See just when I'm thinking maybe he's on to something he says something like this: in a very short post he wrote "What Might Prevent a Return to Healthy Growth?" listen to what he says:
"It’s good to hear that Bernanke thinks the problem is demand side, not structural. Oddly, I actually think it’s more structural than he does. If we stay at 99 week maximum UI benefits, I’d expected the natural rate to be in the 6% to 7% range, especially if the minimum wage rate stays this high."
Yeah $7.25 is awfully high. Let alone the fact that most jobs that pay minimum wage are in the service sector and few new hires will hope to get even 30 hours a week. Typically, when you get a job in the service sector-I am speaking from experience-management considers 15 hours a week to be a pretty generous load. And yes they will rather higher 20 people for 10 hours a week, then fewer for more hours. Just the usual perversity of incentives-or "mismatch." The fact that even with a 20 hour week(if you get that starting out in a service job they like you)-which leads to $144.50 before taxes is according to Sumners too much of a burden on Domino's Pizza or the Gap I find rather "enigmatic". Of course I guess you can understand the idea that unemployment benefits "crowd out low wage jobs" as it would not take much to crowd at a 10 hour a week job at $7.25 an hour. If you work five days a week 3 hours a day it would be perfect. By working five days a week you are no longer eligible for unemployment yet you will be taking home under $100 a week after taxes, likely less than your current unemployment benefits.
I like the sound of NGDP targeting, and that liberals like Krugman, Yglesias, and Delong have given it their blessing has been enough for me to not worry too much that somehow a Right wing economist like Sumners has some nefarious ulterior motive in this that due to its cleerness has liberals fooled. If you have to choose between Krugman's liquidity trap and Sumners' NGDP targeting you at least want to agree with Sumners-doing something is for the most part always preferable to doing nothing-though this is why I am not a conservative; my definition of conservatism: settling for less, under the assumption that at some later, unspecified time-Keynes' long run-this will bring you more.
Also the fact that Sumners has emphasized less that he, like Armey once said of raising the minimum wage back in the 90s when it was only $3.85 an hour, 'opposes fiscal stimulus with even fiber of his being' than the idea that it won't be as effective as monetary stimulus made hims seem like a guy you can trust-ok he's a conservative but he's not a fanatic, is how I took it.. He even has at times at least offered that he can't rule out that a fiscal stimulus would be beneficial just that its unlikely to be as much as monetary stimulus-though he did throw in the canard that with monetary policy we can avoid deficits and the threat of higher borrowing costs-right now the U.S. has zero danger of a rise in borrowing costs. To the contrary, with the costs of the Eurozone thanks to Greece and Italy going through the roof our credit standing is about as robust as any country's has been in the history of economies. Seems to me this is actually the time the U.S. government should be borrowing-creditors are willing to pay us to hold on to our debt.