Krugman also ignores the political consequences of the inflation he supports. Inflation may not create growth, but it does redistribute incomes. In an inflationary situation, one’s wealth depends less on what one does than on where one stands. Those able to cope with price hikes—a shopkeeper charging more, a banker raising interest rates—may become inflation’s beneficiaries. But wage earners and pensioners usually fall behind when prices rise, becoming poorer by the day. All those who lent their money at a fixed rate, usually by buying treasury bonds, are bankrupted in an inflationary era. This well-known pattern destroys all faith in government and leads to political upheaval. Throughout the twentieth century, inflation has been the death of democracy.