Allan Meltzer on Imminent Inflation, and Other Topics
Evening Must-Read: Matthew Yglesias: Newsletters Are the New Weblogs

The Puzzlement of "Cognitive Capture"

I want to label something that I see "cognitive capture", and think about it.

The vir illustris Ron Rosenbaum, however, disagrees. Rosenbaum is writing about David Corn's story that Bill O'Reilly was not in fact in a "war zone" in 1982, and about how O'Reilly is responding by saying: "you can tell that I am a truth-teller because the liberals attack me so much". And he thinks that "cognitive capture" is not a useful concept. We should pretend it does not exist. We should instead just tell the truth day by day as if we were having a reasoned discussion. And we should hope that eventually, with enough truth-telling, the chips will fall where they should:

Jay Rosen on Twitter: "1/ To clarify what I meant in saying I share this view. The @MotherJones story on O'Reilly was still worth doing...":

@jayrosen: 1/ To clarify what I meant in saying I share this view. The @MotherJones story on O'Reilly was still worth doing. It's important to nail down what actually happened, compare that to O'Reilly's statements, and criticize him for misrepresentation. But. Since we're trying to be factual, it is a fact that Fox News is not only built to absorb these blows but to strengthen itself by them. Things are way beyond whether Fox News 'has' or does not 'have' credibility, journalistically. That discourse is surreal at this point. We have to face up to a kind of rupture in the news system. 'Making shit up' is a devastating blow over here, and no big deal over there.. So what I object to is any assumption of 'continuity in credibility.' We need metaphors of discontinuity if we're to understand Fox News.

@RonRosenbaum1: @jayrosen_nyu A bit condescending to say 'those people''s eyes can't be opened a bit by somethng as egregious as this.

@Apinak: @jayrosen_nyu In 2009, Obama Admin said Fox was not a news station. Rest of media rushed to Fox's defense. Maybe less so now.

@jayrosen_nyu: @RonRosenbaum1 Okay. But I say it's a bit condescending to think 'those' people's eyes just need to be opened to who O'Reilly really is.

@RonRosenbaum1: @jayrosen_nyu You seem to be saying they're beyond hope. More than a bit condescending.

@delong: .@RonRosenbaum1 I don’t think you have fully grasped Rupert Murdoch’s business model here, young grasshopper. Creating a bubble in which his viewers see themselves as besieged and vilified is the point cc: @jayrosen_nyu

@RonRosenbaum1: @delong @jayrosen_nyu Admiration for biz model shouldn't be reason for denigrating value of truth telling j'lism. The bubble not invincible.

@delong: .@RonRosenbaum1 Remember: I have been wingman for Paul Krugman for 15 years now, watching him be right about the economy & economic policy time after time after time. How much bubble-pricking has he accomplished? cc: @jayrosen_nyu

@ZakW1: @RonRosenbaum1 @delong @jayrosen_nyu not enough because he's too 'mean' if he had only been 'polite'

@RonRosenbaum1: @delong @jayrosen_nyu So your conclusion: don't bother telling the truth, it's frustrating if the walls of the city don't immediately fall.

@jayrosen_nyu: @RonRosenbaum1 @delong I specifically said that is NOT my conclusion.

@RonRosenbaum1: @amhill @jayrosen_nyu Not talking about Fox execs but about viewers who might have something to learn. Vets for instance. You left out the BUT (#3) which suggest the important thing is that truth-telling is hopeless, a fool's errand.

@jayrosen_nyu: @RonRosenbaum1 @delong I don't agree that I'm suggesting that.

@RonRosenbaum1: @steveniweiss @jayrosen_nyu @delong So you're condemning them all as beyond hope, and giving up on these lesser beings beyond truth.

@RonRosenbaum1: @steveniweiss @jayrosen_nyu @delong Bottom line: you all think @DavidCornDC's effort essentially worthless or counterproductive. I disagree.

@steveniweiss: @RonRosenbaum1 @jayrosen_nyu @delong I think what Corn's doing is valuable. But the end result is that much of its value is in revealing the fault lines between these camps.

@RonRosenbaum1: @steveniweiss @jayrosen_nyu @delong 'Faultlines' something knew. Everybody didn't knew @motherjones reported--added truth value.

@delong: .@RonRosenbaum1 (1/29 That’s not true. We get up every day and try to tell the truth. And we will keep doing so. But along with optimism of the will there must come pessimism of the intellect. Consider Karl Rove, who famously had no clue what he was talking about on election night in 2012. Did that harm his authority? cc: @jayrosen_nyu

@delong: .@RonRosenbaum1 If you have any ideas as to how to make truth-telling work better, please share them. But pretending that truth telling is working on Fox News watchers at even a glacial pace is deceiving yourself cc: @jayrosen_nyu

@RonRosenbaum1: @delong @jayrosen_nyu Actually I empathize with you. Krugman denial PTSD.

@delong: .@RonRosenbaum1 U come off to me as evading big issue—the cognitive closure of Fox News & other right-wing discussions. What I want from U is a rhetorical strategy to convince Fox viewers Krugman better economist than Kudlow cc: @jayrosen_nyu

@RonRosenbaum1: @delong @jayrosen_nyu Don't buy the empirical value of 'cognitive closure' buzz phrase. Corn's reporting a challenge to it. Whose side u on? I think Corn is using the best strategy-truth. Krugman's econ theory opionionating not as powerful as 'stolen valor'.

