Jeremy Smith — Krugman on inflation, “financial repression” and the 1%

Krugman: “Carmen Reinhart has argued, persuasively, that highly indebted countries normally work off their debt in large part through “financial repression” — keeping interest rates low while inflating part of the debt away. The thing is, although this sounds bad, it actually isn’t — for the vast majority of people. Britain did far better through financial repression after World War II than it did through orthodoxy after World War I.

But there is one small but influential group that is in fact hurt by financial repression: again, the 0.1%”

Jeremy Smith: “Financial repression”, alas, has entered the day to day vocabulary even of progressive economists as if it were a mere “technical term” – as indeed Carmen Reinhart had the chutzpah to describe it in an interview with Der Spiegel! But it is in no way politically neutral, and Ms Reinhart’s own writings demonstrate ample evidence of its ideological bias. Paul Krugman has it right on financial repression. It is a concept that only serves the interests of the 1%.

PRIME
Krugman on inflation, “financial repression” and the 1%

Jeremy Smith