Joe Gagnon Says Print Big Money Until the Patient Recovers

Former Fed official Joe Gagnon has a posting that is making the rounds.  Basically he says stop futzing around and start printing dough like mad until all is right with the world.  Currency devaluation will help exports (except if everybody else does it too).  It reduces the value of existing debt.  Lowers your cholesterol.

He tops it off by showing that he still believes in the Philips curve despite its spectacular failure in the 1970s:

Inflation will never increase to a significant extent as long as unemployment lingers at this elevated level.

See, the key is that magic fairies transmute monetary inflation into employment and growth, according to the Philips curve and its dressed-up successor the imaginary NAIRU.

Risk of too much inflation?  Bah, we can quit anytime:

[...] the Federal Reserve could assuage the fears of the inflation hawks by stating clearly that its policy would be rapidly reversed in the unlikely event that core inflation rises above 3 percent on a sustained basis 

I'm sure everyone will believe the Fed at its word.  Massive money printing.  What could go wrong?  It's worked great historically, right?