning going on. So, if you move the debate towards a compromise the parameters will simply change because people want to continue having some form of a debate.
This is the fundamental question facing political economy, isn’t it?
And I think you’re wrong.
The inter-temporal or “Long Run” impact of monetary and fiscal policy does in fact exacerbate booms and busts, misallocate human capital, and destroy incentives necessary for the maintenance of the polity precisely because it serves the interests of the left(short) right(long) divide . You argue that ‘there will be problems either way’, but you can’t support that argument, and you deny the existence of the opposing argument. The opposition (conservative political economy in contrast to liberal monetary economy) disagrees. Because conservatives are rightly concerned with the maintenance of unique western norms.
Monetary policy can be used constantly. Fiscal policy can be used in the short term. But they are both dependent upon the use of Trade, Industrial, Education and Social policy, which express the remainder of the temporal spectrum. Monetary and Fiscal policy are BOUNDED BY the longer term constraints, aren’t’ they?
Surely you wouldn’t make the argument that trade, industrial, education and social policy are irrelevant? So if they are relevant, then why so? Surely you wouldn’t make the argument that we could simply ‘print’ money without consequences. WHy not embrace MMT or ‘Social Credit’ then? Would you argue that inflation was the only consequence? But not fragility? Isn’t that Greece’s problem?
How do we coordinate policy across the “production cycle” of an economy? We can’t. Because we have no institutional means of coordinating this inter temporal production cycle as we do with interest rates to coordinate production in the private sector. Or are you arguing that there is no production cycle present in a body politic? If so, then why does education policy matter? Why is social policy meaningful other than as a means of emotional self-gratification?
You’re wrong. It is a left right divide.
It’s a left right divide because the short and the long term are tools of the left and right. While it may not be a THEORETICAL NECESSITY that these tools be biased left and right, it is a PRACTICAL NECESSITY that these tools are biased left and right, because we lack the institutions to prevent inter temporal transfer in government the way that we have institutions for the construction of inter temporal cooperation in the private sector, and therefore these tools are in fact tools of left and right.
It surprises me how the left cannot grasp this, but then, the left is by definition a short term ideology. We cannot expect the color blind to see differences in hue, and we cannot expect the temporally blind to see the production cycle. And we cannot tell the difference between those who are time blind and those who are simply thieves.