On June 19, 2022, geopolitical analyst Ian Bremmer posted the following on Twitter:
us: left govt, high inflation
uk: right govt, high inflation
germany: centrist govt, high inflation
italy: everyone in govt, high inflation
wild guess it’s not the govt
— ian bremmer (@ianbremmer) June 19, 2022
In a follow-up tweet the next day, Bremmer wrote:
1 - independent central banks:
printing like crazy
(powell: the one man trump and biden agree on)
2 - pandemic causing massive swings in supply and demand
3 - russia war disrupting supply chains
— ian bremmer (@ianbremmer) June 20, 2022
It’s possible that Bremmer is being sarcastic. In which case, I would like to be the first to welcome him to the Austrian Club.
But my reading of Bremmer’s tweets is that he’s quite serious. If I’m right to read Bremmer straight here, then it’s worth pointing out that the premise of just about everything Bremmer wrote in these two short bursts is wrong.
Let’s take the first tweet first. Bremmer apparently wants to say that all kinds of governments exist, and there is inflation everywhere, so clearly it’s not the government that’s causing inflation. This is fallacious on its face. Logic just doesn’t work this way. “All x are doing y, therefore x is not the cause of y,” is, well, silly.
That’s hardly the only problem. As some of the people replying to Bremmer’s weird logic also indicated, the “left-right-center-everyone” mapping which Bremmer applies is bogus. Government is government is government, and it doesn’t matter which slogans get slapped onto which campaigns. On that narrowcast reading alone, Bremmer’s assertions don’t hold water. The globalist Boris Johnson is a rightist? That’s comical, but one has to suspend disbelief on this score to make Bremmer’s tweet work even on this low level.
We can strip the phony politics away and go even deeper, however. Indeed, the reason why all governments are alike is where we get to the heart of Bremmer’s fallacy. Take a look at the first claim in his second tweet. Bremmer thinks that central banks are “independent.” His proffered reasoning is that Federal Reserve Chair Jerome Powell is “the one-man Trump and Biden agree on.” Ergo, for Bremmer, Powell must be an “independent”—he serves two masters in a way pleasing to both. It can’t be government that’s causing prices to skyrocket. Must be something else.
But Bremmer raises a question. And in doing so he sets up a tautology. That tautology is precisely the reason why Bremmer (if he’s being serious) is wrong that governments don’t cause inflation.
The implied question is: Does Powell’s being “the one-man Trump and Biden agree on” make him independent, or does it make the government monolithic? The answer is behind door number two. Powell is not independent. He’s just one head of a Hydra with a Georgetown address. Powell without government, and government without Powell—neither is possible. There’s your tautology.
The central bank of the United States (and the same is true in every country) is a purely political institution. Powell isn’t some monastic who stumbles in from his desert retreat to soothsay the economic future. He’s neck deep in the Washington swamp. He just happens to be very good at what he does, which is why he still has his leather chair in the Fed building. Like all Fed chairmen, Powell is a paid alchemist who transmogrifies, with magical economics-sounding incantations, the usually stupid ideas of politicians into seemingly de-politicized policy positions. Powell is good at reading a room and coming up with a number pleasing to his boss (and it makes zero difference whether the boss is with Team R or Team D). He’s like the oracle at Delphi. Or like Dylan. He doesn’t need a weatherman to know which way the wind blows.
You have “elections.” You have a clueless citizenry. You make it all work out, and you do so with a look of high-economic gravitas, as though the gods had ordained the chicanery you are peddling. That’s what makes you the Fed chair.
And it isn’t just that central banks are not independent of governments. It’s that, much more consequentially, governments are not independent of central banks. Governments as we know them in the twenty-first century would not, could not, exist without central banks. Without the “printing like crazy” phenomenon that Bremmer bemoans, there would not only be no inflation. There would be no fiat money, period. No fiat money, no government. No government, no Powell. Can it be that Bremmer truly doesn’t understand this?
Bottom line: Government spending doesn’t “cause” inflation. Government spending isn’t to inflation what, say, reading in low light is to ruined eyesight. It isn’t as though, over time, whoops, all that government spending caught up with you and, dang, you’ve got some inflation. Government spending under modern monetary theory (fiat money) regimes is inflation. There is no difference. It’s total identity. A is A. When a government prints fake cash, that’s inflation. From the get-go. There is no non-Ponzi Scheme way to understand the mechanism.
This is why governments can do nothing but make inflation worse and worse. The more cash an “independent” central bank prints (and on whose behalf does a central bank print cash if not the government’s? —even in the case of Fed, which is a private cartel designed to enrich globalist bankers, the get-out-of-jail-free card for counterfeiting American currency comes from the government), the more inflation chokes us. You can’t get something out of nothing. But that’s just what governments do—all of them.
Of course, governments can play with systems and inflate asset prices (with more fake money) to keep the downstream effects of inflation from biting for a time. But there’s only so high you can build a dam. One day, whoosh. And then Joe Sixpack can’t afford to fill up his truck.
That’s when politicians start blaming everyone but themselves.
Now, armed with these insights, we can handily dismantle claims 2 and 3 from Bremmer’s second tweet. The pandemic? Who owned the Wuhan lab where the virus was made, pray tell? Was it a private-citizen mad scientist cooking up superbugs in his spare time? Of course not. It was the Chinese Communist Party, a government institution if there ever was one. Statism on creatine, the CCP is. The Wuhan virus is the Wuhan virus because it came from a Communist-owned and -operated government lab in Wuhan.
And who paid for the Wuhan bug? Why, we did. Our taxes—siphoned out of our phony-currency bank accounts by the same rapacious government which can’t control its own spending in the first place and so needs to go on April Viking raids every year—were sent to Wuhan so a real mad scientist (with a New York accent) could skirt American laws and concoct a virus to fulfill his statist overlords’ dream: a lockdown. Under a lockdown, everyone begs the government to print more money. Everyone clamors for a “stimulus.” The people ask for inflation.
And, boy, do the politicians give it to them. Only too happy to oblige. It almost got Trump re-elected. (He wasn’t counting on another kind of inflation—ballot inflation. But that’s a story for a different day.)
Finally, Russia? That’s the least swallow-able excuse of them all. It asks us to assume a hundred years of history that just isn’t true. Has the United States of America been minding its own business all this time, not getting caught up in useless foreign wars and not, say, pushing a neo-imperialist Cold War Museum relic right up to a distant country’s doorstep? Um, no. After years of warnings about that old Cold War stunt, the distant country’s leader had enough and pushed back. Supply chains disrupted. What did Washington expect—that Putin would destroy the wavefront of NATO politely, perhaps with a strongly worded letter to the UN?
And anyway, for a century Washington has been pouring money into idiot crusades in the Middle East and Central Asia, in Africa, in Europe, in Latin America. In Southeast Asia, if you’ll recall. All of that cost buckets of fake money. To the best of my knowledge, Gerald Ford didn’t blame inflation in the 1970s on the Viet Cong. Then again, apparently Americans five decades ago weren’t quite as gullible as we are now.
Today, there seem to be geopolitical analysts who seriously believe that none of the above has any bearing on the price of sweet tea in Alabama. That “independent” central banks are to blame for printing all those dag-blasted hundred-dollar bills. That no one can afford a steak dinner anymore and it must be—yet again, for the eleventy-seventieth time—Vladimir Putin’s fault.
How I wish Ludwig von Mises and Murray Rothbard were alive today. I would love to see what they would have written on Ian Bremmer’s Twitter page.