Open Mic September 7

Rom­ney has gone totally off the deep end. I mean really. Com­pletely insane.

Rom­ney is so des­per­ate, he is mak­ing up the most absurd crap one can imagine.

I dare you all to click on the link. The man has gone bat­shit crazy.

Michael, thank you for explain­ing that.

I have an immense prob­lem. Stuff like what you explained seems intu­itively obvi­ous to me. There­fore, I assume it is obvi­ous to every­one, and I don’t bother to explain it. Why explain some­thing that is freak­ing obvious?

So when I read stuff like what Mule linked, I think, “This is clearly a per­son who is try­ing to get low-​​information peo­ple upset over non­sense. But the peo­ple who read Log­a­rchism are not low-​​information peo­ple, and they’re pretty smart. So none of them are going to be scared by this silli­ness, right?”

It’s clear that Williams’ con­cerns are par­ti­san pro­pa­ganda, not actual eco­nomic wor­ries, as you explain. I can’t imag­ine any­one would be taken in by his argu­ment, other than par­ti­sans who want to believe it any­way. I’m not ego­tis­ti­cal enough to think that I’m smarter than the aver­age bear, so I assume that what is clear to me is also clear to every­one. Maybe I’m wrong.

When I dis­miss an obvi­ous par­ti­san hack like Williams, some­one like Mule insists I didn’t read him, or don’t under­stand him. But I do under­stand him. I also under­stand that he’s an idiot.

Hell with it. I’ll let you explain this stuff.

Mule,

I get what you’re say­ing about cre­den­tials. But since peo­ple with equally good cre­den­tials come to oppo­site con­clu­sions, “hav­ing cre­den­tials” can’t pre­vent one from being flat wrong. Cer­tainly Paul Krug­man has bet­ter cre­den­tials than either of us (prob­a­bly even bet­ter than Williams — I don’t think Williams has a Nobel on his resume, right?), and you feel qual­i­fied to dis­agree with Krug­man. (At the moment, I’m not defend­ing Krug­man, nor attack­ing you; I’m merely under­lin­ing that “cre­den­tials” may not be rel­e­vant to the cur­rent discussion).

As for the basis of my opin­ions on Williams, Michael explained it bet­ter than I could. In brief, I think Williams is look­ing at the wrong fac­tors, blam­ing the wrong things as causative, and ignor­ing too many of the actual influ­ences. He has a point he wants to make, which may be a per­fectly valid point, but he’s push­ing it too far. The pre­dic­tions of dis­as­ter he’s mak­ing have been made for a long time, and just aren’t com­ing to pass.

It’s a bit old and worn out to keep trot­ting that out on Krugman’s
behalf as if it makes him above reproach from some­one with­out
a Nobel. 

If that had been what I was doing, you’d be jus­ti­fied in point­ing this out. But I wasn’t try­ing to imply that Krug­man is above reproach. Quite the con­trary, Since you so often take Krug­man to task, despite his achieve­ments and cre­den­tials and recog­ni­tions, it implies that you agree achieve­ments and cre­den­tials and recog­ni­tions do not make some­one immune to being taken to task. Far from using Krugman’s Nobel as a shield to put him above reproach, I was try­ing to say that even hav­ing got­ten a Nobel does not make one right all the time, cer­tainly not in your view. There­fore, I don’t really take Williams’ cre­den­tials as mean­ing much, cer­tainly not more than, say, Krugman’s. Either way, what mat­ters is the argu­ment, and Williams didn’t con­vince me.

Don’t dis­count a creep­ing dis­as­ter because you either don’t say or are insu­lated from the effects. 

That’s not why I dis­count it. I dis­count it because I’m con­vinced Williams is wrong in his analy­sis, not because I per­son­ally don’t feel the effects. I’m con­vinced the effects he’s point­ing to are due to other causes entirely, and that the cures he would pro­pose would do far more harm than good.

I under­stand what you’re say­ing about “tip­ping points,” that cer­tain phe­nom­ena are not really vis­i­ble until they reach a cri­sis thresh­old and make things fall over. But the prob­lem here is that even if Williams is wrong, he can keep say­ing, for­ever, “We don’t see the effects yet — hyper­in­fla­tion hasn’t hit us — only because we haven’t yet reached the tip­ping point.” He can use this argu­ment for the next hun­dred years to avoid con­sid­er­ing the pos­si­bly that he is sim­ply wrong.

It’s the same as with, for instance, an eco­nomic pol­icy designed to spur growth that doesn’t appear to be work­ing. Believ­ers in the pol­icy can point to some sub­tle met­ric and say, “but see this? Things are chang­ing. It all hasn’t reached crit­i­cal mass yet. Give it time.” How long do we wait to see the effects before we answer, “no, it really isn’t work­ing at all”?

I don’t see any evi­dence that any­thing hap­pen­ing now is going to lead to hyper­in­fla­tion. I most cer­tainly don’t think that the low inter­est rates and mild QE pro­grams are going to do it.

We’re not see­ing sys­temic infla­tion; we’re see­ing seg­mented inflation.

Yes, this is what I meant when I incor­rectly and inex­actly said some­thing about not see­ing any evi­dence of infla­tion. I was speak­ing in sys­temic terms, and I should have made that clear. I don’t see any evi­dence of the sort of system-​​wide pres­sures that devalue cur­rency over the econ­omy as a whole. Yes, the prices of some indi­vid­ual things are ris­ing — while the prices of other com­modi­ties and processes are falling. There isn’t any evi­dence of a gen­eral system-​​wide trend of rapidly ris­ing prices across a wide swath of the econ­omy, other than fluc­tu­a­tions caused by (for exam­ple) energy speculation.

I’m sure Mule is right that, in at least some cases, there is more going on than sim­ple sup­ply and demand. There are pres­sures involv­ing tech­nol­ogy changes, big shifts in the mix of active or grow­ing indus­tries, a crum­bling infra­struc­ture that puts pres­sure in unusual places of the econ­omy, dis­as­ters such as Hur­ri­cane Isaac that force spend­ing and rev­enue shifts, two wars wind­ing down which also sig­nif­i­cantly alter spend­ing and the mix of gov­ern­ment con­tract­ing, etc., etc. And none of these influ­ences have com­pletely played out; all are going to con­tinue hav­ing effects for a long time.

All told, it doesn’t appear to me to be push­ing us toward hyper­in­fla­tion. Indeed, I see more dan­ger in let­ting things cool down too much, and drop­ping us into another reces­sion, which is what’s hap­pen­ing in Europe.