In his newsletter today, Paul Krugman discusses his early days working in the Reagan administration as a wonky, liberal whiz-kid during a time when the administration was strangling inflation with painfully high unemployment: Anyway, Marty and I had a working dinner on my arrival night, and he had one big question to ask: “Is the world economy about to collapse?” There were two main reasons for his concern. One was that Mexico had just announced it was unable to keep paying its debts, marking the beginning of the Latin American debt crisis. The other was that the Federal Reserve’s efforts to fight inflation had sent the U.S. economy into a tailspin, with the nation experiencing its worst recession since the 1930s, not to be rivaled until the financial crisis of 2008. But as it turned out, the world economy didn’t collapse. The debt crisis produced a “lost decade” in Latin America, with widespread economic suffering, but it didn’t spread into a global contagion. And further north, a policy U-turn by the Fed eventually jump-started a rapid recovery; by 1984 Ronald Reagan was boasting about “morning in America.” Still, the memory of that summer makes me a bit nervous about the economic optimism that seems to be breaking out all over right now, at least in the media. Predictions of a “soft landing” — inflation falling to acceptable levels without a recession — are proliferating. And my own prediction is indeed for a softish landing: Inflation does seem to be coming…