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Monday, April 07, 2014

Komment on Krugman on Kapital

Krugman suspects that super rich class interest has something to do with fear of inflation. I comment I am very sympathetic to inflation phobia phobia. I didn't get the big fuss in the 70s (OK I wasn't managing a budget -- for most of them I lived with mom and dad and 78-9 in college dorms). But there are other explanations of the pattern. 1. Open letters and such are signed by people in the same social network -- They get their friends to sign. People sign proclamations and petitions by their natural allies on the I'll sign yours today if you sign mine tomorrow principle. A better source of data would be say the U Chicago survey of prominent economists. 2. Republicans are against expansionary policy when Democrats are in the White House. They had no problem with fiscal stimulus in 2008. I recall Reganauts bashing Volcker in 81-2 (Volcker -- a Democrat hmm). 3. The 70s weren't especially horrible, but, in the 20th century, they are unique (except for 37-8) because the economy did badly with a Democrat in the White House. It wouldn't make sense to look to the source of income of the 0.1% to find why Carter is considered by Republicans to be a particularly bad President. Most recent Presidents who were much worse are Republicans (the exception may be Johnson with Vietnam but in that he was acting like a Republican). There are clear partisan reasons to advocate tight monetary policy now and to portray the 70s as worse than '81-2 or '08-now. I don't think it is proven that the partisan gap is principally based on class interests.

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