Paul Krugman often will wind a very big lie around a kernel of truth, and in his column today, he does not disappoint. Now, here is someone who openly extols the “virtues” of inflation and complains that the real problem today is that the government is not inflating enough.

There is a stock character in fiction, particularly science fiction, who might be called the Immortal. Whether he be vampire or angel, alien or just some everyman blessed — or cursed — with Methuselah-like longevity, certain traits define the Immortal. He is polite, generous, even kind, but also resigned to the fact that life is often none of these things.

The Fort Worth paper this morning had some details on how stimulus money is being used: to buy massive military-style weaponry for local police in towns that have next to no crime at all. Ah, what a peace-loving president we have. (I was in Fort Worth for our Mises Circle meeting, which went fabulously well, by the way!).

[This article is excerpted from the book Forty Centuries of Wage and Price Controls: How Not to Fight Inflation, chapter 2: “The Roman Republic and Empire.”]

First quarter data look terrible, with another productivity slam but we once more get the media spin: be happy because things are getting worse at a slower pace that before.

Say, does anyone remember that President Bush’s amazing Keynesian program of countercyclical policy–debt, spending, inflation, regulation, bailouts–was supposed to prevent exactly what we are seeing now?

The full story of what we’ve seen is here.

In today’s column, Paul Krugman now insists that not only should we not fear inflation, but we don’t even have to worry about it at all, at least in the short term. As is his style, Krugman wraps a Big Lie around a tiny kernel of truth.

[This is the title essay of Hahn’s The Economics of Illusion, his frontal attack on the Keynesian system. It is based on a lecture delivered at the Studiengesellschaft fur Wirtschaftspolitik, Zurich, Switzerland, September 12, 1947.]

Apparently, Secretary Geithner is going to China this weekend. In part, he’s going to be there to tell China to stop exporting so much.

Which, of course, raises a serious question. If China stops exporting (as much) to the US, where will they get the dollars to lend our government so that we can repair our crumbling roads and bridges?
The rather obvious effect: we’re going to have to get the money some other way.

During Barack Obama’s presidential campaign, the mantras were hope and change and the imagery was that with him in charge, faith in government would be justified. But what America has mainly seen since his inauguration is fear.