I don't know why Paul Krugman is tweeting about Marvin Goodfriend's stalled Federal Reserve nomination again, but his main point is worth highlighting: Rand Paul's opposition to Goodfriend is not a bad thing for the country in itself But it is a very bad thing as a sign of the craziness of the Republicans because of the reasons that Rand Paul objects: Paul Krugman: Characteristic: "[Marvin] Goodfriend['s Federal Reserve nomination] is in trouble, not for constantly predicting inflation that never materialized, but because of what he got right: acknowledging that the zero lower bound on interest rates can be a problem...
...Just as a reminder: we went through many years of high unemployment and low inflation, which should have led the Fed to cut rates—but it couldn't. But even admitting that this is a problem disqualifies you in the eyes of the right...
There is no reason to think Marvin Goodfriend would make a good Governor of the Federal Reserve. As Binyamin Applebaum described his confirmation hearing, he "declined to explain his thinking... [why he] criticized the Fed’s stimulus campaign as likely to generate inflation rather than economic revival.... [said in 2012] it was 'really doubtful' the Fed could reduce unemployment, which was then hovering above 8 percent, to 7 percent... [without] "rising inflation... disastrous for the economy.” Someone who will not explain their thinking does not have the temperament to be a good Federal Reserve Governor. Someone who thought in 2012 that the natural rate of unemployment was 8% does not have the knowledge about the economy to be a Federal Reserve Governor.
#shouldread
#monetarypolicy
