Category Archives: Op-Eds

No Whodunit Here: The Cause of Inflation is Not a Mystery

Red and white “WIN” campaign button. Courtesy of the Gerald R. Ford Presidential Museum. Public Domain.
Red and white “WIN” campaign button. Courtesy of the Gerald R. Ford Presidential Museum. Public Domain.

In 1974, US president Gerald Ford declared inflation “public enemy number one” and launched a public relations campaign against it. WIN (“Whip Inflation Now”) buttons were handed out. The administration suggested various ways of “whipping inflation,” such as carpooling and home gardening. It didn’t work. Double-digit inflation outlived the Ford administration by several years.

Nearly five decades after Ford’s failed PR project, big-time inflation is back, along with the same professed ignorance of its cause from politicians and government officials, and their same obfuscation as to what inflation even actually is.

There’s a reason for that professed ignorance: In the United States, at least since 1913, government policy is the cause of inflation, full stop.

The obfuscation  usually takes the form of describing rising prices as “price inflation.” But rising prices aren’t inflation. They’re the effect of inflation.

Inflation, simply put, is an increase in the supply of money versus the goods and services available for purchase. When there’s more money chasing fewer things to buy, prices go up, just like they do at an auction when more bidders with fatter wallets show up hoping to grab themselves one of Jerry Garcia’s guitars.

Yes, it really is that simple.

Inflation doesn’t HAVE to be caused by government, by the way. If we were using gold or silver as money and some mining outfit discovered a vein of one of those metals, dug it up, and quickly doubled the amount in circulation, that would be inflation too.

Such concerns were among the reasons cited for creating the Federal Reserve — a pseudo-private banking cartel — in 1913. Instead of leaving the supply of money to the seemingly random wanderings of markets, Congress handed its authority to “coin money” and “regulate the value thereof” over to the Fed, which now creates “money” by, essentially, waving a magic wand.

In theory, the Fed balances the supply of money (as “Federal Reserve Notes”) with production so as to minimize inflation. But in reality, whenever Congress decides to use its power to “borrow money on the credit of the United States,” the Fed waves that magic wand and creates more.

Over the last year or so, a LOT more.

In the last 18 months, the US “M2” money supply (coin currency, physical paper, central bank reserves, demand deposits, travelers’ checks, savings deposits and money market shares) has increased from about $15.4 trillion to nearly $20.4 trillion.

That’s a 24% increase, annualizing to an inflation rate of about 16% — if production of goods and services kept up. But it didn’t. US Gross Domestic Product dropped from more than $21.4 trillion in 2019 to less than $20.1 trillion in 2020.

Inflation is a hidden tax. Instead of hitting you up for a dollar or ten, the government just makes that $100 bill in your wallet worth $99  or $90 in terms of what you can buy with it now as opposed to what you could buy yesterday.

The only way to “whip” politically created inflation is to separate money and state. Which explains why the American political class is scared witless by cryptocurrency.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

It’s Time to Take Away Government’s Social Media Privileges

Person holding a phone showing Facebook homepage. Photo by Solen Feyissa.  Creative Commons Attribution-Share Alike 2.0 Generic license.
Person holding a phone showing Facebook homepage. Photo by Solen Feyissa. Creative Commons Attribution-Share Alike 2.0 Generic license.

“Modern technology companies have enabled misinformation to poison our information environment with little accountability to their users, US Surgeon General Vivek Murthy said at a White House press briefing on July 15. “They’ve allowed people who intentionally spread misinformation — what we call ‘disinformation’ — to have extraordinary reach.”

In follow-up questions, White House Press Secretary Jen Psaki revealed that the Biden administration is “flagging problematic posts for Facebook that spread disinformation. … Facebook needs to move more quickly to remove harmful, violative posts .”

The single most on-point response to Psaki’s disclosure I’ve read so far comes from Glenn Greenwald via Twitter (the whole thread is worth a read): “There is no circumstance — none — in which it’s acceptable for the White House or any other agency of the government to be providing lists to Facebook of ‘problematic’ content it wants removed.”

Over the last few years, we’ve watched as politicians and bureaucrats of both major parties lean hard on social media platforms to act as, at turns, their unwilling soapbox providers and proxy censors.

