An economic cult
by Tom Sullivan
Paul Krugman this morning writes about “the inflation cult,” doomsaying pundits and supposed economic experts who, economic rain or shine, predict that a steep rise in inflation is coming anytime now and, quite reliably, get it wrong time after time.
Part of that appeal is clearly political; there’s a reason why Mr. Santelli yells about both inflation and how President Obama is giving money away to “losers,” why Mr. Ryan warns about both a debased currency and a government that redistributes from “makers” to “takers.” Inflation cultists almost always link the Fed’s policies to complaints about government spending. They’re completely wrong about the details — no, the Fed isn’t printing money to cover the budget deficit — but it’s true that governments whose debt is denominated in a currency they can issue have more fiscal flexibility, and hence more ability to maintain aid to those in need, than governments that don’t.
And anger against “takers” — anger that is very much tied up with ethnic and cultural divisions — runs deep. Many people, therefore, feel an affinity with those who rant about looming inflation; Mr. Santelli is their kind of guy. In an important sense, I’d argue, the persistence of the inflation cult is an example of the “affinity fraud” crucial to many swindles, in which investors trust a con man because he seems to be part of their tribe. In this case, the con men may be conning themselves as well as their followers, but that hardly matters.
This tribal interpretation of the inflation cult helps explain the sheer rage you encounter when pointing out that the promised hyperinflation is nowhere to be seen. It’s comparable to the reaction you get when pointing out that Obamacare seems to be working, and probably has the same roots.
Not just economists, but the country (and perhaps the entire Republican Party) seems to be in the grip of an economic cult concerned with much more than inflation — that’s just a symptom. As Krugman suggests, ethnic and cultural (and class) divisions factor into it. Digby has written repeatedly (and just yesterday) that many of the same people “have always been wrong about everything.” And yet, their followers keep listening. Conservatism never fails. It is unfalsifiable. I wrote last week that the Koch brothers’ evangelism for the their libertarian Kochification Church resembles recruiting techniques used by cults.
Hey, let’s start a meme.