This morning I found an odd sort of synergy among a cluster of posts in the econblogosphere. Arnold Kling notes an interesting claim in Bill Keller’s recent NYT editorial:
“Nobody who is taken seriously as an economist is going to say ‘cancel the Fed,’ ” said Glenn Hubbard, the dean of Columbia Business School, chairman of the Council of Economic Advisers under George W. Bush, and now Mitt Romney’s chief economic adviser. “I find it very disturbing that the media is giving equal time to some ideas that are just crazy.”
Meanwhile, Robin Wells, Paul Krugman’s wife, makes a case for taking demands of OWS protesters seriously:
On Nov. 2nd, a group of students in Harvard University Ec10, the introductory economics class taught by Greg Mankiw, staged a walk-out. In an open letter, the students lambasted Greg’s course and his textbook for “espous[ing] a specific – and limited – view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today…..There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory.”
I am sure that many of us who have taught introductory economics or who have written an intro economics textbook (a much smaller subset, and I fall into both) felt a pang of sympathy for Greg when we heard about the walk-out. If you have ever faced a large lecture hall of restive intro econ students, or coped with a voluble student with an ax to grind, you can feel some solidarity: we are Greg Mankiw too.
But just how far should that sympathy extend? Is Mankiw simply the target of fuzzy-minded youth who are more intent on making a statement than engaging in reasoned inquiry? Or, is Mankiw – and much of the profession, for that matter – getting a needed reality check about the need to re-orient the way we teach economics?
However, Eric Falkenstein points out that one of the demands of OWS protesters is ending the Fed (to replace it with a fully nationalized and public institution).
A rush of questions come to mind:
- Is Robin Wells crazy?
- Does Bill Keller think that Robin Wells is crazy?
- Does Robin Wells believe that the protesters’ demands with respect to microeconomics have merit while their views on macroeconomics don’t?
- How could we make that determination?
- Are Glenn Hubbard and Bill Keller right? Is wanting to end the Fed unworthy of serious discussion?
and another series of questions on the Federal Reserve:
- Should we end the Fed?
- Should the Fed be replaced by a fully public institution?
- Abolished entirely?
- Maintain its current structure but be required to make its proceedings public?
- Be required to maintain a rules-based regime (a la John Taylor)?
For the record in answer to the question that titles this post I emphatically do not believe that Robin Wells is crazy. I also think that Bill Keller is mistaken about the Fed: abolishing it or changing its structure or operations drastically are subjects worthy of discussion including by serious economists. As to whether or how its structure or operations should be changed I’m uncertain. I definitely find a rules-based regime very appealing but I also think you’d need rules about when, how, and how often you change the rules. I also like the idea of openness but I’m not sure to what degree that would impede the Fed’s effectiveness.
With respect to the OWS movement, I think that it’s ironic, tragic even, that it’s lurching dangerously near becoming a movement about the right to camp indefinitely and without let in municipal parks.