Rick Perry and “Almost Treason”

Lots of chatter about Rick Perry.  At the time of posting, Intrade has him at a 40% chance of winning the Republican nomination, compared to only 28% for Romney and 7% for Bachmann.  That translates into a 19% chance of him becoming your next president.

There may be some things to like about Perry, but this post from Matt Yglesias highlights not just a gaffe, but a laying bare of the Republican’s “kill the economy to kill Obama” strategy:

If this guy [Bernanke] prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.

So he opposes further monetary expansion, not because he thinks it will be economically destructive, but because he thinks it will be economically beneficial, and as such would help Pres. Obama’s reelection chances.  Therefore to avoid having an impact on the election (i.e. “playing politics”), he wants Bernanke to do things to damage the economy.  Short-term pain for long-term gain.  The gain here being getting a Republican in the White House.

Wow.  This reminds of the book I just finished reading.  Lots of short-term pain there, but oh, the long-term gain!

Update: Scott Sumner reacts to this soundbite by calling Rick Perry “truly evil“.

Are Sticky Wages Still the Problem

From Tyler Cowen:

One simple view is that Keynesian economics holds true in the short run — it explains a lot of layoffs — but it doesn’t explain longer-run unemployment, precisely because wages are sticky only for a while.  That’s what most neo-Keynesian models imply and for the most part those are good (but not perfect) models.  What we’re seeing is a previously rejected form of Keynesianism, applied across increasingly long and increasingly implausible time frames — suddenly pretending to be the mainstream view.  It’s not and has not been for a long time.

In other words, Keynesianism is morphing into a theory of the long run.

He calls the sticky nominal wage theory “an embarrassment — when it comes to the unemployed across the longer run (but not the employed)” and then offers this provocative sentence:

A lot of people don’t like hypotheses which suggest the unemployed are not victims of the system, so it doesn’t get much of a hearing.