Politicians, government officials, and economists don’t understand inflation. They think it’s an economic problem.
Pick 22 of these people at random and you will hear:
- It’s Biden and his $2.77 trillion federal deficit for 2021.
- Nonsense. The government ran up $5 trillion of deficits between 2009 and 2012 while inflation averaged less than 1.5%.
- It’s not the budget deficit, it’s the Fed. They engineered a $13 trillion increase in money supply (M2) after the 2008 sub-prime meltdown. That’s a 155 percent increase in money. More money chasing the same amount of goods creates inflation.
- You morons, it’s not money supply or deficits. It’s greedy corporations raising prices.
- Companies will raise prices if it increases long-term profits because long-term profits are their primary goal. The question is why they are able to raise prices today but could not in prior years.
- Because for the last two decades, business-friendly judges and administrations undermined anti-trust laws, fomenting market concentration that both limited price competition and encouraged oligopolistic behavior.
- Not so. It’s happening today because greedy unions are demanding higher wages and benefits for less work, which forces companies to raise prices.
- Companies will always raise prices if it increases profits. They don’t need the excuse of higher costs. The problem is capitalism itself.
- Due to COVID, American consumers shifted their spending from services to goods, causing a mismatch between supply and demand. It’s temporary. Free markets will solve this problem.
- No. It’s because COVID disrupted supply chains. But it is temporary. Free markets will solve this problem.
- It’s not temporary because inflationary expectations will fuel recurring wage-price cycles.
- 12 – 22. Repeat 1 through 11 in a louder voice.
These supposed experts all make the same mistake. They think inflation is an economic problem. They’re wrong. INFLATION IS NOT AN ECONOMIC PROBLEM. INFLATION IS A TRANSMISSIBLE VIRUS. Like all viruses, inflation randomly attacks populations, infects people, mutates, becomes more or less lethal, retreats temporally, and then reappears. It’s just like the flu.
Therefore, inflation should be treated as a public health problem. Let the CDC and Fauci fight inflation. Then Jerome Powell and Janet Yellen can fight COVID, which is actually a fiscal and monetary issue masquerading as public health crisis.
We could do worse (and we probably will).