Inflation

Macro Logic: Ad Hominem? Check. Hitler? Check. Appeal to Authority? Check.

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Runaway deflation strikes again!

A person identifying himself or herself as "Daniel-Silviu Ioni??" sent me some poison emails over the weekend, apparently in response to my post on Peter Schiff's QE3 rant, which I didn't realize got a bunch of comments. 

Now, I understand that Schiff's wooly fulminations are not everybody's cup of tea, but this response was a pretty striking specimen of how macroeconomic true believers think and talk. First up: the accusation (and I plead guilty as charged!) of being insufficiently respectful of the tortured math and double-reverse logic late Keynesian theory demands: 

[S]ince it is more than obvious that you are completely ignorant on macroeconomic matters (otherwise you'd realize what a clown Schiff is)—what exactly makes you think that you are qualified to comment?

Next comes a hysterical warning of the chaos that will ensue if the great unwashed are allowed to use money that both strengthens and weakens depending on market conditions. This one features a comparison to World War II (which, my lying history books failed to tell me, had its root cause in deflation of the mark during the Weimar Republic): 

If this were some sterile academic debate, I wouldn't give a damn on what ignorant bystanders think. But the stakes are real and oh-so-high. You might want to remember what happened last time when the world went through a similar slump (hint—the Soviets got their paws on half of Europe—thankfully, the unwashed half—and two atom bombs fell on Japan). 

Finally, an expert to the rescue: 

PS I took the liberty of attaching a .pdf economics textbook [by Greg Mankiw, George W. Bush's CEA chairman], since you are badly in need of one. 

The interventionists' pants-soiling bloviation about deflationary catastrogeddon is in its way the flip side of the claims by Schiff and others that hyperinflation is right around the corner. Clearly the light-speed devaluation of the dollar (at least relative to other currencies) continues not to happen. But so does the recovery indicated by macroeconomists. My point is that "under control" inflation is doing damage to American balance sheets and savings rates that rarely gets mentioned. It's been six years since the top of the real estate market. It's fair to note that medium-level pain over a long period of time is not necessarily better than massive pain over a short period of time. 

In any event, I am well aware that I'm not an economist by training. I welcome challenges to what I'm sure are my many lacunae and blind spots. But in this case I have to echo Schiff: Is this really all you've got?