Demand Side economists, like Paul Krugman, claim that officials can use changes in the inflation rate and in public debt to “manage the economy”. Higher inflation rates supposedly act as a stimulus to increase GDP, and to lower the unemployment rate. How is this supposed to work? In the original form of this argument workers are fooled by inflation. That is, workers don’t perceive the effect that inflation has on the purchasing power of their wages. Employers do perceive cheaper real wages, so they pick up some bargains by hiring some additional workers.

Five days before the last Federal Open Market Committee (FOMC) meeting, Tho Bishop wrote about how the Fed and other agencies are preparing for a crisis without telling everyone they are preparing for a crisis.

In two columns, David Gordon reviewed my forthcoming book, Socialism: A Logical Introduction, and the Power & Market has very kindly given me the opportunity to reply.

Reports on the death of the present cycle of politically motivated monetary easing, in the words of Mark Twain, grossly exaggerated. Contemporary market analyses are full of how the Fed and ECB are dialing back on previous hints of Spring 2024 rate cuts. In tune with this, commentators are lauding the central banks, especially the Fed, for a show of political independence as elections approach.

The bigger picture though suggests otherwise. In the economic aftermath of the pandemic, monetary policy has again been blatantly political.

Seizure fever is toxifying law enforcement across the nation. For more than thirty years, federal, state, and local government agencies have plundered citizens on practically any harebrained accusation or pretext.

Oh but ain’t that America for you and me.

Ain’t that America something to see baby

Ain’t that America home of the free

Little pinks houses for you and me.

John Cougar Mellencamp

Released in 1983 after double-digit price inflation from 1979-1981 

I used to be an environmentalist.