Bill Gross is at it again, coming up with yet another reason for the Fed to tighten despite a still-depressed economy and inflation falling well below target. He is, of course, not alone — it has actually been amazing how wide a variety of reasons people in or close to the financial industry have come up for tight money in an economy that seems to need to opposite. Many of the people making these arguments started with dire warnings about runaway inflation; but when inflation failed to materialize, they didn’t change their policy views, they came up with new rationales for doing exactly the same thing.

This kind of behavior — ever-shifting rationales for an unchanging policy (see: Bush tax cuts, invasion of Iraq, etc.) — is a “tell”. It says that something else is really motivating the policy advocacy. So what is going on here? When I read Gross and others, what I think is lurking underneath is a belief that capitalists are entitled to good returns on their capital, even if it’s just parked in safe assets. It’s about defending the privileges of the rentiers, who are assumed to be central to everything; the specific stories are just attempts to rationalize the unchanging goal.

The thing to realize here, then, is that nothing about our current situation says that rentiers are entitled to their rent. And it’s a perversion of alleged free-market thinking to suggest otherwise.

Bear in mind where we are, economically: we are still in a liquidity trap, and we are very much in a paradox of thrift world, where hoarding — not spending — is a positive social evil.

What is the role of interest in this world? Interest, classically (and I do mean classically, as in Mr. Keynes and the), is the reward for waiting: there’s supposedly a social function to interest because it rewards people for saving rather than spending. But right now we’re awash in excess savings with nowhere to go, and the marginal social value of a dollar of savings is negative. So real interest rates should be negative too, if they’re supposed to reflect social payoffs.

This really isn’t at all exotic — but obviously it’s a point wealth-owners don’t want to hear. Hence the constant agitation for monetary tightening.

And this agitation does real harm. Think about the Fed’s taper talk: ultimately, I think it’s clear that it was an attempt to throw a bone to the tight-money crowd, in a way the Fed hoped wouldn’t do real harm. But it did do harm: long-term rates popped up, and are a significant factor in slowing our economy.

So add the rentiers’ sense of entitlement to the reasons we have made such a botch of macroeconomic policy.