A Challenge to Modern Liberals Regarding their Fealty to the Principles they Espouse

[Hellestal]

@Measure_for_Measure

1a. Nominal targeting: I’m all for it, but it sounds politically difficult for the Fed to credibly commit to it. “Hyperinflation!”, opponents will say, when it becomes clear that a spell of inflation above the 2% target becomes necessary. Ironically, I suspect that a quiet adjustment to a 2.5-3.5% core inflation comfort zone would be easier.

One of the many interesting aspects of a futures market, either price level or NGDP, is that it has a decent chance to calm down the political foofaraw, too.

If people start bitching about hyperinflation, we can calmly ask them why they disagree with markets. (Or more caustically: “What are you, some kind of communist?”) Why should we trust their individual ideas more than we trust the market? The whole point of markets is to aggregate the knowledge of many different people, as people like Hayek pointed out. (That’s a flippin great essay, by the way, if you haven’t read it.)

@Human_Action

If we’re talking about raw numbers, the more casual and moderate libertarians greatly outnumber the hardcore ones. As BrainGlutton illustrated with the Pew Typology, the basics of libertarian thought do have some traction with a decent group of people, but it’s not the people that supported Ron Paul and vote capital-L Liberatarian. It’s Republicans who have no interest in oppressing gays and immigrants, or using the Bible as a roadmap for policy, but are disturbed by leftist ideas of wealth redistribution, overly burdensome regulation, and threatening a civil right (firearms ownership). They are an unhappy, underserved group: I have to hold my nose to vote Republican, as the majority of their platform is repellant, and their supposedly small-government outlook never seems to actually result in small government.

So, given all that, the ability of the hardcore to stain the “brand” isn’t all that meaningful, IMHO, because the “brand” only matters to the hardcore people.

You make an interesting argument. I’m not sure I agree with you yet, though.

The analogy that comes immediately to mind is the “I’m not a feminist, but…” comments that some feminists complain about at length.

The issue isn’t just the attitude of those inside the group. It’s also, I believe, about persuading people outside the group. The “brand” isn’t important because of what it says about the thoughts of the people who accept the label. It’s important because of what it communicates to people outside the group.

If someone knows very little about the manifold internal differences among people who call themselves “libertarian”, then what idea/what image/what emotional response will pop into their minds when they hear the word? Will they think of someone like you, or someone like jayarod7? My first instinctive thought always turns to the extremes. Psychology doesn’t have to be fair. When Katy Perry says “I am not a feminist, but I do believe in the strength of women”, it causes a lot of people to grind their teeth. But why did Perry say that? It wasn’t about dictionary definitions. That’s not the issue. It was about the brand itself. She didn’t want to associate herself with that word, even if she’s fine associating herself with the ideas. I’m not sure how carefully she, and others like her, thought through these issues. She’s most likely working from instinct. But that doesn’t automatically mean her instinct is wrong in rejecting the label.

It’s possible, for people who care deeply about these issues, that they might have a better chance of persuading people by avoiding a skunked brand.

I’m not married to this idea, but it seems plausible to me.

@Human_Action

If libertarianism has a future as an ideology that influences public policy, it will be by influencing one of the major parties from within, probably the Republicans when enough of their arch-religious, intolerant base has died off to force them to re-brand. It won’t be the Libertarian Party, and the word “libertarian” needn’t even be mentioned. Just a base of voters who support primary candidates who promise (and deliver!) more limited government and protection for the rights of all, instead of trying to ban abortion and block SSM. If it happens, it’ll be a quiet, slow shift, not a noisy revolution. The hardcore Libs can come along for the ride, but they won’t be driving, they simply don’t have the numbers.

Well, you could be right about that. I’ll have to think about it more.

@WillFarnaby

Hellestal claims that:

But in order for deflation to “ruin” an economy under the conditions he stipulates, he would have to provide some theory to back up *why *it does so.

I actually did outline the beginnings of a theory in Post 300 (one sentence).

@WillFarnaby

Otherwise, he has not proved causation, but simply asserted it.

It’s completely true that I haven’t proven anything, nor will I in this thread.

[Human_Action]

@Hellestal

You make an interesting argument. I’m not sure I agree with you yet, though.

The analogy that comes immediately to mind is the “I’m not a feminist, but…” comments that some feminists complain about at length.

The issue isn’t just the attitude of those inside the group. It’s also, I believe, about persuading people outside the group. The “brand” isn’t important because of what it says about the thoughts of the people who accept the label. It’s important because of what it communicates to people outside the group.

