Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Tuesday, June 06, 2006

Not Quite the Stupidest Man Alive...

A correspondent reminds me that it is past time to lay down another marker on the internet that Donald Luskin really has no clue what he is talking about. However, we can no longer call him the Stupidest Man Alive--that crown has been permanently taken by John Derbyshire.

Fortunately, my correspondent provides an excellent example of what we are talking about:

The Conspiracy to Keep You Poor and Stupid: WE CAN NEVER SAY THIS OFTEN ENOUGH.... Inflation is not rising prices. Inflation is a declining dollar.

Ahem:

inflation - Definitions from Dictionary.com: The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

If the dollar declines against the Canadian dollar, but the prices of goods and services in dollars inside the United States remain unchanged, we do not say "there has been inflation." We say, instead, "the nominal and real exchange rates have declined." If the dollar stays constant against the Canadian dollar, but the prices of goods and services in dollars inside the United States rise, we do not say "there has been no inflation." We say, instead, "there has been inflation,a the real exchange rate has risen, and the nominal exchange rate has stayed constant."

One of the Stupidest Men Alive.

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