The Inflation Grinch Who Stole Christmas - The American Spectator | USA News and Politics
The Inflation Grinch Who Stole Christmas

Inflation, a phenomenon based on dishonesty, unsurprisingly finds its enthusiasts dishonestly obfuscating its origins.

Jen Psaki, the president’s spokeswoman, informed the media this week that “corporate greed is a big driver of inflation right now.” She singled out the “greed of meat conglomerates.”

The greed of the meat conglomerate does not compare to the greed of the money conglomerate.

In September of 2019, the Federal Reserve’s balance sheet stood at $3.7 trillion. It now approaches $8.7 trillion. Even a dimwit, grasping the basic laws of supply and demand, knows what such a massive influx — of apples, or automobiles, of axes, of anything — does to value.

An equivalent to the money conglomerate’s greed in reducing last year’s dollar to 93 cents would look like the “meat conglomerates” reducing a pound from 16 to 14 ounces. This, aside from breaking the law, would strike everyone as terribly dishonest (and a true example of greed). Yet, when central banks tinker with money measurements we pretend not to notice or chalk it up to the way it always works.

To the contrary, the dollar lost roughly the same amount of value for the entire history of the republic until the creation of the Federal Reserve as it did since unacknowledged quantitative easing begun in September of 2019. The cause of the reign of the dishonest dollar did not stem from shopkeepers or car dealers or utility companies. It came from central bankers creating excess currency, normally in response to incontinent politicians looking to spend money they neither possess nor can even borrow by normal means. We call such manipulation fraud in any other field, and sic the government after the malefactors.

Meat producers did not “jack up,” as Psaki put it, their prices. Money producers devalued their product.

We know this because everything, not just roast beef, skyrocketed in price over the last year or so. At least it seems that way. What really happened involves the dollars in our pockets decreasing in worth, and sellers of products reacting accordingly.

The latest Bureau of Labor Statistics report on the Consumer Price Index (CPI), which gauges the primary symptom (higher prices) of the sickness (inflating the money supply), notes spikes in every category examined. Food, the category singled out by Psaki, rose by a mere 6.1 percent, which trailed the overall 6.8 percent annual CPI. Fuel oil, by way of comparison, skyrocketed 59.3 percent.

Did the shadowy meat conglomerate conspire with the gasoline conglomerate, the used-car conglomerate, and the barber-shop conglomerate to raise prices? Or, alternatively, did the fiscally irresponsible conspire with the monetarily irresponsible to debase our currency as a means of financing unprecedented spending?

The Federal Reserve knows its own role in currency debasement even if tries to muddy shallow waters. We know this because when it recently signaled a 2022 raising of interest rates and a tapering of largescale purchases of government debt it did the opposite of what it did to cause inflation as a means of reining it in.

Across-the-board inflation happens because of supply-and-demand issues involving money. The Federal Reserve, under the pressure of the president and his predecessor, created a supply of money outpacing its demand to such a degree as to cause a dramatic uptick in inflation.

Psaki’s “meat conglomerates” excuse-making, after the administration scapegoating supply chains and a bodily disease for this disease of the printing press, may strike as the latest deflection from the White House. But the latest excuse comes as a recycled excuse, not a new one.

Fifty-five years ago, economist Milton Friedman responded to the Jen Psakis of his day.

“Housewives have a justifiable complaint,” he conceded regarding protests of supermarkets. “But they should complain to Washington where inflation is produced, not to the supermarket where inflation is delivered.”

The Biden Administration wants citizens to blame where they spend money, rather than where the Federal Reserve creates money, for inflation. This erases the culpability of politicians. More importantly, it allows them to continue the profligate fiscal outlays (think: Build Back Better) that nudge the monetary policymakers to create mountains of cash to pay for it all.

The Big Spenders in Washington necessarily make it more expensive for the little spenders in the rest of the country.

The Inflation Grinches who stole Christmas reside on Pennsylvania Ave., on Capitol Hill, and at 12 banks throughout the United States. And like that other Grinch, they always disguise themselves when stealing from us.

Daniel J. Flynn
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Daniel J. Flynn, a senior editor of The American Spectator, is the author of Cult City: Harvey Milk, Jim Jones, and 10 Days That Shook San Francisco (ISI Books, 2018), The War on Football (Regnery, 2013), Blue Collar Intellectuals (ISI Books, 2011), A Conservative History of the American Left (Crown Forum, 2008), Intellectual Morons (Crown Forum, 2004), and Why the Left Hates America (Prima Forum, 2002). His articles have appeared in the Los Angeles Times, Chicago Tribune, Boston Globe, New York Post, City Journal, National Review, and his own website,   
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