Gasoline is way up, with the effects of inflation exacerbated by Biden’s policy of pipeline cancellations and fracking bans. I’m paying $3.73/gallon now; I was paying something like $2.40/gallon a year ago. (Some people are fighting back by putting Joe Biden “I did that!” stickers next to the price window on gas pumps. They’re selling briskly on Amazon.)
When Twitter founder Jack Dorsey tweeted about the dangers of growing inflation, he was mobbed by Democratic flacks claiming that by talking about inflation he might make it worse. Some even said his remarks were a threat to “our democracy.”
Well, since “our democracy” is just a Democratic code phrase for “our untrammeled political power,” they probably were. Because people really, really hate inflation. When times are hard, people who still have jobs — which even in the Depression was most people — aren’t so affected. But when prices skyrocket, everyone pays, and everyone notices. …
“Milton Friedman isn’t running the show anymore,” said Biden, referring to the famous anti-inflation economist, when he was challenged about the inflationary impact of his grandiose spending plans. Except that actually, Friedman kind of is. Politicians like spending, so they don’t want to admit that overspending leads to inflation. But as Friedman reminded us, it always does.
Friedman just articulated the truth that left wing politicians have always hated, that “Inflation is always and everywhere a monetary phenomenon.”
Print or otherwise manufacture money faster than the supply of goods and services expands, and prices must go up. Obviously. Expect the left to go into denial on this point for the next few years, blaming inflation on bad people, the weather, the dog, unscrupulous capitalists, greed, and so on — just like they did in the 1970s.
Here is the US money supply growth rate since 2000:
Notice how the covid response turned the money growth rate up to almost 40% for a year.
Notice also that the rate has been about 8 – 10% for the last two decades, well above the CPI of less than 2%, even allowing a generous 3% margin for population and productivity growth. Which shows that CPI underestimates inflation, and that the money growth has mainly been driving asset prices.