The Real Folly here is Not Seeing the Bigger Picture
People who have large accumulations of whatever counter you wish to speak of are always going to have a paranoid fixation on the relative value of those counters. The very fact of the size of their steaming piles makes even tiny decreases worth significant sums of perceived wealth. And of course, raising interest rates gives them an automatic pay raise.
This ought not to be all that surprising. What is surprising, at least to me, is the lack of appreciation of just how much this paranoid fixation becomes a structural aspect of modern economies the more we allow such extreme accumulations in the first place. They are, after all, power accumulations as well and, as such, distort a lot more than just markets.
The real problem here is that the money game has never been very good at balancing the incentive that net gain creates with the bigger picture of what a network of input/output translation nodes require to keep things flowing, as well as growing, without distortions on either the input or output side of each node. And then you add the unbelievable extra complication of electrifying the flow of the primary aspect of input and output, which is, of course, information itself. With that does the balancing act become, for all intents and purposes, impossible.
One can only hope that the so called "serious elites" that Mr. Krugman speaks of here will come to see and accept this fact.