Erick Erickson Sees Inflation, But The Only Thing That's Inflated Is His Derp
Erick Erickson has finally explained why America hates Washington: It's because people in Washington aren't ignorant enough.
Of course, he phrases it slightly differently. He says that unlike denizens of the Acela corridor, real Americans worry about " the price of a gallon of milk and loaf of bread that keep going up though Ben Bernanke tells them there is no inflation."
As Paul Krugman points out, bread prices have been flat for the last four years. Milk prices are volatile; lately, they've been declining, and they're lower than they were in 2008.
Bureau of Labor Statistics
Bureau of Labor Statistics
There was a run-up in food prices in the middle of the last decade, driven by demand growth in middle-income countries, but prices have leveled off. Erickson would know this if he consulted the same Bureau of Labor Statistics data that coastal elitists like Bernanke are relying on.
Erickson's rant is literally the definition of derp. He has a strong prior inclination to believe that inflation is high. As such, his view is not responsive to strong evidence to the contrary, such as BLS data showing very low inflation both overall and in the specific products that Erickson is whining about.
The reason we need inflation data is that casual perceptions of inflation tend to be wildly inaccurate. The Cleveland Federal Reserve Bank surveyed over 20,000 people between 1998 and 2001 and found that, on average, Americans thought inflation was around 6.0%; during that period, actual CPI inflation averaged 2.7%.
So, Erickson's ignorant view of inflation actually is more authentically American than Bernanke's.
When I tweeted about the Erickson-Krugman exchange, I heard more from the derp brigade about how the BLS stats are wrong. Take for example Tom Anderson, who directs the Government Integrity Project at the National Legal and Policy Center, a conservative think tank I hadn't heard of before today:
@JamesOverholt @DylanByers @jbarro SMH, I'm paying over $6 a gallon. That's a huge increase.
— Tom Anderson (@TomTomJAnderson) June 28, 2013
Because I apparently do not value my time as much as I should, I called a Publix supermarket and determined that you can buy a gallon of whole milk for $3.59 in south Florida, where Anderson lives.
That led to Anderson telling me that he's unwilling to buy store-brand milk. Apparently I'm not the only coastal elitist around here.
Erickson and Anderson are half right about one thing: Washington elites actually are screwing up monetary policy. Inflation is too low! The Federal Reserve is signaling that is going to back off too early from its easing efforts because Erickson's phantom inflation fears are shared by a lot of people on the Acela Corridor, and even by some members of the Fed Board of Governors.
Failures of elite policy-making like the Fed's failure to inflate are painful for two reasons. One is that they put a drag on the economy and mean more Americans are out of work than need to be. The other is that they give ammunition to people like Erickson who would toss the elites aside and have the country run by a rabble that revels in its own ignorance.
If elites screw up enough, we end up having to use phrases like "Mayor Rob Ford."
America absolutely is being failed by its economic policy elites. But anti-elitists like Erickson have all the wrong diagnoses about how they are failing. They hate Washington for all the wrong reasons.
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