[T]here are three main reasons for predicting inflation, in defiance of both market expectations and recent past experience. These are 1. Commitment to a research paradigm, 2. Emotive expressions of political and personal anger, and 3. Cynical affinity manipulation. None of these things is likely to respond to any amount of data in the short term. None of these depends on correctly predicting or understanding Extant Reality. They are, rather, artifacts of a different kind of reality than the kind that moves the planets in their orbit, lands men on the Moon, and propels cannonballs in nice parabolic arcs into the walls of Constantinople. They are artifacts of Tribal Reality, the kind of reality created by human beings repeating the same words back and forth to each other in order to confirm membership in a group. The war between Extant Reality and Tribal Reality has been raging for millennia, and it will not be resolved by a few years of low inflation.
---Noah Smith (HT DeLong)