Randy Holcombe wonders why the Fed wants to sustain an annual inflation rate of two percent. A slice:
With inflation, prices lose some of their informational content because to see the true cost of something requires adjusting its price by the rate of inflation. Because individual prices tend to change intermittently, this calculation becomes more difficult as inflation rises. If the price of something is up 5% this month, is that a real price increase, or is that price just catching up with inflation?
By this logic, the target rate of inflation should be negative.
The argument against negative inflation, aside from the one given above, is that if prices continually fall, people will put off buying goods with the hope of getting them at lower prices later. But people won’t put off buying goods forever. If we look at the computer industry, which has had prices falling for decades, that industry has not seemed to suffer from falling prices.
Furthermore, prices fell substantially in the United States from 1870 until 1913, when the Federal Reserve was created. That was a period of solid economic growth. Deflation did not appear to hurt the economy.
Speaking of the Fed, Bill Shughart decries its expanding “span of control” over U.S. banks.
Cato had filed a brief urging the Court to grant review in this case to bring some clarity to the application of the Dormant Commerce Clause, given the highly interstate nature of the market— almost all pork Californians consume is produced in other states—and the substantial burdens of the measure, which include the prospect that California agricultural agents will travel around the country to ensure that farmers in other states comply with California law. Ilya Shapiro, writing with Frank Garrison in 2017, described the clause as “the idea that states can’t impose regulations that impede interstate commerce even if Congress hasn’t expressly forbidden them to do so.…While the commerce clause has been invoked since the New Deal as a warrant for nearly unlimited federal power, its inverse actually seems more faithful to a founding document concerned with the free flow of commerce throughout the nation.”
As Jonathan Adler writes, “the decision complicates the already questionable ‘Roberts Court is pro‐business’ narrative, by demonstrating (yet again) that when conservative jurisprudential commitments conflict with corporate interests, the former prevail. Combined with decisions such as Virginia Uranium v. Warren, National Pork Producers shows that business groups cannot depend on conservative justices to support their challenges to state regulations.”
Justice Kavanaugh puts it best: California “has attempted, in essence, to unilaterally impose its moral and policy preferences for pig farming and pork production on the rest of the Nation” and “propounded a ‘California knows best’ economic philosophy” that “undermines federalism and the authority of individual States.”
Juliette Sellgren talks with Yesim Sayin about DC life and policy.
Roger Ream talks with GMU Econ alum Anne Bradley about the moral foundations of economic freedom.
David Henderson wisely recommends Margery Smelkinson’s testimony on natural immunity.
Officials may worry that recognizing severe side effects will fuel vaccine opposition and hesitancy. But the lack of transparency can only feed public distrust. And the lack of recognition “has left us as further collateral damage from the pandemic,” Ms. Dressen says.
TANSTAFPFC (“There Ain’t No Such Thing As Free Protection From Covid.”)
Daniel Hadas tweets: (HT Jay Bhattacharya)
Of course, lockdowns were not kindness, but cruelty behind the mask of care. Kindness is not something that can be centrally administered and mandated.
Any form of the left which thinks otherwise will stumble from one suffocating delusion to the next.
