Paul Krugman: Fighting the Derp

[eridani]

http://www.nytimes.com/2015/06/08/opinion/paul-krugman-fighting-the-derp.html?_r=1

What am I talking about here? “Derp” is a term borrowed from the cartoon “South Park” that has achieved wide currency among people I talk to, because it’s useful shorthand for an all-too-obvious feature of the modern intellectual landscape: people who keep saying the same thing no matter how much evidence accumulates that it’s completely wrong.

The quintessential example is fear mongering over inflation. It was, perhaps, forgivable for economists, pundits, and politicians to warn about runaway inflation some years ago, when the Federal Reserve was just beginning its efforts to help a depressed economy. After all, everyone makes bad predictions now and then.

But making the same wrong prediction year after year, never acknowledging past errors or considering the possibility that you have the wrong model of how the economy works — well, that’s derp.

And there’s a lot of derp out there. Inflation derp, in particular, has become more or less a required position among Republicans. Even economists with solid reputations, whose professional work should have made them skeptical of inflation hysteria, have spent years echoing the paranoia of the goldbugs. And that tells you why derp abides: it’s basically political.

It’s an article of faith on the right that any attempt by the government to fight unemployment must lead to disaster, so the faithful must keep predicting disaster no matter how often it fails to materialize.

[bananas]

1. telltale sign of derp: predictions that just keep being repeated no matter how wrong they’ve been

But derp isn’t universal. There’s also plenty of genuine, honest analysis out there — and you don’t have to be a technical expert to tell the difference.

I’ve already mentioned one telltale sign of derp: predictions that just keep being repeated no matter how wrong they’ve been in the past. Another sign is the never-changing policy prescription, like the assertion that slashing tax rates on the wealthy, which you advocate all the time, just so happens to also be the perfect response to a financial crisis nobody expected.

Yet another is a call for long-term responses to short-term events – for example, a permanent downsizing of government in response to a recession.

[brush]

2. The way repugs keep with the failed ' cut taxes/trickle down' myth is derp of the highest order

It's been 30 some years since Jack Kemp/Reagan fairytale began and it hasn't worked — in fact it's failing spectacularly under Brownback in Kansas right now.

[Warpy]

3. Fearmongering about inflation is how and why they keep wages so depressed

The dirtbags blamed labor over the runaway inflation in the late 70s, when it had been the tripling of energy prices that had caused it. They complained every time one of us got a raise, even though those raises lagged far behind the double digit inflation of the day.

Fear over inflation did have a point: people on fixed incomes like pensions and annuities and people living on life savings were killed over 20 years post retirement at 4% per year. Inflation adds up quickly to those not living on indexed means. However, instead of rewriting the laws to index the means to inflation, they blamed labor. It was convenient. It also did absolutely nothing about the inflation built into fiat money.

Understanding inflation, where it comes from and what to do about it is the big job ahead of economic wonks in the coming years. If they don't manage to cope with it in a more constructive manner than depressing wages, they'll have a revolution on their hands.