Daniel Kuehn writes:
We have the confidence fairy. We need to start talking more about the "expectations fairy" in reference to market monetarists like Scott Sumner. Of course in the best of all possible worlds the expectations channel works great and we can talk about monetary policy with confidence even with a non-existent interest rate channel. But we don't live in that world and we can advocate monetary policy while still having reservations about its effectiveness. Sumner seems to interpret that as opposition. So let's talk more about the "expectations fairy".
Another way to say it is this: Krugman noted that what the central bank needs is to make a credible commitment to being irresponsible. There are legitimate questions about whether it is capable of credibly committing to being irresponsible.
Nobody questions whether Congress is capable of credibly committing to being irresponsible. It's practically a prerequisite for the job.