Summertime Means More Heat About Inflation
Normally, I would be discussing the bombshells coming out of the January 6th Committee hearings, but our venerable EIC Lynn Mitchell has been tracking them pretty well. Thus, I figured I should focus on the most persistent what-about move by the Trumpenproletariat to distract from the would-be-coup revelations: inflation.
Both parties are willing to acknowledge that inflation is a problem. However, they are also more interested in using it as a weapon against each other than implementing actual solutions. Thus, while we’re feeling a lot of heat generated by the arguments, light is in short supply.
On one level, we see rank, nonsensical populism run roughshod over any economic sense. Republicans insist that higher gas prices are Joe Biden’s fault, while Democrats point the finger at “greedy corporations.” Neither seem interested in addressing the supply-side problem at hand (refinery capacity is down and still falling).
I don’t see how to convince oil and gas companies to spin up refineries for fuels that are clearly unprofitable in the long term, but a determined shift toward nuclear energy in general could reduce American oil demand (and thus, make things easier on refineries), while at the same time easing the pressure on energy inflation in general. The easiest way to do this is to remove the Carter-era ban on nuclear waste recycling. Sadly, no one seems even willing to mention nuclear power, let alone advocate for it.
Instead, we get things like a “gas tax holiday,” which State Senator Emmett Hanger neatly took apart yesterday…
… (pause for longtime readers of BD to process that Emmett Hanger and I agree on something) …
… (we ready yet?) …
… (Time’s up)
For the few of us old enough to remember the last bout with supply-constricted inflation, the paucity of policies is sickening to behold. In the 1970s, members of both parties pushed forward supply-side reforms: transportation deregulation (airlines in particular), capital gains tax reductions, freer trade, etc.
What do we have today? Neither Republicans nor Democrats seem interested in the lowest hanging fruit – namely, reversing Trump-imposed tariffs. The GOP blew its political capital on a Keynesian tax cut in 2017; they seem thoroughly uninterested in supply-side versions. As for the Democrats, they are following their leader – and for all of Joe Biden’s qualities, he is still one of the last of politicians from the discredited Keynesian consensus of the 1970s.
You may be thinking that supply-side relief could come from Richmond. Think again.
In short, neither party seems interested in genuine solutions for our inflation problem. However, only the GOP refuses to fix the problem while using it to distract from its role in undermining democracy at the same time.
The options aren’t inflation versus tyranny; they’re democracy with inflation versus tyranny with inflation.
… and they said being a conservative Democrat would be hard.