Call it the "battle of the beards," suggests Robert Samuelson of the Washington Post: Paul Krugman vs. Ben Bernanke. Both are prominent economists, both have facial hair aplenty, and each has called the other "reckless." Krugman has been lambasting the Fed for not doing enough to help the economy recover—even if it means boosting inflation. Inflation, he argues, isn't so scary. Rising prices would encourage people to buy now, not later, and it would reduce the "real" value of debt.
But Bernanke has said that "would be very reckless." He observed that the Fed's inflation goals are a self-fulfilling prophesy—without them, companies would jack up prices. Samuelson sides with Ben, adding that prices could rise faster than wages, hurting spending. "None of this is preordained," Samuelson writes. "Economists have exaggerated their understanding and control of the economy. People don't often act according to academic theories." Krugman actually responded, praising Samuelson for making "a serious effort" to tackle the tough issue. He still thinks he's right, "but then, I would, wouldn't I?" (More Paul Krugman stories.)
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