Michael Kinsley’s Inflation Demons Are Still Haunting Him

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Two years ago Michael Kinsley wrote a piece in the Atlantic explaining that he was worried about inflation:

For this, I was widely ridiculed, and I’d like to take this opportunity to claim vindication. That is, I’d like to —  but I can’t. Inflation (CPI) has been creeping up the past couple of years —  from less than 2 percent to more than 3 percent  —  but that’s still pretty low. Nevertheless, I double down: Barring a miracle, there will be a fierce storm of inflation sometime in the next few years and it will wipe out a big chunk of the national debt, along with the debts of individual citizens, and the savings of others. 

One reason I say this is that the arguments on the other side have shifted. It used to be, “It’s not gonna happen — so don’t worry about it.” Now it’s, “You know, a moderate dose of inflation would be no bad thing. So don’t worry about it.”

The last time around I sort of semi-defended Kinsley. This time around I’m just perplexed. His original piece appeared in March 2010. Here is Paul Krugman a month earlier praising a suggestion from IMF chief economist Olivier Blanchard that the world could use a bit of additional inflation:

I’m not that surprised that Olivier should think that; I am, however, somewhat surprised that the IMF is letting him say that under its auspices. In any case, I very much agree.

I would add, however, that there’s another case for a higher inflation rate….[blah blah blah]….So yes, let’s have modestly higher inflation. Alas, Ben Bernanke — at least when speaking publicly — doesn’t agree. And I can only imagine what Trichet would say.

And here is Ryan Avent at the same time, not only agreeing but pointing out that Kenneth Rogoff, Greg Mankiw, Scott Sumner, and Brad DeLong all agree too. So this time I can’t even semi-defend Kinsley. Plenty of economists were making the case for higher inflation well before he wrote his original article. The arguments haven’t shifted, he just never noticed them before.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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