Real Entrepreneurs Don’t Fear Inflation

Suzy KhimmEarlier this week, Suzy Khimm (the only member of the WonkBlog staff to respond to my request for a WonkBlog twitter account) wrote, The Inconvenient Truth Facing Deficit Hawks. In it, she noted that for all of the squawking of the deficit hawks—”Any day now, bond interest rates will skyrocket!”—the bond markets themselves show no concern about government credit worthiness.

In addition, today, Paul Krugman wrote, Franc Thoughts on Bond Vigilantes. He goes further, noting that if bond prices did as the deficit hawks claim, it wouldn’t be bad for the economy at all:

[I]t’s actually quite hard to tell a story in which a loss of confidence in U.S. bonds hurts the real economy. Why wouldn’t it just drive down the dollar, and thereby have an expansionary effect?

He then goes on to talk about the fact that there is neither theory nor historical example that indicates anything else.

This brings to mind an idea that I’ve been thinking about for a while: owners can predict their futures. Rentiers—people who own for a living—know that inflation is bad for them. If they have loaned, say, $100,000 at 10% for 30 years, any rise in inflation is bad for profits. But for actual entrepreneurs, the future is unpredictable. High inflation? Low inflation? These are not primary concerns, if they are concerns at all.

So of these two groups, one has a very real incentive to try to control politics: the rentiers. So all of the deficit hawks running around talking about how inflation is just around the corner and how horrible this is going to be are just rentiers and their propagandists. We get into trouble when we assume that they speak for business interests broadly. They only speak for the least useful of the business interests—in fact, business interests that are often harmful. These are not the people who will bring us the next Big Thing, unless that Big Thing is another financial crisis.

Bill O’Reilly Is Not a Racist

Bill O'ReillyOn Monday, Bill O’Reilly went after some of the people who complained that his comments on the changing demographics of the country were racist. I don’t actually think that Bill O’Reilly is a racist. He’s just a dick—to everyone. He is an angry and hateful man who seems to be very sure that, against all evidence, he has a good bead on reality. But none of that really matters. What does matter is that he is wrong about his comments Monday.

He starts off his “Talking Points Memo” by supposedly defending Mitt Romney against those who are attacking him. I don’t particularly care. On the one hand, I don’t think Romney did a worse job running for president than anyone else; on the other, why should anyone care if some plutocrat gets his feelings hurt? But I do care that O’Reilly doesn’t have enough honesty in him to come out and say what’s really on his mind: he’s angry that people are calling him a racist. Before he gets to that, he trots out the standard conservative line about the election: Obama ran a great campaign. Yeah, that was it; it couldn’t have anything to do with ideology or policy.

Eventually, O’Reilly gets to the core of his argument: he isn’t racist, the world is. It isn’t that he claimed the poor were voting for Obama because the president was giving them gifts, it is that the president was giving the poor gifts and that’s why they voted for him. He then goes on to note that many of those making less than $30,000 per year, “Receive entitlements—food stamps, housing subsidies, that kind of thing.” And this is why they voted for Obama.

O’Reilly’s point is not that there’s anything wrong with this; he pointedly doesn’t say any such thing. But it is clear enough what he’s saying: the votes were bought explicitly. Sure, saying this kind of thing is offensive. But is it really any more offensive than the guy usually is? I don’t think so.

What really bugs me is that it is nonsense. People don’t vote this way. Despite what I’ve heard from conservatives privately over the years, everyone I know (and this includes a lot of low-information voters) takes the process of voting very seriously. I don’t know any “single issue” voters. And I certainly don’t know of any people who vote because of the hope of “gifts.” People vote for the candidate they think is best.

The poor do indeed vote for people who speak to their concerns. But these are also the concerns of everyone they know. Poor people don’t spend Christmas with the Romneys, unless they are working for them. And the poor understand what policies would be best for all of the people they know.

I can’t speak as well for the rich, since I don’t know them. I do, however, know quite a bit about their voting patterns. I know a lot about how politicians promise and deliver huge gifts to them. They most likely think that tax cuts for the rich are good for society, but then they most likely think that whatever is good for them is good for America.

The policies that help the poor are cheap. The policies that help the rich are expensive. Why is it that people like Bill O’Reilly focus on the policies that help the poor while rarely even admitting to the existence of policies that help the rich? I think I know the answer: conservatives hate the poor. And this is the problem they have going forward, because their policies of the last three decades have made a lot more of them.

Bathroom Queue

I was recently at the local CVS, and I saw the following sign on the bathroom door. It seemed very strange to me. Unless you read the fine print, this is very confusing. It certainly looks like CVS is offering to text you when the bathroom is available. What’s next? Those little buzzer devices they have at The Olive Garden? (By the way: don’t do business with them.)

<%image(20121123-cellphonebathroom.jpg|450|696|Text When Bathroom Is Available)%>

For the record, CVS is actually offering to text you when a sale item is in the store. They still only provide old-fashioned bathroom queuing.