If someone knows very little about the manifold internal differences among people who call themselves “libertarian”, then what idea/what image/what emotional response will pop into their minds when they hear the word? Will they think of someone like you, or someone like jayarod7? My first instinctive thought always turns to the extremes. Psychology doesn’t have to be fair. When Katy Perry says “I am not a feminist, but I do believe in the strength of women”, it causes a lot of people to grind their teeth. But why did Perry say that? It wasn’t about dictionary definitions. That’s not the issue. It was about the brand itself. She didn’t want to associate herself with that word, even if she’s fine associating herself with the ideas. I’m not sure how carefully she, and others like her, thought through these issues. She’s most likely working from instinct. But that doesn’t automatically mean her instinct is wrong in rejecting the label.

It’s possible, for people who care deeply about these issues, that they might have a better chance of persuading people by avoiding a skunked brand.

I’m not married to this idea, but it seems plausible to me.

That’s a very apt analogy, actually, kudos. And it illustrates two points pretty clearly:

1. An ideological “brand” can indeed become tainted by excess association with the ideology’s radical fringe.

2. This taint doesn’t preclude the moderate ideas of the “brand” becoming mainstream. Women with feminist beliefs might shy away from the word “feminist”, but feminism is the mainstream. The ideas won out, even if the label didn’t. And in that case, just like with libertarianism, it’s the moderate ideas that dominate, while the fringe is somewhere between mocked and ignored (often excessively).

So given that, the question is: does the “skunked” brand hurt or help? The obvious answer is “hurt”, but thinking about it, that might not always be the case. If the out-group is hostile to the radical ideas they associate with the "brand’, then the in-group’s ability to distance themselves from it (“I am not a feminist, but I do believe in the strength of women” = “I am not a libertarian, but I do believe in limited government”) can signify their safe, palatable, moderation. It can redirect antagonism away from the moderate ideas to the fringe ones. People who complain about feminism surely are picturing some angry Catharine MacKinnon type, shouting that all sex is rape*, not a third-wave feminist forging her own ideas of what it means to be a woman. The fringe might serve as a “forlorn hope” for the moderates, drawing criticism and allowing the moderates to contrast themselves with the fringe to underline their appeal.

• I know she never said that.

@Hellestal

Well, you could be right about that. I’ll have to think about it more.

It’s an effect of our winner-take-all political system, we’ll have two parties unless the system changes, but those parties will shift as needed to grab about half of the electorate due to the primary system and skillful use of wedge issues.

[Measure_for_Measure]

@WillFarnaby

Perhaps he could provide empirical evidence of a deflation, accompanied by negative NGDP growth, ruining an economy. Then we could take a closer look at whether or not the deflation was a result or cause of a downturn.

Just to make a logical point, imagine a burning building. A fireman recommends that the fire doors -which connect different parts of the building- be shut. Now did open fire doors cause the building to go up in flames? No, a match did that. But open fire doors could certainly make the situation worse.

Or think about a ship struck by a torpedo. Water rushes into the hole. Rushing water is an effect of being struck by a torpedo and a cause of a sinking ship.
Anyway, consulting the Macroeconomics textbook by Gregory Mankiw, formerly of the CEA under GW Bush, I see the following:
[QUOTE=Gregory Mankiw]
From 1929 to 1933 the price level fell 25 percent. Many economists blame this deflation for the severity of the Great Depression. They argue that deflation may have turned what in 1931 was a typical economic downturn into an unprecedented period of high unemployment and depressed income.
[/QUOTE]
Now personally, I’d emphasize bank failures when trying to explain the depth of the Great Depression, combined with ignorance of textbook economics (they had not been written yet). But the effects of deflation are worth study: Mankiw has a section on the stabilizing influences of deflation and a section on the destabilizing influences. Search inside this book, starting with the index!

[PhillyGuy]

@Bryan_Ekers

Nevertheless, are there any countries who currently use a gold standard?

Wikipedia to the rescue:

Gold reserve

So, the answer is: No nation comes anywhere close to having enough gold to back their currency, but the US government may be the least far away from it.

• If there are not, why not?

Isn’t it obvious? Those pointy-headed Ivy League economists run the world! :smack:

Seriously, central banking is now a given. Macro-economic research looks at which central bank interventions work well, and which do not. Because of this research (and because central bankers are somewhat isolated from political pressure), central banking improves. Pro-gold classical economists, like, say, David Ricardo, do not.

Re the great performance of the US economy in the nineteenth century, it was starting off from a low level. When your people are living in such desperate poverty, you can continue to grow even when conditions are poor (as seen during the current period of economic stagnation, during which China, India, and much of Africa continue economic growth). Relative poverty is why the US could do relatively well during the Great Depression of 1873-96, which was much more disastrous for Great Britain. We are now in Britain’s position. And I don’t want to go through a 21st century depression without a Ben Bernake.

Recommended reading on current economic crisis:

After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead:...