Over at National Review Online, Jerry Bowyer shoots himself on his own macroeconomic foot. He begins reasonably enough, lauding the Prize to Ned Phelps for “his successful rebuttal of one of the central tenets of modern Keynesianism: the Phillips curve.” He ridicules Keynesian policy-makers with their “Phillips-curve perspective” because “attempts to stimulate growth and employment by way of loose money inevitably fail. …Variables such as levels of growth, capital accumulation, and flexibility in labor markets — and not artificial stimulation through the printing press — are what decide whether or not people are given an opportunity to work.” The best employment policy is “sound money and price stability”. A little fuzzy on whether we’re talking about long run or short run, but so far, so good. Then Bowyer begins firing wildly with the following complaint:

Alan Greenspan, despite his better training, basically governed the central bank as a Keynesian: Too loose in the late ’80s; too tight in the early ’90s (helping cost George H.W. Bush the election); too tight in the late ’90s in the cause of stopping “irrational exuberance”; and too loose in 2003 because he didn’t believe in the efficacy of the Bush tax cuts.

Hold on: Greenspan was too tight? If you value price stability and there's no Phillips tradeoff, isn’t any inflation rate above zero (as in the early and late 1990s) evidence of money being too loose? (That's what I'd say, as a long-run proposition.) If you think there is no Phillips tradeoff (loose money can’t reduce the unemployment rate), how could “tight” monetary policy have caused a recession? (Is the Phillips tradeoff effective only in one direction?) If his rejection of the Phillips Curve perspective applies only to the long run, then Bowyer – every bit as much as Greenspan, and despite himself – really believes in the short-run Phillips Curve.

Bowyer's perspective, which we might call "supply-side inflationism," seems to be: any period of rapid expansion is due to tax cuts and can go on indefinitely. Any period of contraction is due to tight money. I like tax cuts, too, but for long-run reasons. I don't think cyclical expansion depends on them. I dislike recessions, too, but I think the way to lessen their severity them is to avoid the unsustainable boom by pursuing consistently "tight" money.

Bowyer then gives us what can only be described as inflationist fantasies in the form of rhetorical questions:

What if Greenspan hadn’t destroyed the telecomm sector in the late ’90s with his tight-money policy? What would the cumulative effects have been of “letting the horses run”? Our thirteen trillion dollar economy would be what today — 15, 18, 20 trillion? How many people who are now poor would instead be middle class? How many people who are now middle class would be affluent? How much global poverty would have been alleviated if the U.S. economy had been even more powerful in recent decades, able to drag that much more of the globe out of the muck and into prosperity?

Moving the middle class to a permanently higher level of affluence is a real, long-run phenomenon. It requires real long-run growth, and real long-run growth derives from stuff like “capital accumulation, and flexibility in labor markets,” not at all from a monetary policy looser than Greenspan’s.