Bessent and Warsh Are Playing for the Midterms

09/03/2026 Mark Thornton

The argument for AI solving inflation runs through productivity: better technology lowers costs, so prices fall. Mark Thornton of the Mises Institute takes that apart. Technology genuinely made computers and screens and phones cheaper, and it did nothing at all for healthcare, education or insurance. What changed was the balance of prices, not the level of them. He also argues the current buildout fits the classic pattern of a credit driven cycle almost feature for feature, and explains why higher rates would land on financial markets long before they touched consumer demand.

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