Krugman’s blog, 6/28/13

There were five posts yesterday, after none the day before.  The first was “Wells, Hitler, and the World State:”

John Holbo has a fun post about the old H.G. Wells-based movie Things to Come, which embodied a vision of the future that used to be quite popular among intellectuals — that of a temporary dictatorship, not of the proletariat, but of the scientifically literate meritocracy, which would give way to liberal democracy — plus some truly terrible fashion choices — once the masses had been sufficiently educated.

Actually, you could say that something like this vision is still popular in elite circles; instead of envisioning Raymond Massey enforcing peace through air supremacy, they would have Michael Bloomberg enforcing budget discipline through bipartisan commission, but the spirit of the thing is the same. As it turns out, the second vision is proving as far off base as the first.

But surely you can’t discuss all this without referencing George Orwell’s Wells, Hitler, and the World State. It’s a short essay, and the perfect corrective to any notion that technology automatically leads to social or political progress.

The second post of the day was “Whitewater Down:”

When Barack Obama was elected, I was sure that it would be the Clinton years all over — that he would be subjected to an endless series of claims of “scandal”, creating the sense of a tainted administration even though all the alleged scandals would turn out to be either trivial or nonexistent. Remember, after all those years of front-page headlines and $70 million in public funds, the Whitewater investigation came up dry.

In fact, however, none of that happened during Obama’s first term. But would the second term be different? For a little while it looked as if the old scandal machinery was finally springing back to life, with Benghazi, the IRS, and more. You could almost hear the sigh of contentment from a certain part of the press corps.

But now it has all evaporated. Benghazi never made sense; it turns out that the IRS was targeting conservative as well as liberal groups. And as Chait says in the linked article, the NSA stuff is a policy dispute, not the kind of scandal the right wing wants.

Of course, the absence of any fire behind the smoke didn’t stop the Clinton witch hunts. But this time seems to be different. Maybe the news media have actually learned something; maybe they’re effectively disciplined, this time around, by the blogosphere. Anyway, the narrative of a scandal-ridden presidency seems to be evaporating as we speak.

So I was wrong. And I’m glad I was.

The third post yesterday, with more Irky Irksome,  was “The Truthiness Is Out There:”

OK, this is awesome. Dylan Byers at Politico gets Erick son of Erick to respond to my observation that, although he rants about the rising prices of milk and bread — which somehow has something to do with pundits riding the Acela — the truth is that milk and bread prices have been flat for about five years, and in particular have gone nowhere despite all that money the Fed has printed. And Erickson’s response is, hey, it isn’t true, but people feel that it’s true:

Not everything is academic or chartable and sometimes the accuracy of the chart isn’t as real to people as the perception they have that their grocery store bills are getting more expensive though their shopping habits haven’t changed.

Seriously, Paul’s point is correct, but it is an issue of perception of people versus the reality of his chart. He can certainly go tell people milk prices haven’t gone up, but good luck getting them to believe him.

Notice, by the way, the implication that I don’t appreciate the problems real people (who don’t eat quiche or ride the Acela) are facing; actually, I do, but those problems are lack of jobs and stagnant wages, not rising prices. And if you want to solve problems, getting the nature of those problems right matters.

But then, only elitists want to solve problems; true men of the people just vent, and what matters is perception, not truth.

Update: Josh Barro says it’s all about the derp.

The penultimate post yesterday was “Three Unsayable Words:”

Brad DeLong finds Allan Meltzer inveighing against quantitative easing, and notes that Meltzer’s story (in which it’s all Obama’s fault) is completely at odds with data on both investment and interest rates.

But there’s a larger story here. Some readers may recall that four long years ago Meltzer warned, in the direst of tones, that we faced a looming danger of inflation from expansionary Fed policy. Those of us who had studied Japanese experience, and more broadly thought through the implications of the liquidity trap, shot back that this was foolish — even if the Fed greatly expanded its balance sheet, the funds would just sit there, for example accumulating as excess bank reserves.

So here we are, with inflation low and falling despite a huge Fed expansion, and with Meltzer himself pointing out that the bulk of that expansion just sat there, largely in the form of excess reserves. In a better world, Meltzer would say the three unsayable words — “I was wrong” — and maybe even admit that the other side of the argument had something to it.

But no; his predictions didn’t go completely wrong because his analysis was wrong, it was all the Affordable Care Act, or something. And like so many people who originally raged against easy money because it would cause inflation, the failure of inflation to take off has simply led them to invent new reasons to take the same hard-money position.

And I’m trying, unsuccessfully, to think of a single prominent conservative economist who has responded to the complete failure of his predictions by changing his views. This has long since stopped being merely an analytical issue; it has become a moral issue, a test of character. And almost everyone on that side of the debate has failed.

The last post of the day was “Friday Night Music: Elephant Revival, The Pasture:”

Dango Rose directs me to a video from their upcoming album. I like this in particular because you can see Bonnie Paine’s footwork — she’s playing a soundboard as well as the washboard:

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