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The case for bitch-slapping Saint Paul until he wets his panties: Dog whistle economics…

February 18, 2010 Leave a comment

When politicians want to say something about “those people” yet wish to remain within the bounds of civil conversation, they will often employ certain code words that allow them to express their actual position while remaining open to ambiguous interpretation. The Wiki defines the dog whistle this way:

Dog-whistle politics, also known as the use of code words, is a term for a type of political campaigning or speechmaking which employs coded language that appears to mean one thing to the general population but has a different or more specific meaning for a targeted subgroup of the audience. The term is invariably pejorative, and is used to refer both to messages with an intentional subtext, and those where the existence or intent of a secondary meaning is disputed.

In economics right now there is a dog whistle conversation being carried behind your back. The expressed subject of this conversation is whether the Federal Reserve should explicitly set a higher target for inflation and attempt to achieve this higher target as a matter of policy. The conversation is dry, technical, and purposely so, since it is designed to discourage you from joining in or even noticing it.

The conversation, however, is really about how far to go in breaking you with the threat of starvation.

We covered one side of this conversation in the post, The case for bitch-slapping Saint Paul until he wets his panties…, in which we focused on Paul Krugman’s argument that increasing the target for inflation would make it easier for Washington to collapse your wages, and increase corporate profits: You are less likely to notice the deterioration of your standard of living if your wages stay the same while the prices of everything you buy goes up. And, inflating away your income is preferable to a company-wide announcement that everybody has to take a 10 percent pay cut – except, of course, the CEO, his/her gang of bandits, and the company’s bond, and shareholders.

Read more…

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