Yes they have their ears covered and are chanting, “I’m not listening, I’m not listening, I’m not listening…..” Waaahhh!!!

“But that’s an argument for breaking up Bretton Woods II; it’s not an argument for tighter Fed policy.”

breaking bretton woods II would have the asame effect (i.e. higher rates) as what Rogoff is saying, just said differently. Once the system of pegging breaks the implicit subsidy it provides the US on the funding side goees away.

It seems to me that Rogoff is implying that the onus of global rebalancing needs to fall on the USA in the form of higher interest rates. Heaven forbid the dollar peggers should abandon their peg. I think we need low interest rates, and that does not imply we keep our bloated financial sector: let it shrink. I am I confess a tad suspicious of the conservative bent Rogoff is bringing into these areas, as it seems to be correlated to a desire to punish & cleanse after market excesses. That is not the lesson we learned from the Great Depression. Interested in other views.

Here are the Krugman comments:

Ken Rogoff is one of the world’s best macroeconomists, so I take whatever he says seriously. But — you know that’s the kind of statement that is followed by a “but” — I’m having a hard time understanding his demands for a world slowdown.

Ken tells us that

"The huge spike in global commodity price inflation is prima facie evidence that the global economy is still growing too fast."

And then he calls for

"a couple of years of sub-trend growth to rebalance commodity supply and demand at trend price levels"

Um, why? Basically, the world is employing rapidly growing amounts of labor and capital, but faces limited supplies of oil and other resources. Naturally enough, the relative prices of those resources have risen — which is the way markets are supposed to work. Since when does economic analysis say that the way to deal with limited supplies of one resource is to reduce employment of other resources, so that the relative price of the limited resource returns to “trend”?

Presumably there’s some implicit argument in the background about why a sharp rise in the relative price of oil is more damaging than leaving labor and capital underemployed. But that argument isn’t there in Ken’s recent pieces. Model, please?

I agree that

"Dollar bloc countries have slavishly mimicked expansionary US monetary policy"

and that’s a real issue: the Fed is pursuing very loose policy to deal with a US financial crisis, and that’s inflationary in countries that are pegged to the dollar without facing our problems. But that’s an argument for breaking up Bretton Woods II; it’s not an argument for tighter Fed policy.

Since this is coming from Ken Rogoff, I assume that there’s some deeper analysis here. But I can’t infer it from the articles I’ve read. Please, sir, can I have some more?

“Though July’s figures showed a slight employment gain, the ADP Report’s recent three-month average of negative 14,000 suggests that the weakened employment situation continues,” ADP said in a press release.

The ADP employment report provides a snapshot of the private sector job market just ahead of the official payrolls report on Friday. ADP’s report doesn’t include government jobs, which in June rose by 29,000.

According to the report, gains were driven by growth in the services sector, where jobs rose by 74,000 in July. Jobs in the goods-producing sector declined 65,000 and by 49,000 in the manufacturing sector.

ADP’s reading indicates that the labor market outlook remains weak even as overall economic growth has held up despite severe headwinds from the bursting of the housing market bubble and sharp rises in food and energy prices.