Topic: Inflation
“Look at America under the ruling and cultural elite today: Inflation is ravaging family budgets, drug overdose deaths continue to escalate, and children suffer the toxic normalization of transgenderism with drag queens and pornography invading their school libraries.”
This is baseless fearmongering and bigotry.
Roberts goes on to say that after the 1970’s, the political right led the United States to “historic political, economic, and global victories.”
Fact check: The economy does better under Democratic leadership, and always has. The New York Times reported in February 2021 that: “Since 1933, the economy has grown at an annual average rate of 4.6 percent under Democratic presidents and 2.4 percent under Republicans.” [Source]
Contextual analysis of foreword here.
“The Biden Administration’s extreme climate policies have worsened global food insecurity and hunger. Its anti–fossil fuel agenda has led to a sharp spike in global energy prices. Inflation has hit the poor the hardest as they expend a higher proportion of income on food purchases. Farmers in poor countries can no longer afford to buy expensive natural gas–based fertilizers that are key to achieving high yields of food production. Under advice from climate radicals, the government of Sri Lanka even banned chemical fertilizers entirely without having any replacements in place. The result has been hunger and violent political instability.”
Primorac exaggerates so aggressively that if I were going to debunk every instance, this essay would be prohibitively long. Suffice it to say, almost none of this is true. There’s little direct evidence that the Biden Administration’s climate policies are responsible for worsening global food insecurity. Global food insecurity is driven by a complex set of factors, including climate change, conflict, supply chain disruptions (such as those caused by the COVID-19 pandemic), and, most recently, the Russia-Ukraine war (which severely disrupted grain and fertilizer supplies).
Full contextual analysis of Section 2.6: Agency for International Development here.
“In addition, intermediate tax reform should repeal all tax increases that were passed as part of the Inflation Reduction Act, including the book minimum tax, the stock buyback excise tax, the coal excise tax, the reinstated Superfund tax, and excise taxes on drug manufacturers to compel them to comply with Medicare price controls.”
Oh good, let’s go back to uncontrolled prescription prices. /sarcasm
Full contextual analysis of Section 4.2: Department of the Treasury here.
“Eliminate the “dual mandate.””
The “dual mandate” as it pertains to the Federal Reserve refers to its two primary objectives:
- Promote maximum employment (ensuring as many people as possible are employed in a healthy economy.)
- Maintain stable prices (inflation control) – keeping inflation low and stable to preserve the purchasing power of money.
Winfree is arguing for dropping the employment part of their duties and focusing on controlling inflation. The practical results of this could include more aggressive inflation control but at the cost of higher unemployment, slower economic growth, and reduced focus on job creation.
Full contextual analysis of Section 4.4: Federal Reserve here.
“Commodity-Backed Money. For most of U.S. history, the dollar was defined in terms of both gold and silver. The problem was that when the legal price differed from the market price, the artificially undervalued currency would disappear from circulation. There were times, for instance, when this mechanism put the U.S. on a de facto silver standard. However, as a result, inflation was limited.”
This is the second of a number of proposals Winfree suggests for limiting the power of the Federal Reserve’s role, in the absence of abolishing it entirely (in decreasing order of preference/effectiveness.)
For the pros and cons of commodity-backed money, see the analysis below.
Full contextual analysis of Section 4.4: Federal Reserve here.
“K-Percent Rule. Under this rule, proposed by Milton Friedman in 1960, the Federal Reserve would create money at a fixed rate—say 3 percent per year. By offering the inflation benefits of gold without the potential disruption to the financial system, a K-Percent Rule could be a more politically viable alternative to gold.”
This is the third of a number of proposals Winfree suggests for limiting the power of the Federal Reserve’s role, in the absence of abolishing it entirely (in decreasing order of preference/effectiveness.)
The K-percent rule refers to a monetary policy framework where the central bank increases the money supply at a fixed percentage rate (K) annually, regardless of current economic conditions or other factors.
For the pros and cons of the K-percent rule, see the analysis below.
Full contextual analysis of Section 4.4: Federal Reserve here.
“Inflation-Targeting Rules. Inflation targeting is the current de facto Federal Reserve rule. Under inflation targeting, the Federal Reserve chooses a target inflation rate—essentially the highest it thinks the public will accept—and then tries to engineer the money supply to achieve that goal.”
This is the fourth of a number of proposals Winfree suggests for limiting the power of the Federal Reserve’s role, in the absence of abolishing it entirely (in decreasing order of preference/effectiveness.)
This statement is mostly accurate. The Fed doesn’t choose the “highest” inflation rate it thinks the public will accept. A more precise description would be that the Fed sets a specific target inflation rate (commonly 2%) based on its assessment of optimal economic conditions, rather than the “highest acceptable rate.” This target aims to promote price stability while allowing for moderate economic growth.
For the pros and cons of inflation-targeting rules, see the analysis below.
Full contextual analysis of Section 4.4: Federal Reserve here.
“Inflation and Growth–Targeting Rules. Inflation and growth targeting is a popular proposal for reforming the Federal Reserve. Two of the most prominent versions of inflation and growth targeting are a Taylor Rule and Nominal GDP (NGDP) Targeting. Both offer similar costs and benefits.”
This is the fifth of a number of proposals Winfree suggests for limiting the power of the Federal Reserve’s role, in the absence of abolishing it entirely (in decreasing order of preference/effectiveness.)
For the pros and cons of the Taylor Rule and Nominal GDP targeting, see the analysis below.
Full contextual analysis of Section 4.4: Federal Reserve here.
“Eliminate “full employment” from the Fed’s mandate, requiring it to focus on price stability alone.”
In a nutshell, eliminating the dual mandate and focusing only on price stability would likely result in more aggressive inflation control but at the cost of higher unemployment, slower economic growth, and reduced focus on job creation.
Full contextual analysis of Section 4.4: Federal Reserve here.
“Implement tariff relief to help counteract inflation by reducing prices for affected goods as well as to strengthen supply chains and boost manufacturing. End Section 232, 201, and 301 tariffs. Work with Congress to pass legislation repealing those provisions so future Presidents cannot abuse them.”
Lassman is arguing for ending certain tariffs to combat inflation.
The pros of this would be lower consumer prices, supply chain improvement, and increased manufacturing output.
The cons include potential job losses or factory closures in sectors that are protected by these tariffs (assuming they would struggle to compete with cheaper imports.) This includes steel, solar, et al. Increasing imports also widens the trade deficit, assuming one is concerned about that. More details in the analysis below.
Full contextual analysis of Section 4.6: Trade here.