The Money Cranks Are Loose

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Martin Wolf Comes to Adair Turner's Aid

There must be a nest in the UK somewhere – apparently the country is a breeding ground for monetary cranks. The FT's Martin Wolf – who is best known for such glorious epiphanies as “Why it is right for central banks to keep printing” and “Time to think the unthinkable and start printing again” (which was published about 15 months after the first article, so clearly nothing about it was ever 'unthinkable' to Mr. Wolf) - has just penned an article in support of the ideas recently uttered by Lord Adair Turner.

That sure didn't take long – apparently Wolf was deeply disturbed by some people expressing the view that financing government spending directly via the printing press may not be such a good idea after all. But of course it is! Wolf's latest missive is entitled “The Case for Helicopter Money” and continues basically where his previous flashes of inspiration on the topic left off. There is evidently no case for hoary inflationism that doesn't meet with Mr. Wolf's full-throated approval.

In this particular screed his penchant for the joys of central economic planning is on even starker display than usual. It also contains a major error, or rather, what is probably a quite conscious attempt to minimize the extent of monetary inflation that has taken place since the 2008 crisis, by means of employing highly questionable data and presenting them in just as questionable a manner. We'll get to that point a little further below.

Wolf writes:

“Some are sure that the troubled western economies suffer from a surfeit of money. Meanwhile, orthodox policy makers believe that the right way to revive economies is by forcing private spending back up. Almost everybody agrees that monetary financing of governments is lethal. These beliefs are all false.”

In other words, what the economy clearly needs is more spending by government bureaucrats, this time financed directly by the printing press. Anyone who believes otherwise is a priori wrong and hereby preemptively excommunicated in the introductory paragraph.

Next comes the presentation of the highly questionable data we alluded to above, preceded by Wolf invoking a well known authority – probably in the hope that this will serve to silence potential critics of what follows:

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