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the politics of Baker's remarks stems from a historical jealousy for FDR being able to sell a weaker dollar as a popular public policy, whereas it is anathema as a contemporary platform. but if you observe FDR's phrasingquote:The Administration has the definite objective of raising commodity prices to such an extent that those who have borrowed money will, on the average, be able to repay that money in the same kind of dollar which they borrowed. We do not seek to let them get such a cheap dollar that they will be able to pay bock a great deal less than they borrowed. In other words, we seek to correct a wrong and not to create another wrong in the opposite direction. That is why powers are being given to the Administration to provide, if necessary, for an enlargement of credit, in order to correct the existing wrong. These powers will be used when, as, and if it may be necessary to accomplish the purpose. then you must first have a populist platform that sees itself as primarily selling commodities (as farmers) rather than consuming them. That's no longer the case, nor is it going to be the case again. short of wage-level instead of price-level targeting (which I think Scott Sumner has proposed), a weak currency is a hard political sell, even if an SVAR says it favours the bottom and middle class
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Jul 28, 2015 06:30
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| # ¿ Apr 29, 2024 15:58 |
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