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GMU Econ alum Will Luther busts the myth of “greedflation.” [2] Two slices:
Understanding what really pushed prices higher over the last two years—more money chasing fewer goods—also suggests another way to test the greedflation view: considering inflation in monetary regimes that constrain the growth rate of money.
On the gold standard [3], for example, miners generally ensured that the money supply grew in line with money demand—no more, no less. The result was a relatively stable purchasing power—at least over long periods of time—and, hence, a relatively stable price level. As Rafael Guthmann [4] points out on Twitter, the gold standard experience creates a big problem for the greedflation view.
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Milton Friedman was right. “Inflation is always and everywhere,” he wrote, “a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Politicians on the left would like us to believe inflation is caused by greedy corporations. And some academics are all too happy to provide them with theoretical cover. But the theories on offer are inconsistent with standard price theory and historical experience. Higher corporate profits didn’t drive prices higher. Rather, loose monetary policy pushed prices and profits up.
Let’s hope that George Will is correct that today’s fight over the debt ceiling is politics as usual. And let’s also hope, along with Will, that we Americans somehow manage to change for the better what has become usual in our politics [5]. Here’s his conclusion:
Progressives’ unvarying agenda is to concentrate power in Washington, to concentrate Washington power in the executive branch, and to concentrate ever more of that power in administrative agencies that are effectively exempt from being accountable to people who are accountable to voters. Hence progressives’ impatience with the Constitution and its separation of powers.
This rivalry between the branches usually gives each party the power to stymie the other sufficiently to compel compromise. Unless the president considers this institutional architecture unreasonable, even unintelligible. Ohio’s John Sherman [6] (1823-1900), senator and secretary of state, warned us [7]: “The Constitution provides for every accidental contingency in the executive — except a vacancy in the mind of the president.”
David Henderson warns that U.S. government budget deficits “are piling up toward an unsustainable future.” [8] A slice:
The future looks even grimmer. The Congressional Budget Office, an agency that tries to maintain its independence from factions in Congress and reasonably succeeds, periodically estimates future deficits and debt. In its latest estimates [9], published last week, the CBO projects budget deficits year by year. In 2033, the budget deficit is expected to be $8.7 trillion, which would be 7.3 percent of GDP. This is up from $1.4 trillion in 2022, which is “only” 5.5 percent of GDP. By 2033, the federal debt held by the public is expected to reach 118.9 percent of GDP.
Are these numbers likely to be wrong? Yes. You can never accurately predict ten years into the future. But I’m reasonably confident that by 2033, the federal debt held by the public will exceed 100 percent of GDP unless Congress and the president take serious action in the next few years.
Juliette Sellgren talks with Marian Tupy about his and Gale Pooley’s excellent book, Superabundance [10].
Eric Boehm applauds U.S. Supreme Court Associate Justice Neil Gorsuch’s condemnation of covidians’ abuse of emergency powers [12]. Two slices:
Justice Neil Gorsuch says all three branches of government share some of the blame for what he calls the “breathtaking scale” of emergency powers wielded by public officials during the COVID-19 pandemic.
“While executive officials issued new emergency decrees at a furious pace, state legislatures and Congress—the bodies normally responsible for adopting our laws—too often fell silent,” Gorsuch wrote [13]. “Courts bound to protect our liberties addressed a few—but hardly all—of the intrusions upon them.”
Gorsuch’s sweeping and powerful statement was attached to the Supreme Court’s recent ruling in Arizona v. Mayorkas [13], one of several cases dealing with the Title 42 orders [14] that allowed federal immigration authorities to expel migrants seeking asylum in the United States. Title 42 had been invoked by former President Donald Trump as the COVID-19 pandemic began in March 2020, and it was repeatedly extended by both Trump and President Joe Biden before finally being brought to an end last week.
But Title 42 was just one in a litany of COVID-related emergency powers that drew Gorsuch’s ire.
“Since March 2020, we may have experienced the greatest intrusions on civil liberties in the peacetime history of this country. Executive officials across the country issued emergency decrees on a breathtaking scale,” Gorsuch wrote [13] before rattling off a list that included stay-at-home orders, school closures, attendance limits on churches, a federal ban on evictions, and the Biden administration’s attempt (blocked by the Supreme Court) to impose a national vaccine mandate via a federal workplace safety regulator.
As some Gorsuch critics have been quick to point out on Twitter [15], it might be a bit of an exaggeration to call this the “greatest” attack on civil liberties in American history. There are unfortunately more than a few other contenders for that ignominious crown: slavery, Jim Crow, the internment of Japanese Americans [16] during the Second World War. All were, like COVID-19 emergency powers, the result of legal exercises of state power that violated basic civil rights.
But what the country experienced over the past few years does not have to top that list to be worthy of serious disdain. Gorsuch’s statement shouldn’t be regarded as a hot take about the worst civil liberties violations in American history, but a thoughtful review of how governments failed in this instance—so that they might do a better job in the future.
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Emergencies may sometimes require that the lawmaking process be temporarily short-circuited, but it’s imperative that state legislatures, Congress, and courts at all levels tighten up [17] the circumstances in which emergency powers may be invoked. Gorsuch is right: When officials take shortcuts to make policy, civil liberties are often the cost.
Peter Robinson talks with Jay Bhattacharya about covid, covidians, and covidian tyranny [18].