Having spent decades browbeating and bribing the “mainstream media” into remaking itself as a stenography pool which reliably parrots every “official” pronouncement as indisputable fact, the American political class is beside itself over Internet freedom. That freedom frustrates the state’s near-monopoly on shaping public opinion. If there’s one thing politicians can’t stand, it’s competition.

What can we do about it, though?

While Facebook, Twitter, et al. are theoretically “private” companies, they’re vulnerable to retaliation through regulation or even prosecution should they defy their would-be masters in government. And the biggest players also seek the prize of “regulatory capture” — getting government on THEIR side in ways that prevent new competitors from cutting into their market share.

Short of abolishing the state itself (which I’m all for), there’s only one way to get the Donald Trumps, Joe Bidens, Josh Hawleys, and Adam Schiffs out of the social media bullying business.

We need to take away their social media access. Completely.

For obvious reasons, Facebook and Twitter aren’t going to do the right thing, which would be to ban all government officials and government employees and block access to all government IP addresses.

I’m surprised to hear myself saying “there oughta be a law,” but I guess there’s an exception to every rule.

The law I have in mind would impose a long prison term on any public official or government employee caught accessing social media.

Collecting a government paycheck? No social media. Not at work, not at home, not on your smartphone, not on your kid’s laptop. If you’re caught looking at Facebook or tweeting, you’re not just fired, you’re going to jail.

Like most of my great ideas, this one won’t happen. Such a law would have to be passed by the politicians themselves, and politicians never willingly limit their own power or their own freedom, only yours.

So I guess we’re back to abolishing the state, or at least looking for social media platforms that operate beyond the politicians’ reach.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

Congressional Proxy Voting? No. Do the Job or Quit the Job.

Washington DC in 1852, back when it was still difficult to get there. E. Sachse; scanned by Bob Burkhardt. Public Domain.
Washington, DC in 1852, back when it was still difficult to get there. E. Sachse; scanned by Bob Burkhardt. Public Domain.

“When the House revamped its rules in the early days of the pandemic to allow lawmakers to vote remotely,” Nicholas Fandos reports at the New York Times, “Representative Ralph Norman of South Carolina was among 161 Republicans who sued to block the arrangement, arguing that it ‘subverts’ the Constitution.”

He was right, but times have changed. Formerly a critic, Norman’s now a fan. On June 29th, he notified the Clerk of the US House of Representatives that he was “unable to attend proceedings in the House Chamber due to the ongoing public health emergency,” designating a proxy (fellow South Carolina Republican Joe Wilson) to vote in his stead.

Oddly, the “public health emergency” which prevented Norman from traveling the 400 miles or so  from his home in Rock Hill, South Carolina to Washington, DC, proved no obstacle to a 1,400-mile trip from Rock Hill to Weslaco, Texas.

That’s where Norman turned up during his “inability” to attend House proceedings. It seems that “public health emergency” is Normanese for “too busy attending a Donald Trump whinefest to be bothered with irritating distractions like, you know, showing up for work.”

Until well in to the 19th century, members of Congress spent days, even weeks, traveling between their homes and Washington on foot, by horse, or by slow boat or ship. And Washington itself was an unpleasant, pestilential town.

Rail, steamboat, and the automobile cut travel time considerably, while the ever-increasing size and wealth of the federal government turned the city into, all things considered, a veritable pleasure garden.

For more than 200 years, if a member of Congress wasn’t present at the Capitol — in time of peace, in time of war, and yes, in time of pandemic — his or her vote was neither cast or counted.

The increasing reach of commercial air travel has reduced travel times between Washington anywhere else in the United States to hours, at most a day or so. Members of Congress have fewer, and less convincing, excuses for playing hooky than ever before.

For his “service,” Ralph Norman receives a salary of $174,000 per year, plus fantastic fringe benefits and a posh potential pension.

If Norman worked at Arby’s assembling French Dip sandwiches (a far more worthwhile and productive activity than anything Congress does), he’d make a lot less money. And if he got caught calling in with a “public health emergency” so he could attend a Tool concert, he’d almost certainly find himself looking for other work.

“Serving” in Congress should be harder, not easier, than the jobs of the people Congress lords it over. And those who don’t want to actually do the job should find themselves real work in the private sector instead of leeching off the taxpayers.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY