RtO has emphasized one: unsupervised markets fail. Some rightwingers call this a feature, not a bug, and the damage done to people not in the markets does not bother them.
Paul Krugman has emphasized that since 2008 fears that inflation is about to break out have proven unfounded. So much so that some even of his fans find him tiresome. (I try to keep RtO from being tiresome, so I have not recently had anything to say about unsupervised markets, but you can bank on the fact that the people who need to understand this most still don't get it.) Krugman is more relentless.
In his column today in the New York Times, he introduces a new idea, which I find plausible. Krugman asks why the inflation hawks (roughly, the Republican Party) insist, against evidence, that inflation is either here or just around the corner. Part of the answer, he decides, is affinity fraud.
And anger against “takers” — anger that is very much tied up with ethnic and cultural divisions — runs deep. Many people, therefore, feel an affinity with those who rant about looming inflation; Mr. Santelli is their kind of guy. In an important sense, I’d argue, the persistence of the inflation cult is an example of the “affinity fraud” crucial to many swindles, in which investors trust a con man because he seems to be part of their tribe. In this case, the con men may be conning themselves as well as their followers, but that hardly matters.
Well, that helps explain the anger, but as a couple of commenters wonder, what explains the lack of inflation?This tribal interpretation of the inflation cult helps explain the sheer rage you encounter when pointing out that the promised hyperinflation is nowhere to be seen. It’s comparable to the reaction you get when pointing out that Obamacare seems to be working, and probably has the same roots.
This is really easy to understand. The short definition of inflation is too much money chasing too few goods.
There is certainly plenty of money, even if you and I don't have so much of it. (Another theme I have held for years but never developed in RtO -- I should do that -- is that for the first time in history the world has too much capital.)
But haven't any rightwingers noticed that there are not too few goods? The storage industry, which was a hole-and-corner way of exploiting obsolete warehouses a generation ago, is now huge. Drive through even rural areas of the Mainland and you will see ugly storage businesses popping out of pastures, full of items that Americans own but have no use for.
The capacity of China to grind out shoddy is effectively limitless. Where we do see inflation is in goods that cannot be made in China: like Gilded Age mansions in Manhattan.
Few of these have been single-family homes recently, but they are being snapped up at prices sometimes exceeding $50 mil, with at least that much more required to convert them back to single-family residences. It is described as a seller's market.
|For sale: truck or house, $28 mil|
I note a photo in the Times of one of these mini-mansions. This one is already being renovated, and there's a workman's truck parked in front of it. The house is not as wide as my Toyota Tacoma is long. Yours, either the house or the truck, for $28 million. Cash preferred, the story says.