I was talking a couple of days ago with a guy I generally think of as sensible, if misguidedly right-wing on economic issues, and was surprised to learn that he has a positive attitude toward South Carolina Governor Mark Sanford, who’s a moron. Here’s Glenn Thrush reporting on Governor Sanford being ridiculous:
“What you’re doing is buying into the notion that if we just print some more money that we don’t have, send it to different states — we’ll create jobs… If that’s the case why isn’t Zimbabwe a rich place?”…”why isn’t Zimbabwe just an incredibly prosperous place. Cause they’re printing money they don’t have and sending it around to their different — I don’t know the towns in Zimbabwe but that same logic is being applied there with little effect.”
Not only is this comparison really offensive to people living in Zimbabwe and struggling with a horrible situation, far worse than the misery Sanford is trying to inflict on the population of South Carolina by refusing to extend unemployment benefits, but the ignorance on display here is really appalling. Sanford’s like a guy standing next to a burning building worrying that it might rain tomorrow. There’s no inflation right now in the United States. None whatsoever. It’s actually a big problem, because it means that our standard macroeconomic stabilization tool — federal reserve open market operations — doesn’t work. Serious inflation would be bad, of course, and Zimbabwe-style hyperinflation would be ruinous, but some increase in inflation would be helpful. It would serve as a real cut in interest rates and help to spur growth. And long before inflation reached problem levels, the Fed could increase nominal rates to head the problem off. Sanford’s just out to sea on this.