@delong: .@RonRosenbaum1 We say: ‘cognitive closure is never complete, so @DavidCornDC should keep doing what he is doing’ We say: ‘but given cognitive closure we need to find better ways to reach the Fox News audience’. You say: ‘pretend cognitive closure doesn’t exist’. But I don’t see the point of that… cc: @jayrosen_nyu

@RonRosenbaum1: @delong @jayrosen_nyu to vets for instance. Maybe Corn's 'strategy' will fail to move the needle on Fox, but on O'R? We can't know yet. I guess we'll have to agree to disagree over whether 'cognitive closure'is science or soc. But glad we agree on Corn

@jswatz: @delong @RonRosenbaum1 @jayrosen_nyu while y'all are busy arguing about heuristics, O'Reilly will dismiss you as 'pinheads' and move on

@jayrosen_nyu: @jswatz @delong @RonRosenbaum1 Of course he will. Did anyone suggest otherwise?

@jayrosen_nyu: @RonRosenbaum1 @delong I think you have a good point with veterans. That's one of the bigger reasons Corn's reporting matters.

I disagree with Ron Rosenbaum because I see what is going on as much broader than simply Bill O'Reilly, and I see it as a serious flaw in our modern intellectual policy and political discourse. So let me marshall my arguments...

As I noted earlier today, ever since February 2009 Allan H. Meltzer has been saying that unless the Federal Reserve rapidly and radically reverses course and shrinks its balance sheet back to its pre-2008 size (I paraphrase): "inflation is coming!", along with declarations that "Paul Krugman is mean!", "inflation is here! See this year's 3.5% rise in food prices! Other prices will follow!", "The Federal Reserve is clueless and has committed grave errors by embarking on QE policies!", and so forth.

I call this "cognitive closure": Allan Meltzer is wrong--rather than being a near-certainty if the Federal Reserve does not rapidly and radically reverse course, or a likelihood, or a significant risk, or a tail risk that would be so damaging it is nevertheless worth guarding against, an inflationary breakout in the United States has been and remains a very remote possibility. Lots of information year after year is out there that makes it obvious that Allan Meltzer is wrong. Yet he never thinks: "hmmm, I was wrong, maybe my model was wrong", or "hmmm, maybe I should be quiet given my track record isn't so hot", or "if anybody actually invested based on what I was saying, they lost a lot of money--I need to apologize to them". Instead, the closest Allan Meltzer ever comes to marking his beliefs to market is to double down on them:

Allan Meltzer: My Response to NYT Columnist Krugman: "I avoid reading Paul Krugman’s column... the New York Times because he often attacks people viciously. That is not a useful way to discuss ideas. If the Times were a better paper, like the Times of the distant past, it would refuse to publish his screed.... Excess bank reserves [have] delayed the coming inflation.... If Krugman were a more astute analyst he would wait to see what happens to the $2.5 trillion of idle reserves before declaring all those who warn of inflation’s dangers unprofessional. Claiming victory at this stage can be likened to announcing the game’s result with one half still left to play...

And he buttresses this by state that people like Paul Krugman and I should not have accurately forecast the collapse of monetary velocity and the monetary multiplier by falsely claiming that: "nothing to that extent had ever happened [before]..."

Now I want to distinguish two things:

First, there is the level of Rupert Murdoch and his ilk and their media empires--the Wall Street Journals, the Fox Newses, etc.

For them, people like Allan H. Meltzer warning of the imminent breakout of inflation are useful. They are useful because Murdoch and company's business strategy is to sell eyeballs to advertisers and to harvest those eyeballs by terrifying them with stories of how the bad guys--liberals, inflationists, the Federal Reserve, Blacks, Muslims, terrorists, and so forth--are putting the viewers' lives, families, and fortunes in danger AND IF YOU TURN AWAY YOU MAY MISS THE KEY PIECE OF INFORMATION FOR KEEPING YOUR FAMILY SAFE AND YOUR FORTUNE INTACT. Whether Meltzer and company are correct in their analyses or not is of no moment, for they are not in the trusted-information-intermediary business. This strikes me, at the corporate level, as a rather sinister and socially destructive con game.

Second, there is the level of Allan H. Meltzer himself.

He believes what he says--he does not believe that he needs to mark his beliefs to market, he does not believe that he should have paid closer attention back in the day to James Tobin's criticisms of his version of monetarism, and he does not believe that absent a radical and rapid and now six years overdue change of course inflation be avoided. He believes this as strongly as Cotton Mather believed that Jesus Christ would return to earth in 1736--the fact that two earlier dates of Mather's prediction had passed by shook Mather's confidence no more than the failure of inflation to emerge has shaken Allan H. Meltzer's.

One thing to do--and that I do do--is make fun of Meltzer, and of all the others who ought to have marked their beliefs to market by now but who continue to fail to make even the smallest good-faith effort to do so. Charity to one's good-faith intellectual adversaries is a virtue. And strengthening one's understanding by interpreting their arguments in the most favorable light and then attempting to refute them is the most valuable form of intellectual exercise. But there comes a point when you do your readers no good service by pretending to them that there is any intellectual there there when, in fact, there is not. At this stage for me to say "Meltzer may have a point" would be an act of cruelty and misinformation to readers. He doesn't.

But noting that Allan H. Meltzer's six-year record of wrongness and failure to mark his beliefs to market at all is a clown show is only a holding action. There has to be something else I can do that is more constructive. But what would it be?

Max Planck thought long and hard about this. But in the end even he gave up. His final position was:

Science does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die.... Science advances one funeral at a time...