Krugman’s Blog, 2/17/13

Just one post yesterday, “Stanley and the Crazies:”

Dylan Matthews has an interesting piece suggesting that Stan Fischer might become our next Fed chairman. Fischer would indeed be highly qualified (as would Janet Yellen or Christy Romer, to name two other obvious candidates). But Matthews also suggests that Fischer might have a leg up in the confirmation process, because he has been a highly successful governor of the Bank of Israel who worked well with Netanyahu.

I think this is fantasizing; Matthews is failing to face up to the deep monetary craziness of the modern GOP.

You have to bear in mind that the party’s intellectual leaders are people who have spent the past four years expecting hyperinflation any day now. Two years ago they lectured Ben Bernanke on how terrible it is to “debase” your currency. And of course the utter failure of their predictions hasn’t changed their minds a bit.

So here comes Stan Fischer, who says

I still think Keynesian economics is extremely important, and if anybody didn’t think so, this crisis should have made them rethink.

which is actually a double insult — both praise for Keynes and the suggestion that one should rethink one’s views in the face of experience, which are both anathema to the Ryanoids.

And as head of the Bank of Israel, his signature achievement was a large debasement — sorry, depreciation — of the currency, which insulated the nation from the crisis and was achieved through huge purchases of foreign exchange:

This is actually a form of quantitative easing (as well as a bit of currency war); it’s exactly the kind of thing the GOP goes wild about when Bernanke does it.

But doesn’t Fischer’s success play a role? Hey, that’s evidence-based thinking, which is part of what they’re fighting.

I guess my point is that Obama should go for someone good — Stan, Janet, Christy, or someone else to be named — and not even try to appease the crazies.

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