Treasury Secretary Janet Yellen said on Thursday the U.S. faces “unacceptably high” levels of inflation. She says that bringing down costs is a “top priority” for her “administration.”
But her boss is Joe Biden. Joe Biden blames Putin, Trump, eats ice cream and tells people to drive way overpriced electric cars and suck it up.
If this is her boss, why should we pay any attention to what SHE says?
What caused inflation in the first place? Every economist you read will say it’s an increase in the supply of money by the Federal Reserve. Some economists say this is a GOOD thing. Others, like von Mises, George Reisman and Milton Friedman explain it’s a bad thing, because it’s anti-market and it devalues the currency. In short: Exactly what’s happening.
Regardless of one’s theoretical position or value judgments, inflation is an increase in the supply of money by the federal government (via the Federal Reserve). Why does the federal government have this kind of power? The Constitution gives it no such power. It didn’t get that power until around 1913. Since then, we have had a never-ending boom and bust cycle and a Great Depression, a Great Recession and multiple recessions far worse than anything experienced prior to 1913. I repeat: Why does the government have this kind of power? What good does it do real people?
Yellen would have us believe that her ice cream slobbering boss has it as a “top priority” to reduce inflation. But Biden has repeatedly said that inflation is NOT caused by too much government spending (unprecedented spending in 2020 and 2021). In fact, Biden insists, the only solution is way, way, way MORE government spending. Thanks to two genuinely moderate Democrats in the U.S. Senate, we have not yet got that; if we had, inflation would probably be even worse.
The solution to inflation will almost certainly involve a painful recession, kind of like the one we got in 1981-83 when the government last wiped out most severe inflation. But beyond that sad inevitability, the only REAL solution to inflation is the same solution for just about everything else: GET THE GOVERNMENT THE HELL OUT OF THE WAY. We shouldn’t have a Federal Reserve controlling the money supply in the first place; it should be done by a free market, via a gold standard or whatever combination of things people in a free, voluntary-based market decide to do based on their own individual or business situations.
Michael J. Hurd, Daily Dose of Reason