Tea at Trianon: Why Inflation is Worse Than You Think

John Wilson Croker on Marie-Antoinette

"We have followed the history of Marie Antoinette with the greatest diligence and scrupulosity. We have lived in those times. We have talked with some of her friends and some of her enemies; we have read, certainly not all, but hundreds of the libels written against her; and we have, in short, examined her life with– if we may be allowed to say so of ourselves– something of the accuracy of contemporaries, the diligence of inquirers, and the impartiality of historians, all combined; and we feel it our duty to declare, in as a solemn a manner as literature admits of, our well-matured opinion that every reproach against the morals of the queen was a gross calumny– that she was, as we have said, one of the purest of human beings."

~from History of the Guillotine by John Wilson Croker, 1844

Edmund Burke on Marie-Antoinette

"It is now sixteen or seventeen years since I saw the queen of France, then dauphiness, at Versailles; and surely there never lighted on this orb, which she hardly seemed to touch, a more delightful vision. I saw her just above the horizon, decorating and cheering the elevated sphere she had just begun to move in, glittering like a morning star full of life and splendor and joy. Oh, what a revolution....Little did I dream that I should have lived to see such disasters fall upon her, in a nation of gallant men, in a nation of men of honor and of cavaliers! I thought ten thousand swords must have leaped from their scabbards, to avenge even a look which threatened her with insult. But the age of chivalry is gone; that of sophisters, economists, and calculators has succeeded...."

~Edmund Burke, October 1790

Thursday, May 26, 2022

Why Inflation is Worse Than You Think

From Samuel Gregg at Common Sense:

Let’s rewind a couple years.
In 2020, to counteract the pandemic’s impact, Donald Trump pushed through Congress two enormous stimulus packages mostly funded by increases in America’s already obscene public debt. The next year, Joe Biden pursued a similar path, claiming that stimulus packages were necessary to get the economy moving again.
Overhanging all this was a Federal Reserve that, from 2009 to 2014, deployed what’s called quantitative easing—the purchase of preset amounts of government bonds and other financial assets to inject money into the economy—to boost economic activity. When the government, in March 2020, shut down the economy, Jerome Powell’s Fed returned to quantitative easing programs on a scale that dwarfed previous efforts.
The result of all this money being pumped into the economy is higher prices and a decline in our money’s purchasing power. This is reflected in everything from the price of eggs to women’s dresses to electricity to the rent you pay every month. As if to add insult to injury, “scarcity inflation,” which is due, in part, to disruptions to the supply chain, have compounded our inflationary woes. Just one example: recently, on eBay, people have started listing baby formula and asking would-be buyers to make a bid—triggering bidding wars among frantic mothers who have had trouble finding formula in grocery stores. The responsibility for most, if not all, of this lies squarely with policy makers in Washington, D.C.
That hasn’t stopped some of these people from trying to blame corporations for inflation. Senator Elizabeth Warren has insisted that big businesses—ranging from grocery chains to private equity firms—have made inflation worse by “jacking up prices.” President Biden’s spokeswoman, Jen Psaki, has referred to “the greed of meat conglomerates.”
If greedy corporations could “jack u p” prices whenever they wanted to, then they would do it all the time, over and over. But they don’t. That’s because, well, consumers have choices, and when things get too expensive, they stop buying those things. Suggesting otherwise is silly.
The inverse of this paper thin argument for “corporate greed” suggests that, until recently, corporations were not greedy, that, since the early 1980s, when inflation was really bad, corporations haven’t been all that keen on making that much money. Perhaps the senior senator from Massachusetts should spend a little more time in the private sector.
All of which underscores the all-important point that neither businesses nor the Russian president nor greedy hedge-fund managers nor greedy tech barons nor greedy CEOs nor mean, politically incorrect people who don’t employ the correct hashtags print money. The federal government does that. (Read more.)