I'm a regular reader of Krugman's columns and the one you link to gives clear evidence of how political tribalism trumps rationality.
I agree on your correctives about current inflation. Sometimes completeness suffers from the desire to be brief. (Especially since I was just complaining about a lack of brevity.)
I'm a regular reader of Krugman's columns and the one you link to gives clear evidence of how political tribalism trumps rationality.
I agree on your correctives about current inflation. Sometimes completeness suffers from the desire to be brief. (Especially since I was just complaining about a lack of brevity.)
I think the reality of asset inflation is little understood. I live in a rural area where the value of a good acre of irrigated farm ground went from $2000/acre to $10000/acre over a few years. (Side note on the intersection of economics of government policy: Those 160 acre parcels given out under the Homestead Act are now worth over $1,000,000.) So why this big increase in value? It's still the same piece of dirt that can produce the same number of bushels of corn or soybeans. There are other factors, but I believe the biggest factor is the availability of money at extremely low rates. Compare what this asset inflation means for the farmer who, say, owns 500 acres and his hired man who makes $15/hour. The farmer now feels wealthy, having seen his farm land value go from $1 million to $5 million. So he feels comfortable vacationing in Hawaii or buying a new pickup. Meanwhile the hired man's wages have been stagnant.
I'm a regular reader of Krugman's columns and the one you link to gives clear evidence of how political tribalism trumps rationality.
I agree on your correctives about current inflation. Sometimes completeness suffers from the desire to be brief. (Especially since I was just complaining about a lack of brevity.)
I think the reality of asset inflation is little understood. I live in a rural area where the value of a good acre of irrigated farm ground went from $2000/acre to $10000/acre over a few years. (Side note on the intersection of economics of government policy: Those 160 acre parcels given out under the Homestead Act are now worth over $1,000,000.) So why this big increase in value? It's still the same piece of dirt that can produce the same number of bushels of corn or soybeans. There are other factors, but I believe the biggest factor is the availability of money at extremely low rates. Compare what this asset inflation means for the farmer who, say, owns 500 acres and his hired man who makes $15/hour. The farmer now feels wealthy, having seen his farm land value go from $1 million to $5 million. So he feels comfortable vacationing in Hawaii or buying a new pickup. Meanwhile the hired man's wages have been stagnant.