\nThis despite the actual low inflation<\/a>:<\/p>\n
So how do they maintain their beliefs?<\/p>\n Most of the 23 declined to comment; a few could not be reached (including Ronald McKinnon, who died the previous day).\u00a0 Of those who responded, only one, Peter Wallison at the American Enterprise Institute, came close to saying, \u201cMy prediciton was wrong.\u201d<\/p>\n \u201cAll of us, I think, who signed the letter have never seen anything like what\u2019s happened here.\u201d<\/p><\/blockquote>\n Most of the others preferred denial:<\/p>\n \u201cThe letter was correct as stated.\u201d (David Malpass. He worked in Treasury under Reagan and Bush I)<\/p>\n \u201cThe letter mentioned several things… and all have happened.\u201d\u00a0(John Taylor, Stanford)<\/p>\n \u201cI think there\u2019s plenty of inflation — not at the checkout counter, necessarily, but on Wall Street.\u201d\u00a0(Jim Grant of \u201cGrant\u2019s Interest Rate Observer.\u201d Kinda makes you wonder how closely he\u2019s been observing interest rates.)<\/p><\/blockquote>\n Then there was equivocation. After Thursday night\u2019s debacle \u2013 Giants 8, Pirates 0, knocking Pittsburgh out of the playoffs\u2013 someone reminded me, \u201cHey, didn\u2019t you tell me that the Pirates would win the World Series?\u201d<\/p>\n \u201cYes, but I didn\u2019t say when.\u201d<\/p><\/blockquote>\n Some of the letter-signers used this same tactic, and just about as convincingly.<\/p>\n \u201cNote that word \u2018risk.\u2019 And note the absence of a date.\u201d\u00a0(Niall Ferguson, Harvard)<\/p>\n \u201cInflation could come…\u201d\u00a0(Amity Shlaes, Calvin Coolidge Memorial Foundation)<\/p><\/blockquote>\n The 1954 sociology classic\u00a0When Prophecy Fails<\/em>\u00a0describes group built around a prediction that the world would soon be destroyed and that they, the believers, would be saved by flying saucers from outer space.\u00a0 When it didn\u2019t happen, they too faced the problem of cognitive dissonance \u2013 dissonance between belief and fact. But because they had been very specific about what would happen and when it would happen, they could not very well use the\u00a0 denial and equivocation favored by the economists. Instead, they first by claimed that what had averted the disaster was their own faith. By meeting and planning and believing so strongly in their extraterrestrial rescuers, they had literally saved the world. The economists, by contrast, could not claim that their warnings saved us from inflation, for their warning \u2013 their predictions and prescriptions \u2013 had been ignored by Fed. So instead they argue that there actually is, or will be, serious inflation.<\/p>\n The other tactic that the millenarian group seized on was to start proselytizing \u2013 trying to convert others and to bring new members into the fold.\u00a0 For the conservative economists, this tactic is practically a given, but it is not necessarily a change.\u00a0 They had already been spreading their faith, as professors and as advisors (to policy makers, political candidates, wealthy investors, et al.). They haven\u2019t necessarily redoubled their efforts, but the evidence has not given them pause.\u00a0 They continue to publish their unreconstructed views to as wide an audience as possible.<\/p>\n That\u2019s the curious thing about cognitive dissonance. The goal is to reduce the dissonance, and it really doesn\u2019t matter how.\u00a0 Of course, you could change your ideas, but letting go of long and deeply held ideas when the facts no longer co-operate is difficult. Apparently it\u2019s easier to change the facts (by denial, equivocation, etc.). Or, equally effective in reducing the dissonance, you can convince others that you are right. That validation is just as effective as a friendly set of facts, especially if it comes from powerful and important people and comes with rewards both social and financial.<\/p>\n Jay Livingston is the chair of the Sociology Department at Montclair State University<\/a>. You can follow him at Montclair SocioBlog<\/a> or on Twitter<\/a>.<\/span>","protected":false},"excerpt":{"rendered":" Four years ago, twenty-three economists (mostly conservative) signed a letter to Ben Bernanke warning that the Fed\u2019s quantitative easing policy \u2013 adding billions of dollars to the economy \u2013 would be disastrous. It would \u201cdebase the currency,\u201d create high inflation, distort financial markets, and do nothing to reduce unemployment. Four years later, it\u2019s clear that […]<\/p>\n","protected":false},"author":258,"featured_media":64396,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[36,12498,2104,42,37],"class_list":["post-64395","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-economics","tag-economics-great-recession","tag-knowledgeintelligence","tag-religion","tag-social-psychology"],"jetpack_featured_media_url":"https:\/\/thesocietypages.org\/socimages\/files\/2014\/10\/2.jpg","_links":{"self":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/64395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/users\/258"}],"replies":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/comments?post=64395"}],"version-history":[{"count":1,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/64395\/revisions"}],"predecessor-version":[{"id":64397,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/64395\/revisions\/64397"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media\/64396"}],"wp:attachment":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media?parent=64395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/categories?post=64395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/tags?post=64395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"2\"](\"https:\/\/thesocietypages.org\/socimages\/files\/2014\/10\/2-500x343.jpg\")
<\/a>
\nI don\u2019t know why I assume that high-level economists would be more likely than some ordinary people to change their ideas to adjust for new facts. Fifty years ago, in\u00a0The Structure of Scientific Revolutions, Thomas Kuhn showed that even in areas like chemistry and physics, scientists cling to their paradigms even in the face of accumulated anomalous facts. Why should big-shot economists be any different? It also occurs to me that it\u2019s the most eminent in a profession who will be more resistant to change.\u00a0 After all, it\u2019s the people at the top who have the greatest amount invested in their ideas \u2013 publications, reputations, consultantships, and of course ego. Economists call these \u201csunk costs.\u201d<\/p>\n