Krugman: Points of No Return

[eridani]

http://www.nytimes.com/2014/05/16/opinion/krugman-points-of-no-return.html?hp&rref=opinion&_r=1

More than five years have passed since many conservatives started warning that the Federal Reserve, by taking action to contain the financial crisis and boost the economy, was setting the stage for runaway inflation. And, to be fair, that wasn’t a crazy position to take in 2009; I could have told you it was wrong (and, in fact, I did), but you could see where it was coming from.

Over time, however, as the promised inflation kept failing to arrive, there should have come a point when the inflationistas conceded their error and moved on.

In fact, however, few did. Instead, they mostly doubled down on their predictions of doom, and some moved on to conspiracy theorizing, claiming that high inflation was already happening, but was being concealed by government officials.

Why the bad behavior? Nobody likes admitting to mistakes, and all of us — even those of us who try not to — sometimes engage in motivated reasoning, selectively citing facts to support our preconceptions.

But hard as it is to admit one’s own errors, it’s much harder to admit that your entire political movement got it badly wrong. Inflation phobia has always been closely bound up with right-wing politics; to admit that this phobia was misguided would have meant conceding that one whole side of the political divide was fundamentally off base about how the economy works. So most of the inflationistas have responded to the failure of their prediction by becoming more, not less, extreme in their dogma, which will make it even harder for them ever to admit that they, and the political movement they serve, have been wrong all along.