Krugman explains the Austrians.

[rgbecker]

http://www.nytimes.com/2011/12/16/opinion/gop-monetary-madness.html?_r=1&partner=rssnyt&emc=rss

[banned from Kos]

1. Thanks. A great primer that should be required reading for any seduced by the anti-Fed goldbug

Austrian nutcases who flap their gums about "hyperinflation" like they actually have studied macro economics.

Ron Paul is dangerously naive. Krugman is right again.

[dkf]

2. Why doesnt this work for the ECB then?

[banned from Kos]

4. not sure what you mean. Our Fed is far more Keynesian/accomodative than the ECB.

(.25% on the funds rate vs 1.5%). The ECB does not have an employment mandate is probably why. And I suspect that the PIGS are perceived as fiscal nightmares that easing won't help anyway.

Plus - the Fed buys Treasuries and US bonds. Would the ECB buy Greek or Italian bonds? Not likely. And buying German bonds is unnecessary. Central banks don't buy junk very often (Maiden Lane excepted)

[Ruby the Liberal]

3. Excellent read from Dr K

...you might think that having been so completely off-base about something so central to their belief system would have caused the Austrians to lose popularity, even within the G.O.P

It hasn't lost popularity because no one has been able to explain its failure where it can fit on a bumper sticker. If you don't have that soundbyte at the ready, be prepared for the masses to go along with the guy who can champion his cause in 4 words or less.