I’ve been writing a lot lately about the continuing influence of inflation hysterics despite their awesome wrongness over the past five-plus years. One question that naturally arises is whose interests are served by this unjustified influence.

You don’t want to be too crude about it. I don’t think there are a lot of clear-headed hard-money types who secretly admit to themselves that their models have failed and that the policies they advocate could mire the economy in a permanent slump, but nonetheless say what will support their class interests. Instead, interests feed ideology, and the ideologues may then be sorta-kinda sincere in their beliefs.

Still, it is worth asking who benefits from low inflation or deflation, and from higher interest rates. And the answer, basically, is rich old men.

On the rich part: Using SIPP data, we can look at the comparison between financial assets and debt by household net worth:

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Only the top end have more financial assets (as opposed to real assets like housing) than they have nominal debt; so they’re much more likely to be hurt by mild inflation and be helped by deflation than the rest.

Now, it’s true that some of these financial assets are stocks, which are claims on real assets. If we only look at interest-bearing assets, even the top group has more liabilities than assets:

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But the SIPP top isn’t very high; in 2007 you needed a net worth of more than $8 million just to be in the top 1 percent. And since the ratio of interest-bearing assets to debt is clearly rising with wealth, we can be sure that the truly wealthy are indeed in the category where they have more to lose than to gain by a rise in the price level.

I won’t give a chart by age, but it’s also clearly true that the elderly rich are especially likely to own lots of bonds and not have much debt.

But what about the people I keep hearing about — struggling middle-class retirees living on the interest on their CDs? Well, they exist, but there aren’t many of them and they’re less middle-class than you think.

Basically, inflation redistributes wealth down the scale of both wealth and age, while deflation does the reverse.

And therein lies the deep explanation for inflation hysteria. The Fed’s efforts to boost the economy haven’t had the disastrous effects the usual suspects predicted, but it’s nonetheless true that this is no policy for rich old men (ROMs?). And playing to the paranoia of the ROMs is basically what the WSJ editorial page, Fox News, etc. is all about.