I’ve often remarked on the remarkable tenacity of the inflationista doctrine (Santellinomics? CNBCnomics?) among investors, given the fact that believing the people who have been warning about soaring inflation and interest rates would have lost you a lot of money. How much money? Cordell Eddings at Brookings Bloomberg puts a number to it: $1 trillion in gains on U.S. government bonds since QE began. Actually, this is arguably a low estimate; if you really believed in this stuff, you wouldn’t just have failed to hold US debt, you would have bet against it — as, for example, John Paulson (as described in the article) and Eric Cantor did.

And let’s be clear: those of us who understood the nature of liquidity traps predicted low rates of both interest and inflation from the beginning — in the face of loud declarations that this was absurd, that big deficits and rapid expansion of the monetary base would of course be inflationary. This has to be one of the most dramatic examples in the history of economics of a surprising, successful prediction.

Yet as far as I can tell, not one of the people who signed the infamous 2010 letter accusing Bernanke of debasing the dollar has admitted having been wrong, or shown even a hint of reconsidering. More to the point, perhaps, the doctrine has retained much of its hold. Look at the comments on that Bloomberg piece; most of them either declare that we do too have high inflation, but the feds are hiding it in Area 51, or that the data don’t matter because the Fed is manipulating rates (hey, it can do that without adverse consequences? Then why not?)

As I’ve written on a number of occasions, I think it’s fundamentally about affinity fraud. The consumers of this stuff like the attitude of the inflationistas — their hostility to helping the poor, their disdain for snooty professors, etc. And so they trust them no matter how bad their past results have been.