The Change We Need

Here’s Joe Gagnon on what the Fed could and should be doing to boost the national economy. I don’t share 100 percent of Gagnon’s confidence that this would work, but even if it didn’t work the downside risk is essentially zero. If it somehow “worked too well” and the price level became unduly elevated, you could just turn around in the other direction.

And here’s Scott Sumner with much the same points. Paul Krugman has more.

It’s very disappointing to me that we’re not hearing more about this from politicians and political pressure groups. Every progressive organization and politician I’m aware of is currently focused on the need for jobs. But virtually none of them are focused on these kinds of measures even though they provide the most practical path forward given the gridlock of the legislature and the fact that the monetary authorities “move last” in the fiscal-monetary dance anyway.