By Joel Clement July 19 at 4:10 PM

Joel Clement was director of the Office of Policy Analysis at the U.S. Interior Department until last week. He is now a senior adviser at the department’s Office of Natural Resources Revenue.

I am not a member of the deep state. I am not big government.

I am a scientist, a policy expert, a civil servant and a worried citizen. Reluctantly, as of today, I am also a whistleblower on an administration that chooses silence over science.

Nearly seven years ago, I came to work for the Interior Department, where, among other things, I’ve helped endangered communities in Alaska prepare for and adapt to a changing climate. But on June 15, I was one of about 50 senior department employees who received letters informing us of involuntary reassignments. Citing a need to “improve talent development, mission delivery and collaboration,” the letter informed me that I was reassigned to an unrelated job in the accounting office that collects royalty checks from fossil fuel companies.

Do the dulcet tones of Jemaine Clement make this *downunder or is that too much of a stretch/insult?

Apologies, I got carried away... wall of text incoming.

@RedSky

I agree, monetary policy at low rates has very little to offer in terms of economic stimulus. Then again, the focus almost solely on monetary policy is part of the problem. Fiscal policy can have a massive impact, both directly (government purchases of goods and services) and indirectly (increase in automatic stabilizers). But for that you either need to be in control of your central bank, so that you can engage in Overt Monetary Financing ("printing" money). Or you need the blessing of the private banks, which is particularly true for a Vollgeld system.

The budget is the core of a parliamentary democracy, and to be at the whim of the folks at Deutsche Bank, HSBC or Credit Suisse -- no, thank you very much. We saw how that played out in Greece.

Anyway, the central bank can do miraculous things: if it provides funds to the democratically elected body in charge of the budget, aka parliament/the government. Trying to "motivate" the private banks to stock up on cheap reserves to stimulate lending is just a sign of ideology.

The great Michal Kalecki, in his essay The Political Aspects of Full Employment, summarized the general issue of government spending quite clearly. The industrial leaders stand in opposition to government spending aimed at full employment for three distinct reasons: a) dislike of government interference in the problem of employment as such; b) dislike of the direction of government spending (public investment and subsidizing consumption); c) dislike of the social and political changes resulting from the maintenance of full employment.

I'd say control over your currency is too great a tool to leave it in the hands of unelected managers. Clement Attlee knew very well why he had to nationalize the Bank of England in '46.

Back to the issue of inflation, I'd like to make two points. First, how big a role should inflation really play when talking policy. Second, what's the influence of a central bank on inflation.

Where does it come from, this focus on inflation. People usually talk about government spending when discussing inflation. Private spending is rarely brought up, even though it can be just as inflationary. So let's ignore private spending for a moment and talk purely government spending: should a deficit/surplus not be judged primarily by how well it helps us achieve our macroeconomic goals? Or more clearly, why should we sacrifice full employment or our general welfare on the altar of inflation? Yes, that's over the top. But so is the angst of inflation.

I'd say let's stick with Abba Lerner's concept of functional finance and judge deficits/surpluses purely by how well they help us achieve our macroeconomic goals. Besides, the US has run massive deficits during the GFC, so much in fact, that a great number of monetarists saw hyperinflation just around the corner. Still waiting for it. Same for Japan. Massive deficits... and deflation.

As long as spending, both private and government, doesn't push the economy beyond its limits (full employment, real resources, production capacity), out-of-control inflation just doesn't materialize. Plus, suppressing inflation is actually one thing central banks can do quite well. Unlike causing inflation, which both Japan and the EU are showcases off. Draghi can dance naked on the table, monetary policy (QE, mainly) won't push inflation upwards.

Which brings me to the second point: what's inflation, what's the cause of inflation, how can central banks manipulate it.

CPI is often used as a measure of inflation, but I prefer the GDP deflator. CPI doesn't account for externalities that you cannot influence, whatever you do. Prime case: the price of oil. Monetary policy of the Bank of Sweden has no influence on the price of oil. The GDP inflator, however, accounts for every economic activity within your currency zone -- much more useful.

General theory says, this measure of inflation goes up when demand surpasses supply. And vice versa. The primary factor of demand is domestic purchasing power, therefore wages. If you suppress wages, you suppress inflation. If you push wages, you push inflation. More specifically, you can see a direct correlation between unit labour costs and the GDP deflator in every country at any time. Here's a general graph for multiple countries, and the St. Louis FED provides a beauty for the US.

That's why it's easy for central banks to combat inflation, but almost impossible to fight deflation.

Pretty sure the voice is Jemaine Clement doing his "Bowie's in Space"....

https://www.youtube.com/watch?v=g8f_XCH3zmM

He sounds just like Jemaine Clement in his Men in Black 3 role.

The faux documentary thing has kinda been done to death now, but Jemaine Clement and Taika Waititi are both really funny, so this could be good.

5 more comments have been lost in the ether at this killed duplicate.

Clement was awesome on "Just a Minute". Unbeatable for that show.

Your video, Sir Clement Freud tells a hilarious drinking joke..., has made it into the Top 15 New Videos listing. Congratulations on your achievement. For your contribution you have been awarded 1 Power Point.

http://www.cbc.ca/canada/story/2011/02/03/crtc-internet-clement.html

Move along everyone, nothing left to see here.

If you've never heard of Kenneth Williams can I recommend you look for some of the old "Just a Minute" radio shows? It's a British panel comedy game where contestants have to speak for 1 minute on a topic without repetition, hesitation, or deviation. Kenneth was a regular guest for many years, and was fucking hilarious. Clement Freud (grandson of the grand-douchebag of psychoanalysis himself) was also brilliant. Really fun stuff.

http://www.djmick.co.uk/girls/jessica-jane-clement-lynx-rise-lingerie-pictures/

@Throbbin. Also Tony Clement "saving" that woman from "drowning" two days ago.

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