Nope. Photographer: Scott Eells/Bloomberg
Nope. Photographer: Scott Eells/Bloomberg

Paul Krugman says that I "have no home": Conservatism has been taken over by monetary cranks. Efforts to argue conservatives out of crankery -- as I tried to do here yesterday -- have failed and will keep failing because it is "deeply embedded in the modern conservative psyche."

I don't agree. Most conservatives are more concerned than I am about the inflationary potential of the Federal Reserve's recent policies. But while I think that view is wrong, I don't think it's crazy.

Relying on shadowstats.com to claim that inflation is a lot higher than the federal government says -- as one conservative argued in National Review Online yesterday -- is, in fact, crankery.

But that's not the dominant view on the right. There's a reason that James Pethokoukis of the American Enterprise Institute joined me in criticizing the article: It was an unusual instance in which a well-known conservative writer gave crank inflation statistics credence. Presumably that's why Krugman's only other example comes from three years ago.

There always have been some conservatives attracted to crankery and always will be. But the next Fed chairman appointed by a Republican won't be one of them. That appointee may well think that monetary policy has been too loose. He or she is highly unlikely to think that official inflation statistics have dramatically understated the real rate over the past few years -- or, for that matter, that we should return to the gold standard or that the monetary base should never increase.

These views haven't actually been a major obstacle to better monetary policy over the past few years, because few people who hold them make policy or have much influence over it.

Other views have been more of a problem: the view that low interest rates are a sign that monetary policy is already loose; the view that monetary policy can't help an economy at or near zero interest rates; the view that looser money now poses a serious risk of inflating asset bubbles.

Those views and similar ones aren't just held by cranks. They aren't held just by conservatives, either. Some of them are held by the president himself, who said he was looking for a Fed chairman who agreed with them.

Krugman says that I'm "frustrated" by conservative crankery. Not nearly as frustrated as I am with other people, whose mistakes have been more consequential.

To contact the writer of this article: Ramesh Ponnuru at rponnuru@bloomberg.net.

To contact the editor responsible for this column: Timothy Lavin at tlavin1@bloomberg.net.