Knee-Jerk Self-Appointed Experts Who Can't Wait to Tell Me Off

Gary North

Aug. 15, 29012

Some people have time on their hands. They read articles, looking for something that will give them a chance to tell off the author. This makes them feel superior. "Well, I guess I showed him!"

I got a letter today from a critic who was going to put me in my place. I had written this.

If Congress nationalizes the FED, then we could get hyperinflation, just to meet present bills. But this will not solve the long-term problem: government unfunded liabilities. After the currency dies, the debt will still be there.

That was too much for this expert. He decided to fill me in. He sent a letter saying that I was wrong, that politicians would inflate.

I lived through the Brazilian hyperinflation, and I think you're wrong about whether it will happen in the US. It will, and here's why. Politicians don't win votes (and thus stay in power) by telling their constituents "Sorry, we can't keep our promises." They win by saying (as they did in Brazil), "We're doing everything we possibly can, but market forces from the outside are working against us." No Brazilian politician ever lost any election by allowing hyperinflation. No Brazilian politician ever won an election by promising years of sacrifice and by defaulting on promises made to the public. In fact, Brazil's problems resolved only after Fernando Henrique Cardoso, the (unelected) finance minister of President Itamar Franco, essentially hijacked the economy and forced difficult measures down the throats of the banks and the unions. It was extremely unpopular at the time, but Cardoso had little to lose. He wasn't running for anything. (Of course, once it worked, he was then elected -- twice -- to the Presidency). I think the same will happen here. Politicians can't allow a default, because it would be the death knell of their power. They can, and will, allow and even condone, hyperinflation.

My point, exactly.

My article was on why economists at the Federal Reserve, unlike politicians, will not inflate. My critic never mentioned this.

What drives these people? What inner demon forces them to write letters to a specialist to tell him he is dead wrong, and then take the same position which the specialist has taken?

It happens to me all the time. The instant-response critics have hair triggers. They are incapable of reading what others say. They want to attack so badly that they are not able to comprehend what they are reading. They respond, like Pavlov's dogs.

I have dealt with these people for over 45 years. They never cease to amaze me.