Economists have an amazing ability to rationalize their actions

Political Inflationistas

Paul Krugman, NYT

Continuing the ongoing attempt to characterize the economists and economist wannabes who keep warning about inflation from the Fed’s efforts to do something about a weak economy, Noah Smith suggests that none of the inflationistas really believe what they’re saying. Instead, he writes, they’re either trying to defend economic models that defined their careers, but failed; lashing out because they personally have been made to look like fools; or playing to a lucrative audience of grumpy old rich white men, who are natural goldbugs:

So to sum up, there are three main reasons for predicting inflation, in defiance of both market expectations and recent past experience. These are 1. Commitment to a research paradigm, 2. Emotive expressions of political and personal anger, and 3. Cynical affinity manipulation.

I’d go along with most of this, with two caveats.

One is that my guess is that even the worst of these guys probably aren’t as self-consciously cynical as Smith seems to suggest. Snidely Whiplash types, twirling their mustaches and smirking over their evilness, do exist, but they’re rare. For the most part, people have an amazing ability to rationalize their actions: objectively, they’re cynically exploiting the rubes, but in their own minds they’re honest warriors for Truth, Justice, and the Austrian Way.

(More here.)