Adeimantos: Did Glaukon make it back from Jackson Hole yet?
Thrasymakhos: Yes, but his contribution was overshadowed by that of IMF honcho Christine Lagarde.
Adeimantos: I heard about that. She really took a left-wing fringe position, didn't she?
Thrasymahkhos: Calling for highly-leveraged banks to be adequately capitalized is a left-wing fringe position these days?
Adeimantos: It seems to be. The response from the Great and Good of Europe was that she did not understand the difference between "illiqudity" and "insolvency"--that the banks are not undercapitalized but merely illiquid.
Thrasymakhos: And if nobody doubts their solvency the reason the banks are illiquid is…?
Adeimantos: I agree. She is not the one who was confused. And, meanwhile, Charles Evans of the Federal Reserve Bank of Chicago calls for faster growth of nominal demand.
Thrasymakhos: Now that is a left-wing fringe position!
Adeimantos: So to require that nominal GDP follow a stable and predictable track is now part of left-wing beyond-the-pale radicalism these days?
Thrasymakhos: Touché…
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