Protectors of Wealth, not Work, Pressing Hard on Fear-Inflation Button

Another Krugman column on the long term against-the-data cries of fear-the- inflation! crowd

…inflation obsession has persisted, year after year, even as events have refuted its supposed justifications. And this tells us that something more than bad analysis is at work. At a fundamental level, it’s political.

This is fairly obvious if you look at who the inflation obsessives are. While a few conservatives believe that the Fed should be doing more, not less, they have little if any real influence. The overall picture is that most conservatives are inflation obsessives, and nearly all inflation obsessives are conservative.

Why is this the case? In part it reflects the belief that the government should never seek to mitigate economic pain, because the private sector always knows best. Back in the 1930s, Austrian economists like Friedrich Hayek and Joseph Schumpeter inveighed against any effort to fight the depression with easy money; to do so, warned Schumpeter, would be to leave “the work of depressions undone.” Modern conservatives are generally less open about the harshness of their view, but it’s pretty much the same.

The flip side of this antigovernment attitude is the conviction that any attempt to boost the economy, whether fiscal or monetary, must produce disastrous results — Zimbabwe, here we come! And this conviction is so strong that it persists no matter how wrong it has been, year after year.

Finally, all this ties in with a predilection for acting tough and inflicting punishment whatever the economic conditions. The British journalist William Keegan once described this as “sado-monetarism,” and it’s very much alive today.

Does any of this matter? It’s true that the Fed hasn’t surrendered to the sado-monetarists. Notably, it didn’t panic in 2011, when another blip in gasoline prices briefly raised the headline rate of inflation, and Republicans began inveighing against the “debasement” of the dollar.

NY Times: Krugman and see the comments too, by and large useful contributions…

GOP: Enemy of the Poor

From Krugman:

a party committed to small government and low taxes on the rich is, more or less necessarily, a party committed to hurting, not helping, the poor.

Will this ever change? Well, Republicans weren’t always like this. In fact, all of our major antipoverty programs — Medicaid, food stamps, the earned-income tax credit — used to have bipartisan support. And maybe someday moderation will return to the G.O.P.

For now, however, Republicans are in a deep sense enemies of America’s poor. And that will remain true no matter how hard the likes of Paul Ryan and Marco Rubio try to convince us otherwise.

Food, Floods and Drought

Krugman looks at Egypt, food prices and the fast changing world climate:

We’re in the midst of a global food crisis — the second in three years. World food prices hit a record in January, driven by huge increases in the prices of wheat, corn, sugar and oils. These soaring prices have had only a modest effect on U.S. inflation, which is still low by historical standards, but they’re having a brutal impact on the world’s poor, who spend much if not most of their income on basic foodstuffs…

While several factors have contributed to soaring food prices, what really stands out is the extent to which severe weather events have disrupted agricultural production. And these severe weather events are exactly the kind of thing we’d expect to see as rising concentrations of greenhouse gases change our climate — which means that the current food price surge may be just the beginning.

The question then becomes, what’s behind all this extreme weather?

To some extent we’re seeing the results of a natural phenomenon, La Niña — a periodic event in which water in the equatorial Pacific becomes cooler than normal. And La Niña events have historically been associated with global food crises, including the crisis of 2007-8.

But that’s not the whole story. Don’t let the snow fool you: globally, 2010 was tied with 2005 for warmest year on record, even though we were at a solar minimum and La Niña was a cooling factor in the second half of the year. Temperature records were set not just in Russia but in no fewer than 19 countries, covering a fifth of the world’s land area. And both droughts and floods are natural consequences of a warming world: droughts because it’s hotter, floods because warm oceans release more water vapor.

Read all