The Corner

Money Isn’t Everything

Danny Vinik and Paul Krugman both spin elaborate (and somewhat conflicting) theories out of the absence of a discussion of monetary policy from the recent book Room to Grow. The book has also been criticized from points left and right for not discussing climate change, immigration, and corporate tax rates. I think my fellow contributors tackled quite a few topics in 120 pages, myself, but I suppose I’d rather be criticized for what’s not in the book than for what’s in it.

Two of the people involved in the project, James Pethokoukis and me, have been pretty vocal in taking a different view of monetary policy than most Republicans do. I won’t speak for Pethokoukis, but I will say why I didn’t think it was important for the book to address monetary issues. The book is trying to envision an agenda that, for the most part, would result in real action only after 2016. I have no idea what our monetary circumstances will be then. I have much less of a sense of that than I do that, for example, the problem of the long-term unemployed that Michael Strain’s chapter addresses will persist. And I suspect that the monetary issue that has most concerned me for the last several years—the need to increase nominal spending—will be less important by that point. It gets less important each month.

Even if the book didn’t have this time-frame in mind, I wouldn’t have wanted extended advocacy of an “activist monetary policy to assure full employment,” because I don’t favor a more activist policy. I favor a less activist, and more rule-bound, policy than the Fed has in fact pursued. And I’m pretty sure that on that point I do speak for the other “neomonetarists” Krugman has in mind, but whose views he characteristically misstates.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.


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