Inflation is back. Or rather, since inflation never really left, inflation is back, with a vengeance. After being driven down by the severe recession of 1981–82 from over 13 percent in 1980 to 3 percent in 1983, and even falling to 1 percent in 1986, consumer prices in the last few years have begun to accelerate upward. Back up to 4–5 percent in the last two years, price inflation finally drove its way into public consciousness in January 1989, rising at an annual rate of 7.2 percent.

We are all too familiar with the phenomenon of the “spin doctors,” those political agents who rush to provide the media with the proper “spin” after each campaign poll, speech, or debate. What we sometimes fail to realize is that the Establishment has its spin doctors in the economic realm as well. For every piece of bad economic news, there is a scramble to provide a pleasantly soothing interpretation.

The press is resounding with acclaim for the accession to Power of Alan Greenspan as chairman of the Fed; economists from right, left, and center weigh in with hosannas for Alan’s greatness, acumen, and unparalleled insights into the “numbers.” The only reservation seems to be that Alan might not enjoy the enormous power and reverence accorded to his predecessor, for he does not have the height of a basketball player, is not bald, and does not smoke imposing cigars.

Alan Greenspan has received his foreordained reappointment as chairman of the Fed, to the smug satisfaction and contentment of the entire financial Establishment. For them, Greenspan’s still in his heaven, and all’s right with the world. No one seems to wonder at the mysterious process by which each succeeding Fed chairman instantly becomes universally revered and indispensable to the soundness of the dollar, to the banking and financial system, and to the prosperity of the economy.

September 1986 was an historic month in the history of United States monetary policy. For it is the first month in over 50 years—thanks to the heroic leadership of Ron Paul during his four terms in Congress—that the United States Treasury minted a genuine gold coin.

Governments, especially including the U.S. government, seem to be congenitally incapable of keeping their mitts off any part of the economy. Government, aided and abetted by its host of apologists among intellectuals and policy wonks, likes to regard itself as a deus ex machina (a “god out of the machine”) that surveys its subjects with Olympian benevolence and omniscience, and then repeatedly descends to earth to fix up the numerous “market failures” that mere people, in their ignorance, persist in committing.

Protectionism, often refuted and seemingly abandoned, has returned, and with a vengeance. The Japanese, who bounced back from grievous losses in World War II to astound the world by producing innovative, high-quality products at low prices, are serving as the convenient butt of protectionist propaganda.

There is no time like a presidential election year for truth to become buried under an avalanche of mendacious propaganda. No sooner did Patrick J. Buchanan enter the presidential race when the Bush administration, aided by its battalion of apologists in the media, attacked Buchanan as a “protectionist” violating the Bushian devotion to “free trade.”

Americans—or at least the American Establishment—may be the most gullible people on earth. When Gorbachev tried to sell his timid reforms as “market socialism,” only the American Establishment cheered. The Soviet public immediately spotted the phoniness and would have none of it. When the Polish Stalinist Oskar Lange touted “market socialism” for Poland, only American economists shouted huzzahs. The Polish public knew the score all too well.