"In this sense, I believe, we ought as economists think much more about the political significance of institutions which place a restraint on monetary policy and can shelter governments against political pressure, than about the ideal correctness of the policy which might be conducted. Central banks and ministers of finance will never be able to implement what the economist would regard as the wise policy. They will always have to act under political pressure, and all we can hope to do is to protect them against this political pressure as well as possible." - Hayek, "The Campagain Against Keynesian Inflation", p. 215.
No one, I hope, would ever accuse me of not thinking about institutions that would restrain monetary policy, nor not thinking more about them than "ideal policies." Reading Hayek also suggests that monetary policy makers are unlikely to lash themselves to the mast, which I believe is the flaw in Pete's position in our ongoing argument. Put differently: If we really endogenize the political process, why would we ever expect central bankers to freeze the monetary base, and therefore what point is there in telling them they should? If doing so requires somehow making institutional changes that overcome political self-interest, then go all the way and argue for free banking. If Pete thinks Bernanke can somehow overcome the various temptations without such institutional change and really freeze the base, then why can't he overcome those temptations and try to target nominal GDP in some form?
In any case, Pete can't have it both ways. If he really thinks the central bank can be convinced to freeze the base without fundamental institutional change that overrides political incentives, then why stop there? And if he thinks they are able to ignore political incentives and freeze the base, then why can't they ignore political incentives and target MV / nominal GDP? If neither some sort of MV/nominal GDP target nor freezing the base/money supply is compatible with political incentives, then Pete and I have played to a draw, it seems.
Note: I'm ignoring any differential knowledge problems that might arise in freezing the base vs. a nominal GDP target only because that's not the ground Pete's been playing on. His argument has been predominantly a public choice one from the start, as I read it. In any case, that's Hayek's point, so that might count that quote as evidence in favor of the argument I make above.