27 February 2013

Ron Paul's End of World Prophecies

Wikipedia lists dozens and dozens of end of world prophecies. Oddly, the alarm and attention raised by these prophecies works like advertising, attracting new members, and the failure to come true doesn't seem to much alienate followers.  (There are, for instance, a great number of Jehovah Witnesses in spite of their getting the dates wrong for the apocalypse on more than one occasion.)

I think that there's likely a good overlap between Ron Paul's constituents and the folks susceptible to end of world religious prophecies. There are folks primed for truly catastrophic news. It just feels right to them. For decades Ron Paul has been warning of a coming economic apocalypse, one brought on by loose monetary policy that will trigger great inflation before causing markets to crash. At times it seems as though the audience for such apocalyptic news is larger than the audience for boring and esoteric talk of fiscal stimulus.

Does Ron Paul have great economic insight or is he more like a religious messiah with a vision?

Well, the great inflation has not yet happened. And Ron Paul has been (mostly) in office since 1976 - nearly 40 years. This absence of economic apocalypse suggests there may be some flaws in his predictive models. In spite of this, it is hard to think of a politician the Tea Party more admires.

Yesterday Fed Chairman Ben Bernanke asked Congress to avoid the Sequester because the economy is still struggling. Senator Bob Corker, a Republican from Tennessee, accused Bernanke of being soft on inflation. As Bernanke pointed out, inflation on his watch has been the lowest of any Fed Chairman since WWII.

Corker and his ilk don't need the numbers to prove that Bernanke's loose policy causes inflation. They've got a prophet who has warned them of doom. Poor Bernanke is so caught up in book learning that he misses this deeper truth and thinks that inflation is not a problem because it is low. Once the prophecies of doom have gathered the faithful, they're not easily disbanded. And right now, they're no marginal faction: in fact, they are about to give us a sequester.

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